European transfer prices crash, €10 billion to be wiped off market
KPMG, the global accountancy firm, have analysed the financial fallout in the football transfer market due to the Covid-19 crisis, and the forecasts are staggering.
As reported in the FT, the European transfer market is heading for a crash, with up to €10 billion to be wiped off the market. Readers are told:
Up to €10bn will be wiped off the value of European football players due to the coronavirus pandemic, as some of the sport’s biggest clubs warn that plummeting revenues mean less cash will be spent on star signings.
Player values set to fall by up to 10bn Euros according to KPMG, with top clubs preparing to spend far, far less in what is set to be a depressed transfer market. More signs of the ripple effect of the pandemic shutdown across football – in @FT https://t.co/0YNCNQX3ci
— Murad Ahmed (@muradahmed) May 6, 2020
KPMG believe that the impact of playing football behind closed doors will result in a €6.6 billion loss to European football. However, that figure will rise to €10 billion if leagues in Europe cancel their campaigns.
Read the new KPMG Football Benchmark report, where we analyse what factors impact player values with football on hold, and provide value estimates for two potential scenarios – a cancellation and a completion of the season.
➡ https://t.co/oqRlcyWDE6 pic.twitter.com/D69jCsMNeV
— KPMG Football Benchmark (@Football_BM) May 6, 2020
Lower transfer fees may benefit big clubs
In recent days there’s been a growing clamour of support in the UK for a redistribution of wealth in the football pyramid.
Those views were aired by EFL chairman Rick Parry on Tuesday.
EFL chair Rick Parry says “need a complete reset” of lower-league finances and “rescue package” from Premier League.
But he says current “parachute payments are an evil that need to be eradicated”
6 Championship club each get average of £40m from PL while other 18 each get £4.5m
— Rob Harris (@RobHarris) May 5, 2020
However, KPMG indicate that the depressed European transfer market will likely benefit the bigger clubs, which in turn could increase the divide between the haves and have nots. KPMG said:
We will most likely witness a ‘buyer’s market’, in which a minority of clubs could exploit the difficult financial position of their counterparts, possibly getting players at a lower price than would have been possible up until last summer.
Kylian Mbappe & Leo Messi fees drop drastically
In the KPMG Football Benchmark report, they include a graphic showing the likely decrease in transfer fees for world football’s top stars.
It’s believed that PSG striker Kylian Mbappe has seen his value drop from around 225 million euros to 188 million euros.
Leo Messi’s price tag has also fallen dramatically. The Barcelona superstar, who is out of contract in 2021, has seen his value fall from 175 million euros to 134 million euros.
20% value drop in Real Madrid & Barca squads
Spanish football giants, Real Madrid and Barcelona, are also given bad news by KPMG.
According to their estimates, in the scenario that La Liga resumes behind closed doors, Real Madrid’s squad value will fall from 1,168 million euros to 944 million (19.1% drop). That figures fall to 851 million euros (27.2% fall) if the season is cancelled.
Barcelona’s squad, previously valued at 1,136 million euros, will be 903 million euros (-20.5%) if the season continues and 808 million (-24.0%) if not.
This article was edited by Ben Green.