€-Moneyball; High and Low Finance Football

I have not seen any mention of a new purchase. Who are they buying right now? I know there are rumors they are putting Dest on the market, LOL.

 

Yes, Barca have a cap on how much money they can spend. They are going to try to unload some players in January but other teams will not pay market value knowing that the Catalan team is in a money crunch.

 

This is a really good commentary on the current state of transfers:

The End of the Transfer Fee




David Alaba worked the system to get where he wanted to be.Gabriel Bouys/Agence France-Presse — Getty Images



By Rory Smith


The two transfers that drew all the oxygen from the summer of 2021 were both monuments to the past.

Lionel Messi and Cristiano Ronaldo have dominated their sport for a generation. That they are both, now, approaching their autumns did not matter; as soon as the chance to to sign them arose, neither Paris St.-Germain nor Manchester United paused for thought. Any doubt at all about what they might do, how they might fit, was assuaged by what they had done.


Amid all of the noise generated by those two moves — and two of the greatest players of all time changing clubs in the space of a few weeks will generate a lot of noise — another transfer, one that might come to be seen, in time, as a harbinger of the future, rather faded into the background.



That David Alaba had always wanted to play in Spain had long been an open secret. He had, over the course of 12 years at Bayern Munich, won everything there was to win: a couple of Champions Leagues, fistfuls of German titles, a Club World Cup or two. He was part of a Bayern team that won the domestic and international treble. Twice.

It was at Bayern where Alaba became, for a time, the best left back on the planet. And when that was not enough, it was at Bayern where he became one of the world’s best central defenders, too. He was appointed captain of Austria’s national team. And, throughout, he was paid beyond handsomely to do it all, by a club that prides itself on the bond it establishes with its players.

But Alaba harbored a desire, at some point in his career, to test himself at one of Spain’s twin titans, Real Madrid or Barcelona. Though it is slightly awkward to acknowledge it, now, it was never entirely clear if he had strong feelings on which he would prefer. By late 2020, though, it had become obvious he felt the time was right.

Alaba and his representatives had been trying to agree to a new contract with Bayern for some time; his last deal in Bavaria was set to expire in the summer of 2021 — when he would be 29 — and the club wanted to tie him down for the remainder of his peak years. Negotiations, though, were achingly slow. Bayern felt Alaba’s salary demands were too high. They started to suspect there was a reason for that. In October, the club unilaterally withdrew from the talks. Alaba, one of Bayern’s crown jewels, would walk for nothing.


In April 2021, he did just that. Despite interest from at least three Premier League teams, Alaba signed a five-year contract with Real Madrid. Reports in Germany at the time suggested it would be worth far more than Bayern had been willing to pay him: $75 million in total, by some estimates. He also stood to earn somewhere in the region of $25 million as a golden handshake.



David Alaba: Madrid on his mind.Susana Vera/Reuters


What Alaba had done, in an American context, was not especially unusual. He had, in effect, used free agency as a way of maximizing the value of what would be, in all likelihood, the most lucrative contract of his career. It was what LeBron James did first to join the Miami Heat, and then to sign for the Los Angeles Lakers. Kevin Durant did it. Albert Pujols did it. Everyone does it.

In soccer, though, a star of Alaba’s caliber running a contract down has always been — if not quite a unicorn — the exception, rather than the rule.


Quite why that pattern has held is open to interpretation. Players tend to sign long-term contracts, and clubs tend to want them to do so. It gives both sides security, after all. The player knows that their earning power is not dependent on a poorly-timed, lightning-strike injury. The club does not have to worry, every couple of years, about being held over a barrel by an agent.

But that is not the only reason. Contract negotiations are rarely, despite appearances, about money; or, rather, they are always about money, just not about money as an end in itself. They are, invariably, about status. A player’s salary is a measure of how much they are appreciated by their club in relation to their teammates, and their peers. The same logic can be applied to the length of their contract. The longer the team will pay you, the more you must mean to it.


The corollary to all of that is, of course, that teams tend not to want players to reach the end of their contracts. As a rule, should a valuable player enter the last 18 months — or two years, in some cases — of a deal and prove reluctant to commit to a new contract, the club will seek to sell. Put crudely, allowing a player to run down their contract is, in effect, ceding the economic initiative to the asset, rather than the investor.

And yet, increasingly, across European soccer, that is precisely what is happening. Alaba, it seems, may have opened the floodgates. At P.S.G., Kylian Mbappé, the standard-bearer for the sport’s first post-Messi, post-Ronaldo generation, has made it so clear that he wants to leave for Real Madrid on a free transfer in six months that he has even written a comic book on the subject. Reports flutter around Europe every few weeks that a deal has even been agreed.




Kylian Mbappé has made no secret of his desire to run out his P.S.G. contract and move to Real Madrid.Franck Fife/Agence France-Presse — Getty Images

At Chelsea, both Antonio Rüdiger and Andreas Christensen are out of contract soon and both have delayed signing new deals; Real Madrid has been mentioned as a suitor for the former, too.


The saga over Paul Pogba’s contract at Manchester United seems to have been dragging on for so long that it might as well be mentioned in the cave paintings of Lascaux. His deal, finally — for the good of humanity — expires in the summer, too. It is perhaps less surprising that there does not seem to be any great rush to alter that particular situation.

Mohamed Salah, meanwhile, has a little longer to run on his deal at Liverpool. Like Sadio Mané and Roberto Firmino, Salah is committed to Anfield until 2023. But talks over a new contract have reached an impasse. He does not seem especially fazed by that fact. It is almost as if he knows that if a new contract does not materialize, he will be able to name his price to take his talents elsewhere.


It is tempting to assume that the shift can be attributed, solely, to money, too. All of these players — even Christensen, the youngest of all of those mentioned — have earned enough during their careers to make sure their grandchildren never have to worry about income.

They have sufficient financial security to tolerate the small risk that they will pick up an injury before they can land their windfall. The reward is worth it, after all: As Alaba found, a club that has not had to pay a transfer fee can be much more generous with its welcome package.


That is not, though, the only factor. The financial landscape of European soccer has changed markedly over the last two years, a consequence not only of the coronavirus pandemic, but of the chronic mismanagement of the game’s elite teams during the wild, hedonistic years that preceded it.

The vast majority of Europe’s major teams can no longer afford to pay stratospheric transfer fees, not if they can avoid it.


It was telling that, Liverpool’s capture of Luis Díaz apart, the January trading period was characterized by clubs desperately trying to trim their expenses: Barcelona jettisoned Philippe Coutinho and tried to shift Ousmane Dembélé elsewhere; Arsenal offloaded its erstwhile captain, Pierre-Emerick Aubameyang, to Barcelona on a vastly reduced salary; even Juventus, which signed Dusan Vlahovic from Fiorentina, freed up space by handing off two players to Tottenham and, remarkably, Aaron Ramsey to the Scottish champion, Rangers.



Pierre-Emerick Aubameyang's transfer fee suited Barcelona's budget perfectly: zero.Lluis Gene/Agence France-Presse — Getty Images


None of these clubs can afford to hand out the sort of sums that it would take to pry a player from the few of their peers that have weathered the storm well: the likes of P.S.G., Bayern and the vast majority of teams in the cash-soaked, bulletproof Premier League.

Real Madrid, for example, might be able to pay Rüdiger $60 million over four years, plus a handsome arrival bonus (not least because that cost is absorbed over the length of his contract when it is entered onto the club’s books). It could not, though, pay him $60 million over four years, a handsome arrival bonus and give Chelsea $60 million, too.


Even if it could, though, there is no reason to believe Chelsea would accept such an offer. The European champions are bankrolled by a Russian oligarch. There is no price point at which economic logic kicks in, because — like Manchester City and P.S.G. — Chelsea, for all that it attempts to be self-sufficient, does so out of inclination, not out of necessity. It does not have to be subject to economic logic if it does not want to be.

For a player at any of those clubs that has emerged unscathed from the last couple of years to have access to a full suite of options on the market is, then, to reach the end of their contract, or near enough for their current team to blink. Their employers cannot be pushed, so they have to jump.


This is, perhaps, the conclusion soccer has been waiting a quarter of a century to see. Twenty-five years ago, the Bosman ruling turned the sport on its head, enshrining in European law for the first time the idea that a player, when their contract was up, was in complete control of their destiny.

That has been the case for more than a generation, but it is only now that the first few players seem to be breaking from tradition, exploring the full range of possibilities unleashed by that case.


For the overwhelming majority of the rest, of course, that will not be possible: The young, the hopeful, the unsettled and the unwanted will all still have a price, just as they have always done. Some teams will have to sell. Others will be happy to buy.

For the elite few, though, what was once the security of a long-term contract might soon come to be seen as restriction. Rocco Commisso, the outspoken owner of Fiorentina, had it right when he reflected on his club’s being forced to sell Vlahovic, its prize possession, to Juventus, its loathed rival: The player and his agents, Commisso said, had it in their minds from the start to run down the player’s contract, and to keep all the rewards for themselves.


The age of free agency may now be upon us. It might, in time, come to be named the Alaba Model, in honor of the quiet transfer in the noisy summer of 2021 that started it all, the deal that offered a glimpse of the future while everyone was dawdling in the past.




Cutting Out the Middle Tier


Dele Alli, who might get to do more than warm up once he joins Everton.Peter Powell/Reuters


January had been a month of slumber, right until those last couple of days. It was only when Europe’s transfer deadline loomed that everyone suddenly sprang into action. Everton did the most Everton thing imaginable, signing two good players — Dele Alli and Donny van de Beek — who play in much the same position, therefore condemning at least one of them to failure.

Tottenham, too, conformed to type, shipping out Tanguy Ndombélé and Giovani Lo Celso, as well as Alli, only to replace them with Dejan Kulusevski and Rodrigo Bentancur, leaving Antonio Conte with a squad roughly exactly as good as the one he had before all that whirlwind activity, only $50 million lighter.


Much more uplifting, of course, was the news of Christian Eriksen’s signing with Brentford. Eriksen, who will turn 30 on Feb. 14, has not played in seven months, not since he collapsed to the turf and went into cardiac arrest while playing for Denmark at the Euros last summer. His return, then, was different from the money-driven moves and hard-feelings exits as friends, rivals, former clubs and fans lined up to wish him well.

But it is worth pausing on another deal, too, one that attracted a little less hullabaloo: Manchester City’s acquisition of Julian Alvárez, a 22-year-old forward, from the Argentine club River Plate. Quite what City expects from Alvárez is not entirely clear: Some within the club’s hierarchy see him as a potential replacement for Sergio Agüero; others, it seems, feel he may spend time at City’s network of clubs before arriving in England.


Either way, his arrival — as well as that of the 17-year-old wing Zalan Vancsa — illustrates the next phase in City’s attempts to reshape soccer’s established order in its favor. The transfer market, ordinarily, functions as a pyramid. Players move up the tiers at ever increasing cost; those at the top pay a premium to avoid risk.



Is Julián Álvarez Manchester City's next big thing?Natacha Pisarenko/Associated Press


In the ordinary run of things, then, Alvárez might have moved from River Plate to — say — Benfica. Benfica would pay $20 million: a large bet, of course, but not an astronomical one. If he succeeded, then perhaps he would move to Atlético Madrid for $50 million, the price having risen because Atlético could be more certain that he would be a success.

Only after he had passed that step would a team of City’s profile — one expecting to win the Premier League, and hoping to lift the Champions League, too — step in and pay $80 million or more for a player it could almost guarantee had the quality to contribute.


It is, of course, in City’s interests to short-circuit that process, to have a scouting process so refined and so sophisticated that it can tell who will succeed and who will not without being forced to pay Roma and Atlético and all the other denizens of soccer’s (financial) second tier to find out. It is to the club’s credit if that is the case.

Whether it is in the game’s interests is less clear. Money trickling down through the transfer market is the closest thing soccer has to a solidarity mechanism. Flipping players has long allowed countless clubs — Lyon and Porto and Sevilla and Borussia Dortmund among them — to compete despite massive financial disparities.


Clearly, there is a sense among the elite that such an approach does not work for them (and, let’s be clear: it doesn’t). In their eyes, the risk is now worth the potential reward. True, City may not have a use, in the long run, for either Alvárez or Vancsa. In that case, they will be sold. And the profit — and there will, in all likelihood, be a profit — will not be banked by a club in desperate need of it, but by one of the richest teams on the planet.

 

@feyenoordsoccerfan - I don't know the ins and outs of the EU parliamentary system but wonder if they can pass a law that restricts a legal contract. Of course it is irrelevent to the EPL, the richest of all the Euro leagues.

 

ManU has historically been a very strong club. ManCity only rose because of oil money from the mid-East. Absent that they would still be no better than a mid-table club.

 

This is a great column from Rory Smith and pretty much hits the target regarding Abramovich and the other big money investors. It's what is destroying football but it's difficult to see how to stop it.




March 11, 2022


The End of the Oligarch Era





Roman Abramovich, in better days.Michaela Rehle/Reuters



By Rory Smith


There were, over the years, three stories that explained how Roman Abramovich washed ashore at Chelsea. Each one, now, serves as a kind of time capsule, a carbon-dated relic from a specific period, capturing in amber each stage of our understanding of what, precisely, soccer has become.

The first took root in the immediate aftermath of Abramovich’s takeover of Chelsea. It was light, fuzzy, faintly romantic. Abramovich, the tale went, had been at Old Trafford on the night in 2003 when Manchester United’s fans stood as one to applaud the great Brazilian striker Ronaldo as he swept their team from the Champions League.


Abramovich had been so smitten, it was said, that he had decided there and then that he wanted a piece of English soccer. He considered Arsenal and Tottenham and settled on Chelsea, drifting bohemian and glamorous just below the Premier League elite. He had fallen, so hard and so fast, that he bought the club in little more than a weekend.

And that, at the time, was almost enough. It was absurd, alien, the idea of this unimaginably wealthy enigma suddenly descending on Chelsea, lavishing hundreds of millions of dollars in transfer fees as if they were nothing. But it was flattering, too, in those early days of Londongrad, of Moscow-on-Thames, as the stuccoed houses of the capital’s finest streets were filling with Russian oligarchs, the country’s finest schools thronging with their children.


All of it appealed not just to the laissez-faire approach of Tony Blair’s Britain — come one, come all, as long as you can pay for the price of a ticket — but to the ego of both the country as a whole and the Premier League in particular.

Russia’s young plutocrats had more money than Croesus, more money than God, money that could buy anything they wanted. And what they wanted, more than anything, it seemed, was to be British. Abramovich wanted to be British so much that he had bought a soccer team, a plaything in the self-styled greatest league in the world. His money added just a little extra spice, a further dash of glamour, to the Premier League’s endlessly spinning drama; his money served to make the great English soft power project just a little more enticing.




Eaton Square in London, known as Red Square for the wealthy Russians who call it home.Andy Rain/EPA, via Shutterstock

It was only a few years later that the second story emerged, in the aftermath of the jailing of Mikhail Khodorkovsky and the poisoning of Alexander Litvinenko. Perhaps, the idea was floated, Abramovich had not fallen in love with soccer; or, rather, he had not only fallen in love with soccer. Perhaps he did have an ulterior motive. Chelsea, after all, did not just provide him with access to the very highest echelons of British society; it gave him a profile, a fame, too.


He did not seem to relish it, particularly — “one day they will forget me,” he had said, in one of the rare interviews he has granted since arriving in England — but he seemed prepared to believe it a price worth paying. Being an oligarch was a dangerous business. Chelsea, perhaps, was Abramovich’s security against the shifting tides in the Kremlin.

That was the story we told ourselves as Chelsea went from usurper to establishment, the club that initially inspired the idea of cracking down on arriviste wealth suddenly recast as one of its foremost advocates. It was the story that took root as Chelsea racked up Premier League titles, as it conquered Europe not once, but twice: that soccer was the sanctuary, the ultimate mark of acceptance.


It was only, really, when others started to adapt Abramovich’s playbook that the narrative was challenged. First one and then two Premier League teams fell under the aegis of nation states, or of entities so closely aligned to nation states that it can be difficult to tell the difference unless you really, really want to squint. The idea of sportswashing bled into the conversation. The sense that soccer was being used took root. Abramovich’s possible motives were reconsidered.

And then, on Thursday, we saw for the first time — plain as day — what the purpose of it all had been, the story in its true, unvarnished form. For two weeks, the British government had dallied over applying sanctions to Abramovich, not necessarily the richest or even the most powerful but still by some distance the most high-profile of all of the caste of oligarchs, the face of oligarchy in the west.




Abramovich's wealth remade Chelsea, and the Premier League.Ben Stansall/Agence France-Presse — Getty Images

A surprising portion of those two weeks, it turned out, had been spent trying to find a way to make sure that Chelsea could continue to function, roughly as normal, once Abramovich’s other assets were frozen. The players, the staff and the fans — especially the fans — must not suffer, the government said. A few hours earlier, Russian artillery had shelled a maternity hospital in Mariupol, Ukraine. But the government was clear: The sanctity of the Premier League could not be sullied.


That was the purpose all along, it seemed. Abramovich probably did cherish the profile that owning Chelsea brought him. He certainly seemed to relish the sport.

But mainly, he had come to soccer because it entangled him in British society in a way that owning any other business simply would not. None of the other oligarchs who have been sanctioned have been given a bespoke “license” to continue operating one of their businesses. That is not, after all, how sanctions are supposed to work. It had taken us 19 years, and the death of thousands of Ukrainians, to realize that, to see the world as it was.


Now, at last, we know why Abramovich was here. Now, at last, we can begin to understand the price we have all paid. It is not only Chelsea that must now face up to an uncertain future: not only the next few months, as the club picks through the thicket of restrictions on its existence — its club store closed, its hotel no longer permitted to sell food and rent rooms, its crowds restricted to season-ticket holders — but beyond, too.

The club could yet slide into bankruptcy, sold off to the highest bidder by the government. Or perhaps it will wither, slowly and irrevocably, its players leaving whenever they are permitted, the club unable to sign replacements. Maybe there will be peace, and an easing of the sanctions, and maybe Abramovich can recoup his investment and his loans. No matter how it plays out, there is no going back. The fans do not, and cannot, know what comes next. It is up to them to decide if the memories and the trophies were worth it.




Mason Mount and Chelsea beat Norwich City on Thursday in their first game since the sanctions against their owner were announced. Darker days may lie ahead.Chris Radburn/Reuters

The echoes of Abramovich’s swift, abrupt exit, however, will carry out further into the game. His arrival marked the start of what will come, in time, to be thought of as soccer’s oligarch age. It was Abramovich, as noted last week, whose arrival kick-started the inflationary spiral that has fractured European soccer beyond repair, with only a handful of clubs hoarding all of the wealth of the game, ruthlessly stripping its natural resources for their benefit.


His departure will prove to be no less epoch-defining. Modern elite soccer is built on growth, the conceit that there is always more money out there. That is why Real Madrid and Juventus and Barcelona want, so fervently, to launch a European Super League, because they are convinced that if only they did not have to deal with UEFA, they would be able to harvest the bottomless riches of all of the broadcasters and sponsors desperate to fill their accounts.

It is why UEFA has been so determined to expand the Champions League, so convinced that it can find the money to satiate the boundless greed of the great and the good. All of it is based not only on the idea that the golden goose will keep laying, but the faith that there are a hundred, a thousand more golden geese out there, a whole flock of them.


If that was ever true, it is not now. UEFA will find another sponsor for the Champions League to replace Gazprom, but it will not find one that is quite so generous. There is, after all, a premium to be paid for exercising soft power. Exponential growth is rather more challenging when one of the prime drivers of it has closed down.

So, too, the clubs face a reckoning. Not only the teams owned by princelings and nation states and politicians, but those that are not. It is not just the promise of soaring television rights deals that have drawn the “acceptable” investors into soccer, the private equity groups and the hedge funds and the Wall Street speculators. They have no more fallen in love with the game than Abramovich.


All of them have bought in to get out, at some point in the future, when they have made their clubs as profitable as possible, when the prospect of a lucrative return is at hand. And yet, all of a sudden, they find their list of potential buyers limited. Qatar, Abu Dhabi, Saudi Arabia: They all have their clubs now. The great gushing of cash from China ended years ago, as Inter Milan might attest. Now Russian money is out of the question, too.



Chelsea, owned by Russian money, faces Newcastle, owned by Saudi money, on Sunday.Justin Tallis/Agence France-Presse — Getty Images


There is no shortage of the rich and the powerful and the speculative, of course, even with those markets closed up and sealed off. But those that remain are a different type of buyer: They are other private equity firms, other hedge funds, other Wall Street and Silicon Valley types. They are, for the most part, the ones who want to make a profit. They do not want to be the ones who buy at the peak of the market. They did not make their money by being the sucker.

That might seem, perhaps, a little indistinct, a touch theoretical, but it has real consequences. It means reassessing how much profit might be made, and how large the payout might be. That, in turn, means altering the equation of how much it is worth putting in. The change will not be immediate, overnight, dramatic. But it will be a change nonetheless.


That will be Abramovich’s ultimate legacy, the lasting impact of the era he began on what seemed to be a whim and he ended, in the space of a couple of weeks, in the middle of a war. Soccer’s age of the oligarch is over. This time, there can be no excuse for failing to understand what the game has become. On that, we have clarity. Where it goes from here remains shrouded in doubt.