Squawka Guest Blog: What Constitutes Good Business In The Modern Transfer Market?

At the end of a summer window which has seen Raheem Sterling change hands for £49million and Manchester United breach the £280 million mark for the total amount spent since the arrival of Louis van Gaal, it may seem as though football's grasp of its own bottom line has finally been lost.

Yet with ever greater riches flowing into the coffers of Premier League teams, these headline-making sums no longer mean what they once did. In fact, even as the size of the outlays by many of the clubs soar, there's an argument that the situation may actually be becoming more sustainable, if only in relation to recent periods of over-spending, thanks to the scale of the new TV deal that feeds the money bags at the top of English football.

A recent report by the Deloitte Football Money League found that by the end of the 2013/14 season, the ratio of wages to revenue had fallen from 71% to 58% - a level not recorded since before the turn of the century. With the league's current incomings from broadcast rights set to grow by a further 70% or so by 2016/17, that percentage could decrease even further.

Many of the continent's most prestigious clubs have become increasingly unable to cope with the financial clout of clubs from the Premier League's mid-table and lower - as every single one of England's 20 top flight sides now reside within the list of Europe's 40 richest clubs.

To help make sense of these inflated figures, and how they affect perceptions of a player's quality and worth, Unibet have assembled a crack team of experts to give their views on the 2015 summer transfer window, analysing the best and worst signings of the season so far. The panel include European football writer and best-selling author Jonathan Wilson, Premier League correspondent and analyst Miguel Delaney, former Arsenal, Southend United and Stevenage midfielder-turned-journalist Adrian Clarke, freelance sports writer Mark Jones and Greg Johnson, Features Editor at Squawka.com.


Identifying A Good Deal 

Every manager (and increasingly these days, their Director of Football) wishes to prove they’re cunning when it comes to the negotiating table, and their knowledge of the market by unearthing a left-field bargain, but what are the prerequisites for that holy grail of transfer clichés: the astute signing?

Delaney says: "Ultimately, whatever actually works out. Price is relative, and only really mentioned if a player doesn't do it. A lot of people baulked at the plus-£30m United spent on a promising but still young Rio Ferdinand in 2002. It has barely been mentioned since.

"Everyone gets too hung up on transfer fees," reckons Jones. "It’s all about identifying what the team need and seeing if the player fits into the wage structure. A good deal is getting someone who will fill a specific role for a number of years, regardless of the fee.

"Even before Sterling was drawn to the Etihad, Manchester City had shown an appetite for forcing necessary deals through rather than becoming frozen by their fretting over value. It's no insult to suggest that Fernandinho wasn't worth £34m in 2013 but that didn't matter. The importance of having a player of his type trumped the chance of missing out on such a well-suited recruitment solution by holding out and haggling.

"Priorities change from club to club but essentially if the sum of the transfer fee, wages, bonuses, signing-on fee and so on is equal to or less than the improvement to the side, the sell-on fee, the image rights generated and the improvement to the general perception of the club, then it’s a good deal," suggests Wilson.

While Sterling won't help City win many PR battles after his controversial exit from Liverpool, he looks well-equipped to assist Yaya Toure and his new team-mates in finding glory during the future wars over league titles and silverware to come. In 2012, Manchester United ultimately paid £24m for 10 months of Robin van Persie at his peak, as the Dutchman fired the club to their 20th league win in order to send Sir Alex Ferguson off into retirement in style. Even taking into account his muted follow-up performances in the two subsequent campaigns, going by the formula above, it's hard to consider how his purchase was anything but an unqualified success, but which players will make the equation work for them this year?


Tops And Flops

Given how the revenues and spending of Premier League clubs has escalated in scale over recent years, purpose does seem to take precedent over price, even when the inflation rates of time and the greater level of wealth in the game is taken into account. Yet there are still plenty of deals, besides the signing of Sterling, that have made the panel of Unibet experts sit up and take notice.

Wilson picked out Andre Ayew as his signing of the season. He's quick, strong, skillful, brave, versatile and a better header of the ball than his height may suggest. If he can add the consistency a 25-year-old should be showing then it represents a major coup for Swansea to pick him up on a free, even with a reported £5.7m signing-on fee."

"Petr Cech is a snip at £10million," reckons Clarke. "I know that he’s a lot younger, but David de Gea will cost Real Madrid four times as much and I’d put them on a par for the next few seasons. To get a world class keeper for a fee that’s only just in excess of what West Brom paid for James Chester, must have made Arsene Wenger pretty happy."

Johnson isn't sure that Chester's price tag should automatically make him the benchmark of transfer market mediocrity, however. "West Brom have paid £8million for a relegated central defender with just a year left on his contract, but context is important. Tony Pulis is a manager who has a big effect on his side's form, morale, style and stats, but he specialises in tightening teams up rather than making them more dangerous.

"Chester is a consistent and composed performer who will help to keep defensive errors to a minimum. Since the Baggies' overall rate of shots and goals per game are unlikely to rise, that could end up being the difference between a relegation battle and safety."West Brom's new record signing, Salomon Rondon - who scored 20 goals in 36 league games for Zenit - looks exactly the kind of player they need in that respect. A decent, if costly, window for Pulis even if he does end up losing Saido Berahino." One centre-back signing who could prove to be a poor buy though is Sylvain Distin, according to Jones. "He struggled badly at Everton last season and I’d worry for Bournemouth if they’re pinning their survival hopes on him."

At the other end of the table, the majority of the pundits seemed unconvinced by the arrival of Radamel Falcao at Stamford Bridge, especially given his inability to get to grips with the demands of the English game under Van Gaal at United last season. But if there's one club worth backing to turn such a deal around, it's ChelseaThe masters of the market.


The Masters Of The Market 

Unibet's experts were united in their praise of the Blues and their rise to become one of the savviest operators with regards to buying and selling talent in the Premier League, if not in Europe.

As well as obtaining the necessary purchases that Jose Mourinho required to make them title-winners again in Diego Costa, Cesc Fabregas and Nemanja Matic, they have the process of offloading unwanted stars down to an art-form. David Luiz, Juan Mata, Andre Schurrle and Romelu Lukaku have all brought in sizeable returns after failing to prove their worth to the Portuguese manager, of which have been reinvested in quality new additions.

Besides the reigning champions, Southampton and Swansea City also received plenty of praise for making the most out of their resources and scouting networks, with a consistent string of intelligently-targeted captures and well negotiated sales. Other clubs are now beginning to follow their example too. "Stoke have quietly done an excellent job altering the profile of the team without losing their competitiveness," says Delaney. "Their work this window has again been excellent."

Some of the league's more unconventional set-ups also offer intriguing alternative approaches to getting the most from the market, such as Watford, who can count Johnson as a fan."Many may have complaints about the Pozzo model but it's an approach that's worked well for Udinese and Granada in Italy and Spain, and while it might not be proven to work in the Premier League, it's a way of working that has already won them promotion.

"The turnover of players and 10 new arrivals this summer may be a bit too reminiscent of QPR's rash reshuffles in recent years, but the Hornets look to be in the kind of shape that may enable them to stick around in the top-flight, long-term."


Perceived Value 

Yet Clarke believes that bargain signings aren't what they used to be. "The financial risk of a transfer has been reduced because of the cash swilling around in the Premier League. As most clubs can afford to take the odd hit or two, finding ‘value’ has become less important. Angel Di Maria is one of the most obvious examples of a transfer failing to meet expectations, but in years gone by the speed at which he was discarded - he lasted just 11 months after arriving in a British record deal for £59.7m from Real Madrid in August 2014 - may not have been so feasible.

Instead, with United flush with cash, having climbed up to second in the Deloitte Football Money League table even after their worst season since the start of the Premier League, they worked to the policy that their first loss would be their best loss, selling the Argentinian on to Paris Saint-Germain for around £44million.

Hardly the proudest moment in the history of transfer dealings at Old Trafford, but a fast-paced saga that summed up how intense the modern market has become, with its wheels well-oiled by the immense amount of money that has come to be involved in the game.

It may seem like a grounded pearl of common-sense wisdom to dismiss these extravagant trends and say that football doesn't exist off in its own separate world, away from the hard political realities of wages, spending and the worth of vital services, but actually, to some extent, it really does. Within this parallel universe of millionaire horse-trading, the Premier League sits inside another bubble of its own.

"The whole world knows how much revenue Premier League clubs receive from TV rights," says Clarke. "Players and clubs will do their best to hold them to ransom, safe in the knowledge that they can’t plead poverty."


Outsourcing Errors

Recent efforts to temper the importing of foreign talent and give homegrown players a chance, in first team football and the transfer market, have backfired too. "English clubs overpay for local talent, but that’s unavoidable with a quota system."Much like how the Qatar-funded deep pockets of PSG enabled United to quickly fix their mistake, the recent rise in spending power by well-backed clubs and leagues in Turkey, China and the Middle East could prove to be something of a salvation for the free-spending teams of the Premier League.

Signing up a disinterested and stubborn footballer on huge wages, who then refuses to leave for less, can quickly become a problem for managers under pressure to tighten their belts and justify their spending. Having increased their demands and lowered their reputations, the usual escape routes of a quick sell to Europe can disappear.

"Over the years to come, it's likely that yet more cast-offs from the English top-flight will follow the lead of players such as Nani, Asamoah Gyan and Paulinho and head to territories more prepared to offer them generous conditions to boost the profile and quality of their competitions," reckons Johnson. But Delaney believes that Premier League clubs in general have an export problem.

"The only times that English clubs don't seem to undersell to teams abroad is in the cases when Real or Barca just come along and pick off their best player, which in itself says something.


So How Can Clubs Make Sure Their Deals Come Good?

"According to Unibet's panel of experts, the key to making a signing work out is making sure they have a role, getting them motivated and having a plan for how to use them.

Perhaps that's why Roberto Firmino has come to be one of the most hotly debated transfer of the season so far? As Clarke puts it: "He is the biggest gamble of the summer but he does have the talent to make Liverpool's call pay off. I’d say it’s 50-50 whether he settles at Anfield."

"My suspicion is that beyond the very top handful, most players aren’t that different in ability", says Wilson. "What makes them successes or failures is how comfortable and motivated they feel in their environment.

"That can be an issue of tactics - does the new team play to their strengths - or it may be more general: does the player like his new house, how have his family settled, can he speak the language, is he bored? Pastoral care for footballers is a growing area." Yet there is at least a clear need for the Brazilian and his fellow arrival Christian Benteke at Liverpool who need guile and goals to replace Sterling and cover for the fitness issues of Daniel Sturridge. Their former winger is another transfer who should do well due to being required, according to the panel. "Manchester City were in need of young, English blood and Sterling is the best around," says Jones.

Then there's Falcao. What can Chelsea and Mourinho do to make what looks to be a high-risk bit of business work for them this season?"

He’s only on loan but I don’t really see what he adds to Chelsea," says Wilson. "He seems to have lost his acceleration when he suffered a knee injury in January 2014 and was poor both last season at United and in the Copa America for Chile."Tactically he doesn’t seem to fit either. Jose Pekerman, the Colombia coach, is convinced he needs to play in a front two, whereas Chelsea have almost invariably played a 4-2-3-1 in Jose Mourinho’s second spell." May the Blues have acted with hubris by signing a player on past reputation without a blueprint to make the most of the player as he is today.

However, his lack of a gigantic transfer fee should help the Colombian. "I think, as with Sterling, the public nature with which prices are discussed has unhelpfully started to skew perceptions of players' abilities," reckons Delaney. Given how often finances and figures have come to be used to conjure up a sense of meaning and drama within the worlds of journalism, politics and entertainment, it's easy to see how footballers' transfer fees can begin to be viewed as the sport's answer to the Parliamentary expenses scandal in some quarters.

The issue is that even well-meaning attempts to be proportional over fans' expectations struggle to keep up with the ever-inflating fees and funding streams. A few years ago, £30m would have been regarded as a fairly exceptional price for a footballer. Today such a figure almost feels mundane: £50m is the new £30m, which in turn has become the new, acceptable sort of upper-middle limit that £20m once represented.

Andy Carroll at £35m seemed seismic in 2011. Benteke for £32.5m feels like the going rate in 2015. The shock value of transfer fees and their fast-climbing values are quickly dampened for those who live and breathe the game, but to external observers it's easier than ever to understand why this wonderful, over-indulged game that so many love can, in reality, look so out-of-touch and absurd.


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