Inflation in the football players’ transfer market
(2013/14-2022/23)

1. Introduction

This report analyses the transfer fees invested over the past ten seasons by clubs worldwide so as to measure the evolution of the sums involved (first chapter) and the inflation at the level of players’ prices (second chapter). The latter is measured both in a global manner for all footballers whatever their characteristics, as well as for particular market segments. These segments were determined according to the position of players transferred, their age at the time of transfer, as well as the geographical zone of recruiting clubs.

All the data analysed stems from research work carried out by the CIES Football Observatory. They include, as far as possible, both the fixed transfer fees and conditional payments. The first part also considers fees for paying loans. The comparison with the figures published each year by FIFA TMS for international transfers indicate a slight tendency to underestimate, without however, the results presented here being affected.

2. Sums involved

The sums paid out by clubs to recruit players has increased almost continually between the 2013/14 and 2019/20 seasons, before dropping dramatically during the 2020/21 season due to the pandemic. A resumption was observed from the following season and the value recorded during the current one is the second highest of the last decade. Throughout the period, we also observe a progressive increase in the percentage of sums committed conditionally by clubs. Henceforth, the latter account for more than 15% of the total amount of fees.

The growth in the sums committed by clubs is explained both by the increase in paid transfers, even though probably a little overestimated due to some data lacking for the first seasons studied, and the inflation of prices, though it is important to keeping in mind the increasing proportion of sums negotiated conditionally as mentioned above and illustrated in Figure 2.

The average fee for transfers identified including conditional payments has gone from €3.17 million in 2013/14 to a peak of €5.01 million in 2019/20, to then fall and increase again during current season’s transfer windows. Though relatively less important, an increase was also registered without considering add-ons: from €3.07 million in 2013/14 to a maximum of €4.57 million in 2019/20.

The distribution of clubs’ investments on the transfer market according to the position of players recruited shows the relative increase in the amounts paid for footballers not playing as forwards. Forwards remain, however, the most sought-after players on the transfer market, accounting for almost half of the sums committed by clubs over the last five seasons studied (as opposed to 56.5% during the five previous ones).

By category of age, we observe a relative increase in the sums paid for players 21 years of age or younger at the time of the transfer, as well as for footballers between 22 and 25 years of age, with respect to investments carried out for players aged between 26 and 29 years. This change is part of the generalisation of the player trading strategy, through which a growing number of clubs aim to generate profits on the transfer market within a context of increasing economic segmentation.

With regard to the geographical zone of recruiting clubs, the principle changes were observed after the pandemic. The health crisis did indeed accelerate the economic domination of English Premier League clubs, more solid and resilient than teams from other championships, including those from other big-5 leagues. From an average of 25.4% between 2013/14 and 2019/20, the percentage of investments of the English top division clubs on the transfer market increased to 35.5% after the health crisis, to attain a new record of 40.2% for the current season.

3. Price inflation

The inflation of the price of players was calculated on the basis of a statistical model built from a total of 5,244 paid transactions concluded between 2013/14 and 2022/23. As indicated in this scientific article, the transfer values estimated through the econometric model, comprising variables such as the players’ age, contract duration, performance, results of employer teams, etc., are correlated at over 80% with the fees actually invested by clubs.

The high level of correlation measured between values estimated and fees paid indicates, on one hand, that market actors generally follow coherent strategies in determining players’ transfer indemnities, and, on the other hand, that these strategies are well captured by the variables included in the statistical model developed.

The inflation of transfer prices for players with similar characteristics, or, to put it another way, all other things being equal, is determined from the “season” variable. To determine inflation according to market segments, we have built as many statistical models as the number of categories taken into account, whether at the level of position (five categories), players’ age (four categories) or recruiting clubs’ geographical zone (three categories). In all cases, the correlations between values estimated and actual fees is at least 75%.

At the level of all transactions recorded, the average annual inflation during the past ten seasons is 9.0%. This average was at 13.8% between the 2013/14 and 2019/20 seasons, then -0.2% during the three seasons following the pandemic, with an initial increase within the context of a sharp drop in the number of paying-fee transfers, a strong decrease, then a rebound. Over the whole period, the inflation of players’ transfer prices was 116% add-ons included and 90% without taking conditional payments into consideration.

Contrary to the volume of investments, where the impact was immediate, from the point of view of player prices, the effects of the pandemic were mainly felt during the 2021/22 season. In 2022/23, however, a new increase in player prices all other things being equal was recorded. In a strongly speculative context characterised by numerous transactions, with the wealthy English Premier League clubs at the end of global transfer chains, prices seem destined to return to record levels in the near future.

Rather than at the level of prices, the main impact of the health crisis in the longer term will likely be of having accelerated the tendency of clubs to include sell-on percentages in the deals. Like for conditional payments, this strategy enables buying clubs to reduce the financial costs and risks associated with transfers and selling clubs to receive more funds than they could have hoped for immediately in a subsequent transfer.

The inflation of transfer prices over the past decade was spread out differently according to market segment. Regarding player position, in comparison to the 2013/14 season, prices have mainly increased for centre backs (12.5% of annual inflation) and full backs (11.1%). The smallest increase was for goalkeepers (5.2%), while an inflation figure of a similar level, slightly above 8%, was recorded for both midfielders and forwards.

Significant differences in the inflation of transfer prices were also recorded according to the players’ age. We observe a progressive drop in inflation in parallel with an increase in the age of footballers transferred. Thus, the price of players aged 21 or under at the time of transfer have, on average, increased by 12.8% annually over the past decade. This figure is 9.8% for players transferred between 22 and 25 years of age, dropping to 7.0% for those aged between 26 and 29, and finally to 3.6% for footballers aged 30 or over. The latter category has also seen the biggest post pandemic deflation.

At the level of the geographical zone of recruitment, the principle difference observed was between English Premier League clubs and teams from the rest of the world. The inflation of prices for transfers to the former was indeed greater than that recorded for transfers to the latter: 12.6% as opposed to 8.5% for clubs in other big-5 leagues and 7.7% for remaining teams worldwide.

4. Conclusion

The sums involved in the transfer of players by professional football clubs worldwide has strongly increased over the past decade. The total of about €9 billion measured for the 2022/23 season is the second highest since the record 2019/20 season. The rebound seen in 2021/22 after the strong drop noted in 2020/21 has therefore continued during the current season, with even a new record for a winter transfer window in January 2023.

The increase in transfer fee investments has been general before the health crisis, while it has concentrated at Premier League level since the pandemic. During the 2022/23 season, the English top division clubs have accounted for a record percentage of transfer fees invested worldwide: 40.2% as opposed to an average of 25.4% between 2013/14 and 2019/20. More than ever, Premier League clubs are at the end of transfer chains and have increased their influence on the player market worldwide.

It is thus not surprising to notice that the prices of players recruited by English Premier League clubs have increased more than those of footballers signed by teams outside of this championship: +12.6% as opposed to 8.0% annually. Inflation was also particularly marked for centre backs (+12.5%), full backs (+11.1%), as well as for players aged 21 or under (+12.8%).

Generally speaking, all other things being equal, the prices of players have increased annually by 9.0% over the past decade. This average was 13.8% between the 2013/14 and 2019/20 seasons, then -0.2% during the three seasons following the pandemic. However, after having dropped sharply in 2021/22, the prices of footballers have returned to grow in 2022/23, suggesting a rapid return to record levels.

In ten years, the inflation in transfer fees has been 116% including add-ons and 90% without considering conditional payments. The gap is explained by the fact that sums invested by clubs on a conditional basis rose throughout the period. Add-ons paid according to players’ or recruiting teams’ performance account henceforth for more than 15% of total fees.