Study on the Transfer System in Europe

Transcription

1 Study on the Transfer System in Europe ECA General Assembly March 3, 2014 emanuele grasso partner at pwc ernesto paolillo professor at liuc university

2 14,322 The total number of international transfers made by European clubs in the 2-year period 2011/12 and 2012/13 2

3 $5,147m The total value of international transfers made by European clubs in the 2-year period 2011/12 and 2012/13 3

4 5,491 The total number of international and domestic transfers made by major 5 leagues clubs in the 2-year period 2011/12 and 2012/13 4

5 4,853m The total value of international and domestic transfers made by major 5 leagues clubs in the 2-year period 2011/12 and 2012/13 5

6 Population of the study 2011/2013 International Transfers Made by European Clubs 2011/2013 Value of International Transfers Made by European Clubs 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, ,511 Transfers within UEFA territory 2,366 Incoming transfers from non-uefa countries 2,445 14,322 Outgoing transfers to non-uefa countries Total transfers made by European clubs $6,000m $5,000m $4,000m $3,000m $2,000m $1,000m 0 $4,007m Within UEFA territory $801m Paid to non-uefa countries $339m $5,147m Received from non- UEFA countries Value of transfers 2011/2013 International and Domestic Transfers Made by Major 5 Leagues Clubs 2011/2013 Value of International and Domestic Transfers Made by Major 5 Leagues Clubs 6,000 5,000 4,000 3,000 2,000 1, ,110 Transfers among major 5 leagues 1,446 Incoming transfers from clubs outside major 5 leagues 2,935 5,491 Outgoing transfers to clubs outside major 5 leagues Total transfers made by major 5 leagues 6,000m 5,000m 4,000m 3,000m 2,000m 1,000m 0 2,661m Within major 5 leagues 1,551m Paid to clubs outside major 5 leagues 641m 4,853m Received from clubs outside major 5 leagues Value of transfers 6

7 Positive correlation between football and the rest of the economy Football industry is not different to the rest of the economy We segmented UEFA countries into 3 bundles Football Revenues & GDP of European Countries by Bundle 2011 European football revenues 16% 2% Top bundle Medium bundle Low bundle 13,133m 2012 GDP 6% 82% 23% $ 21,456m 71% 7

8 European clubs revenue growth was absorbed by employee costs In relative terms, transfer expenditure did not increase during past years compared to the revenue growth Margin after Employee Costs and Transfer Expenditure bn % % 24% % % % 30% 20% 10% % +5.6% European football revenues compounded annual growth from % Most recent incidence of transfer expenditure on revenues (28% in 2007) Employee costs Margin after employee costs Transfers as % of revenues +8.5% Employee costs compounded annual growth from % Most recent incidence of employee costs on revenues (59% in 2007) 8

9 There is substantial redistribution of players from big clubs to smaller ones... Redistribution of players is proven by the current transfer mechanism 1,054 Net outflow of players from top bundle countries clubs to the rest of the world 877 Net outflow of players from cluster 1&2 clubs to the rest of the world Clusters definition: Cluster 1: Major 5 leagues clubs ranking from 1 st to 5 th place Cluster 2: Major 5 leagues clubs ranking from 6 th to 10 th place Cluster 3: Major 5 leagues clubs ranking from 11 th to 15 th place Cluster 4: Major 5 leagues clubs ranking from 16 th to 20 th place > > Redistribution of players was proven from 2 perspectives: International transfers in which a European club was involved Top bundle Net outflow of players: 1, to medium bundle (40%) 327 to low bundle (31%) 301 to non-uefa countries (29%) International and domestic transfers in which a major 5 leagues club was involved Clusters 1&2 Net outflow of players: to clusters 3&4 (21%) 593 to resp. lower divisions (68%) 91 to other European leagues (10) 11 to non-uefa countries (1%) 9

10 ...along with redistribution of money The current transfer system allows for redistribution of money from top to bottom $1,028m Net outflow of money from top bundle countries clubs to the rest of the world 904m Net outflow of money from cluster 1&2 clubs to the rest of the world Clusters definition: Cluster 1: Major 5 leagues clubs ranking from 1 st to 5 th place Cluster 2: Major 5 leagues clubs ranking from 6 th to 10 th place Cluster 3: Major 5 leagues clubs ranking from 11 th to 15 th place Cluster 4: Major 5 leagues clubs ranking from 16 th to 20 th place > > Redistribution of money was proven from 2 perspectives: International transfers in which a European club was involved Top bundle $ $ $ $ $ $ $ $ $ $ Net outflow of money: $1,028m $463m to medium bundle (45%) International and domestic transfers in which a major 5 leagues club was involved Clusters 1&2 Net outflow of money: 904m $ $ $ $120m to low bundle (12%) $445m to non-uefa countries (43%) 294m to clusters 3&4 (32%) 208m to resp. lower divisions (23%) 242m to other European leagues (27%) 160m to non-uefa countries (18%) 10

11 Transfer system is a mechanism that counters competitive imbalance Wealth goes to clubs with a larger fan base and the transfer system is a way to redistribute it to clubs with a smaller fan base No transfer system Big clubs* No money spent 904m + 904m Money availability - Small clubs No transfer system Potential effects: No redistribution of value Inflationary effect on salaries of top players Wider gap between top players and other players Wider gap between big clubs and small clubs No redistribution of value from big to small clubs + Inflationary effect on salaries of top players Competitive imbalance *Cluster 1&2 clubs 11

12 11 The average number of clubs per country that participated in UEFA s club competitions over the last 10 years 12

13 14% Loans 13% Permanent transfers 73% Out of contract transfers 73% of total international transfers are out-of-contract transfers 13

14 Significant number and weight of out-of-contract transfers Freedom of movement of players is guaranteed by the current system as out-of-contract transfers represented the majority of the total transfers $0.4m 2011/2013 Average transfer value (all transfer types considered) $2.7m 2011/2013 Average transfer value (considering only permanent transfers) 2011/2013 International Transfers Made by European Clubs by Type 15,000 12,000 9,000 6,000 3, ,511 14% 72% 14% Transfers within UEFA territory 2,366 20% 63% 17% Incoming transfers from non-uefa countries 2,445 8% 85% 7% Outgoing transfers to non-uefa countries 14,322 14% or 1,975 73% or 10,431 13% or 1,916 Total transfers made by European clubs 73% 2011/2013 incidence of out-of-contract transfers on total transfers Permanent transfers Out-of-contract transfers Loans 14

15 1.15% The percentage of the solidarity contribution on the transfer fee during the 2-year period 2011/12 and 2012/13 15

16 Solidarity contribution lower than expected The collection of solidarity contribution has to be enhanced 2011/2013 Solidarity Contribution Involving European Clubs $70m $60m $50m $40m $30m $20m $10m $0m 1.28% $50.2m $6.9m 0.88% $0.8m 0.24% Within UEFA territory Paid to non-uefa countries Received from non-uefa countries $57.9m 1.15% Total solidarity contribution 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% Solidarity contribution Solidarity rate $57.9m 2011/2013 Solidarity contribution paid by clubs for international transfers in which a European club was involved $199m Gap to reach 5% (theoretical amount of solidarity contribution) 1.15% 2011/2013 Actual solidarity rate 5% FIFA required solidarity rate 16

17 Significantly high amount of club agent commissions The role of club agents and their compensation should be reviewed carefully $254m 2011/2013 Club agent commissions 14.6% Incidence of club agent commissions on the of the value of transfers in which a club agent was involved 2011/2013 Club Agent Commissions from Transfers Involving European Clubs $5,147m Total value of transfers $1,740m Value of transfers involving club agents $254m 14.6% Club agent commissions or of the value of transfers involving club agents Club Agent Commissions $42m 17% $1m 0.3% $254m $211m 83% From transfers within UEFA territory From incoming transfers from non-uefa countries From outgoing transfers to non-uefa countries 17

18 54% The percentage of outgoing international loans made by European clubs during the 2-year period 2011/12 and 2012/13 that involved players under 23 18

19 More than half of total international loans involved under 23 players Loans are a fundamental tool for the development of young players as they allow them to gain first team experience 54% 2011/2013 Incidence of outgoing loans involving under 23 players on total outgoing loans 23.7 Average age of loaned players 2011/2013 Outgoing Loans of European Clubs by Players Age Outgoing loans Under 23 54% Other players 46% Outgoing loans: 1,506 Average players age: 23.7 years Players age

20 11% The percentage of loans made by major 5 leagues clubs that involved a monetary compensation 20

21 Widespread loan practice in the major 5 leagues Although loan practice is widespread in the major 5 leagues, the market does not appear to grant value for loans 2011/13 Breakdown of Loans by Origin/Destination 33% Incoming loans 6% 10% % Outgoing loans 3% 9% 19% 69% 1,990 Among major 5 leagues Respective lower divisions Other Eur leagues Non-UEFA countries 2011/2013 Loans with Monetary Compensation Made by Major 5 Leagues Clubs % 116 Loans within major 5 leagues 61 17% Incoming loans from clubs outside major 5 leagues 77 5% Outgoing loans to clubs outside major 5 leagues % Total loans made by major 5 leagues clubs 35% 30% 25% 20% 15% 10% 5% 0% Percentage of loans with monetary compensation on total loans 21

22 to summarize >> Football industry is not different to rest of economy >> Clubs revenue growth absorbed by employee costs >> Redistribution from top to bottom is a fact >> Current transfer system counters competitive imbalance >> Out-of-contract transfers represented majority of total international transfers >> Collection of solidarity contribution has to be enhanced >> Significantly high amount of club agent commissions >> Majority of total international loans involved under 23 players 22