Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively less...

Discussion in 'The Beautiful Game' started by pc4th, Feb 11, 2007.

  1. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    than baseball players or basketball players?

    Assume that the elite players transfer from a BIG CLUB to another BIG CLUB (not from South America to Europe).

    Here's my analysis.

    #1: REVENUE: The top 10 football clubs are earning a lot more than the top 10 baseball teams

    1 EURO = $1.3 EXCHANGE RATE

    1 (1) Real Madrid €292.2m €275.7m

    2 (6) Barcelona 259.1 207.9

    3 (4) Juventus 251.2 229.4

    4 (2) Man United 242.6 246.4

    5 (3) Milan 238.7 234.0

    6 (5) Chelsea 221.0 220.8

    7 (9) Inter 206.6 177.2

    8 (7) Bayern M 204.7 189.5

    9 (10) Arsenal 192.4 171.3

    10 (8) Liverpool 176 181.2

    #2 Transfer fee expense YEARLY for football clubs

    With the rare exceptions, baseball teams do not have a transfer fee expense.

    Average transfer expense per year (from 2001 to 2005).

    Chelsea: $83.7 million a year
    Real Madrid: $41.67 million a year
    Manchester United: $36 million a year
    Barcelona: $25 million a year
    AC Milan: $22 million a year

    How would the like of Yankees and Dodgers fare if they have a $40 million expense each year instead of ZERO?

    #3: Yearly salary for elite soccer players relative to elite baseball and basketball players

    MLB

    NBA

    Soccer

    Around $10-12 million for the elite players. Ballack and Henry are among the top 5 earners.

    #4: IF the elite soccer teams has no transfer expense, they would have $30-40 million EXTRA each year, what would they do with this money????

    They likely use 60% or more of that to attract top talents. Thus, salary increases.

    p.s. This is not a popular topic because the thread is suggesting that elite football players who are earning WAY WAY TOO MUCH might be able to earn a lot more. However, this is for academic, the WHAT IF question. WHAT IF the elite soccer clubs have zero transfer expense and get all the players on free like American Big Four Leagues (NFL, NBA, MLB, NHL)? What would happen to the elite soccer players salary? Increase? Decrease? Stay the Same? If you don't want to discuss this, please stay away from this thread.

    Also, as an observer and researcher on this topic, I believe that transfer fee will be part of the game for many years to come. (unless all the elite players decided to sign an agreement to ALL go on a free transfer). So don't worry, they won't be earning 1.5 times their current salary anytime soon.
     
  2. Catel

    Catel Member

    Dec 18, 2006
    Lyon, France
    Nat'l Team:
    France
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Soccer, NBA or MLB, it's TOO MUCH !

    I don't understand how you can be paid 20M per year for putting a ball on a net...
     
  3. Prenn

    Prenn Member

    Apr 14, 2000
    Northern Ireland
    Club:
    Bolton Wanderers FC
    Nat'l Team:
    England
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    FFS, here we go again...
     
  4. Naughty by Nature

    Naughty by Nature New Member

    Oct 11, 2005
    Earth: Europe : ??
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    5 top Yankee players are paid a combined 95 million a year, that is too much.

    Lets look at European way, take Real Madrid wages then:

    Beckham & Raul : $12 million a year,
    Casillas : $11 million a year
    Van Nistelrooy: $9 million a year
    Cannavaro: $8million a year

    5 top Real Madrid players are paid a combined 52 million a year. Real Madrid saves 43 million on wages for thier 5 top players and can use that money for a possible transfer.
     
  5. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    The US market operates under a monopolistic system and there is no outlet for those players. Those are not optimal market conditions which is why this occurs.
    This is simply not, in any way, comparable to football.
     
  6. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    If there were only 50 clubs in Europe and no other clubs could be promoted or relegated, with that 50 club league signing its TV rights away in a combined package, football players would earn vastly more than baskebtall or baseball players.
    The US has 32 teams (approximately) in both major sports for a population of about 300 million. Europe has THOUSANDS of clubs for a population of 450 million. Therefore, if there are about 10 million fans per club in the US, there are 10,000 fans per club in Europe. See why clubs in Europe have less money?
     
  7. leg_breaker

    leg_breaker Member

    Dec 23, 2005
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Why does he have to post this over and over again?
     
  8. comme

    comme Moderator
    Staff Member

    Feb 21, 2003
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Unwitting genius!!

    Repped.
     
  9. Leto

    Leto New Member

    Aug 23, 2001
    Donegal,Ireland
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Exactly. Why is this so hard for some people to comprehend?
     
  10. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    high class hookers & cocaine?



    Look, next year clubs in the premiership will have an extra £10 million to spend. They could decide to lavish it on their star players, or maybe they'll keep salaries proportionally the same like they have done with every single other jump in cash that there's been.


    American sports pay huge salaries to stars and peanuts to the rest because that's the way things work there. It's not about finances as they do exactly the same in MLS, paying low-end premiership wages to the top players, and making the lesser players earn salaries that make them envious of the big earners at the KFC drive-in window. It's just sporting culture, and it works because those lesser players have no choice.
     
  11. guado

    guado Member+

    Jun 30, 2004
    ocotengo miedo
    Club:
    Inverness Caledonian Thistle
    Nat'l Team:
    Indonesia
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les


    you got to be kidding......


    shut up already.
     
  12. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    That's not true - the average salary of an NBA or an MLB player is quite high. There's more disparity in the US, but that's only because all salaries are higher to begin with.

    For pc4th, keep in mind that the NBA has a requirement that a certain percentage of league revenue must be allocated to the salary cap (i.e., to be spent on player salaries). That ensures this disparity.
     
  13. impalemeplz

    impalemeplz Member

    Jul 7, 2004
    Sydney
    Club:
    Arsenal FC
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    i think its the same in the NFL where a certain percentage is allocated for salary cap but then you have the "tightass" pats and eagles who will not pay up and leave more then 10 million off the cap.

    this brings us to the point of free agency and these self imposed salary caps that the eagles and pats have makes free agency even more rampant. cant really blame them tho cause it has brought them winning records over the last 6 years with both teams missing the playoffs only once each.
     
  14. Paul_NL

    Paul_NL Red Card

    May 18, 2006
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Hopefully there will be a salary-cap one day in the mold of the NHL. Works perfect

    Only way you could maybe change is that every team can assign 2 or 3 players who have been with a team very long and can earn more then the cap allows
     
  15. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    http://sport.independent.co.uk/football/news/article2264655.ece

    Lampard to hit pay jackpot over rule
    By Nick Harris
    Independent 13 February 2007


    This is not EVEN A FREE TRANSFER. And yet Lampard could be earning the BIG BUCK.

    An example of how Upson could have earned a bit more money if he decided to become a free agent/ Article 17 player.

    Here's a very detailed news piece about this Article 17 if you want to read about it.

    http://sport.independent.co.uk/football/comment/article2264652.ece
    Stars will buy into 'pay as you go' system
    An obscure Fifa rule could revolutionise the way the transfer market operates. Nick Harris reports
     
  16. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    So if the US market is not monopolistic (it is free market instead) doesn't that mean the basketball/baseball players would get paid EVEN more? Imagine how the top baseball players would be able to get if the Yankees or Red Sox don't get tax for overspending.

    All that matter is SUPPLY for Elite soccer players and DEMAND for Elite soccer players. The equilibrium will determine the price.

    Supply of elite players = limited
    demand for elite players = depends on how much Man U/Chelsea/Real/Barca/Milan/Juventus are willing to pay. If they have $40 million extra each year because there is no transfer fee expense, you can bet they will spend a big chunk of that $40 million to attract these elite players. Hence, the wages of these elite players will increase. It's simply logic really.

    Example: Man U/Chelsea/Real/Barca/Milan/Juventus has $150 million for player payroll. Because they have ZERO transfer fee expense, they now have $190 million to spend. Guess who benefit?
     
  17. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    http://sport.independent.co.uk/football/comment/article2264652.ece

    IN A FREE TRANSFER/FREE AGENT MARKET like in the U.S., the elite players would all do a Ballack. Wouldn't "many of Europe's biggest clubs would jump at the opportunity"? To sign an elite player for ZERO transfer fee.

    http://sport.independent.co.uk/football/comment/article2264652.ece
    And lastly, think of the free agent Beckham. Elite players are learning a thing or two from Ballack and now Beckham. Soon, more and more elite players will become free agent and reap the profits.
     
  18. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    You're WRONG. Elite clubs in Europe has more money than American elite clubs. Compare the revenue of the top 5 European clubs vs. the top 5 baseball clubs and you see that elite soccer clubs clearly dominate the elite baseball clubs. And that is all that counted because elite clubs are the ones that are employing the star/elite players. Why compare the Tampa DevilRays and Wigan of the world when they are not employing a Ronaldinho a Henry, or a Ballack.

    This thread is about the elite players, not the average players nor even the above average players. I am just talking about the salary of the Elite soccer players (15-20 players out of thousands of professional players).

    If you are still not convince, let's compare Yankees vs. Manchester United with both having the same revenues and the same number of players.

    -------------------NY Yankees -----Manchester United
    Revenue: ---------- $300 mil --------$300 mil
    Transfer expense:---$0--------------$40 mil
    Wage expense: ----$240 mil --------$200 mil
    Profit:--------------$60 mil ---------$60 mil

    From the above, the Yankees are able to pay more for these elite players than Manchester United because the Yankees has $240 million and Manchester United only has $200 mil even though everything else are the same.

    Because of having $0 as transfer fee expense, instead of $40 mil each year, the Yankees can afford to offer FIVE elite players $8 million more each year and still make the same profit as Man U. So if the like of Chelsea/Man U/ Real/Barca/ Juventus have $40 mil extra each year, they can pay FIVE elite players $8 mil more each year. That's one major reason why elite soccer players are earning relatively less. And why if all the elite players go on free transfers, they will make a WHOLE LOT more.
     
  19. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Do you have links for these numbers? There are more issues, of course - Utd. have 11 starters, while the Yankees have at least 17 (5 starting pitchers, a closer and then the 11 position players). The nature of baseball (easily translateable; you know what you get, as opposed to buying expensive talent from another league, less chemistry required, etc.)

    Furthermore, you don't understand markets - because there are so many more clubs, the prices of the top talent will be depressed. That's how it works. The bigger the market, the fewer the imperfections.
     
  20. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Same as they do now. The luxury tax hasn't stopped the Yankees and the Red Sox from being in the salary stratosphere.

    There is no cut-off for "elite" versus "non-elite". Who is one and who is not? Furthermore, unlike the US, where you can construct a fantasy lineup in baseball and have it work, it won't in the US. You can have a great player at every position in baseball, you can't in football. You need water-carriers. Furthermore, while it is easy to determine who is "better" by easily measurable statistics in baseball, you can't in football. Is Eto'o a better striker than Henry? ******** if I know. No one does.

    Except that things are generally more complicated than you think. Lets say Chelsea gets more money. How many more "elite" players can we buy? Seriously, who else do we need? Where would they play? Its not like baseball where you can have three awesome outfielders or 5 top of the line starters. It doesn't work like that.

    The owners from pocketing the extra money, most likely. Why pay that money to players when there's no real competition? If you're competing with 5 clubs on salaries, they'll never rise too high. There are far more "elite talent" attacking forwards than there are clubs who can buy at the "elite level". Therefore, players want to play for those clubs as much as clubs want to buy them. And you can't hoard them, because having Ronaldinho and Riquelme playing alongside each other is pointless. Baseball is not football and your examples don't work.
     
  21. aloisius

    aloisius Member

    Jul 5, 2003
    Croatia
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Except that Barcelona and Real are non-profit entities. They could either spend the money on players or leave it on the club’s bank account.



    But having the best player you can get at every position is not . that’s what Chelsea have done and it’s been extremely successful.


    There have only been a few top players who have played out their contracts and became free agents while they were still young enough . Mcmanaman, Campell , Ballack and Beckham . all of them signed great deals after that, better than they would have got if they moved while under contract.


    It’s hard too argue that players couldn’t make more money if they played out their contracts.
     
  22. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Are you sure they're non-profit? If so, Real and Barca are the exception. (I had thought they were owned by socios, which isn't that different than being owned by shareholders, really.) But given that they need to win every year, they're more likely to spend that money on transfer fees now. Why do they care that players might make more? They need to win NOW. That means they need the players they do NOW. If Real were to have the chance to buy Ronaldinho this minute for 50M or "only" pay him 25M of that in two years, which would they take? Its not even a question.
    I should also add that certain baseball teams would looove to have the system football does. Imagine - the Yankees could buy a player from another team instead of trading value for him. To a team that's already out of contention, its a great idea.

    Do Chelsea have that though? Ironically Chelsea have been LESS successful when adopting that strategy. Look at Chelsea's previous purchases (until this summer). Players like Essien, Drogba, Crespo, Cech etc. were never seen as the best in their position. Oh, to be sure, Chelsea buy excellent players. But they're hardly the best in the world at their positions. Of the three players that most frequently make their way into a World XI for Chelsea on their club form are Lampard, Cech and Terry. None of whom were bought because they were the best at their position at the time.
    Its not nearly as simple to say who's the "best" player in the world in football. Remember when Veron was the best midfielder in the world? How'd that work out for ManU?

    Yes, but that's not his point (this time). That argument has been done to death, but it has its issues as well. Given that players sign new deals when they're transferred, they're essentially negotiating those contracts all the time. Also, a player out of contract who picks up an injury completely loses his payday. Imagine if Ballack had blown out his knee the day before he was set to have the medical for his Chelsea deal. What's he to do then?
     
  23. Leto

    Leto New Member

    Aug 23, 2001
    Donegal,Ireland
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Greedy bastard. Never happy, are you? All this 'inflated salary' talk seems to be going to your head.

    ;)
     
  24. aloisius

    aloisius Member

    Jul 5, 2003
    Croatia
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Real and Barca can’t pay out the profit to their socios, so they’re not like shareholders.

    All the club income stays in the club.

    All German clubs are structured in the same way.






    Players that Chelsea have signed are the best in the world that were willing to come to Chelsea. If Ronaldinho or Henry were willing to come, abramowitch would be writing the checks .

    Cech was already one of the best keepers when he was signed. Juve weren’t selling Buffon, Real wouldn’t sell cassillas. Other top keepers were already in their thirties, so cech was the best you could get.


    Essien had a couple of excellent seasons in the champions league before coming to Chelsea. Who could you have wished over him?

    As for this season’s purchases…

    I think most people weren’t thrilled with Drogba before this season. Schewchenko was signed to replace him in the starting lineup. Only that seamed to fire up drogba who turns out to be a more useful player for this chelsea team. That leaves Mourinho with a bit of a problem; that is what to do with schewchenko ? If he had just continued playing 433 with only one of Drogba and Schewa I believe Chelsea would probably be top of the table right now.

    Any 3 of makelele , essien , lampard and ballack could form an excellent midfield. It’s when mourinho plays all 4 of them that it gets awkward for everyone .


    I think clubs have an appreciation of a player that they didn’t have to pay a fee to get. That’s what they get better contracts.

    Also, when your out of contract you can let more clubs do the biding. Some might not have been willing to pay the fee your club was asking for you a year ago, but are willing to give you the higher wages. it gives you more options.




    Yeah there is that risk, and that’s what everyone has to decide for himself. Safe money now or more money later , with the risks that come with such a decision.

    On the small sample (4) of top players that have let their contracts run out, we can se that they all benefited from it. There are a few others who have also done well by doing that. Ailton , van Bomell, R. Kovac. Saviola will be free in the summer, so will Steve Sidvell :D . Lets see what happens with them.
     
  25. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    But in the free agent/free transfer market, there will be elite players available each year. If not Ronaldinho now, it would be somebody else who is almost as good. And in two years time, it would be Ronaldinho.

    In this hypothetical world, these elite players (top 20-30 players in the world) play out their contract instead of transfering and signing a new deals. This is what is happening in American sports.

    It's GREAT for these baseball teams especially the selling teams. I agree with you.

    But it's NOT SO GREAT for the star/elite baseball players. The Yankees couldn't care less if they are paying $100 mil over 5 years with $10 mil in salary and $50 mil transfer fee or $20 mil a year with no transfer fee. All it will cost them is $100 mil. But to the elite player, it is a HUGE difference. $10 mil a year vs. $20 mil a year. That's the point I am getting at.

    Do you really think that the Texas Rangers would agree to pay Alex Rodriquez $25 mil a year if they also have to pay $50 million in transfer fee to the Mariners? I don't think so.

    Do you think the Red Sox would pay Randy Ramirez $22 mil a year if they also have to pay $40 million in transfer fee to his former team?
     

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