2016-17 record transfers: Inflated expenditure or within industry standards?


With a reported fee of EUR 105 million, Paul Pogba’s return to Manchester United from Juventus surprised many fans and industry watchers as the French midfielder became the most expensive player in football history. This transfer came shortly after the equally eye-catching EUR 90 million move of Gonzalo Higuain from Napoli to Juventus, a figure made more remarkable by the reduced current status of Italy’s Serie A.

The KPMG Football Benchmark team has analysed the correlation between fees paid for the transfer of the most expensive footballers in recent years and the operating revenues of the clubs at the point of acquisition. Although some major transfers, such as Juventus’ purchase of Higuain, are undoubtedly the consequence of the sale, or expected sale, of another player - in this case, Pogba - the analysis provides an idea of the top clubs’ eagerness to spend on marquee players.

Equally notable is the importance of sizeable transfer fees to the selling club. Some undoubtedly need transfer turnover as part of their financial planning, but the impetus of the type of fees received by Juventus and Napoli, for example, cannot be overlooked. Pogba’s sale represented more than 30% of the club’s operating revenues, some way off the 57% of revenues that Tottenham received from Real Madrid when they sold Gareth Bale in 2013, but nevertheless very impressive.

A review of the most expensive football transfers in each year since 2007 demonstrates major clubs’ appetite to spend approximately 20% of their operating revenues on a major signing. In fact, during the analysed period, only two of the most expensive signings of the year seem far from this figure. For example, at one end of the scale, David Villa’s move to FC Barcelona in the summer of 2010 accounted for no more than 10% of the operating revenue of the Catalan club at that time. By contrast, Robinho’s move to Manchester City, the first after the club’s takeover by the Abu Dhabi United Group in 2008, was 41% of The Citizens’ operating revenue in 2007-08.

When compared to Manchester United’s 2014-15 operating revenue (2015-16 data not yet available), the transfer fee paid by the club for Paul Pogba seems in line with the industry standards of the past decade. Moreover, once adjusted to take into account expected operating revenue growth to be published for the football season 2015-2016, the transfer fee to operating revenue ratio of the Pogba transaction seems likely to be well below 20%[1].

Conversely, Gonzalo Higuain’s EUR 90 million transfer to Juventus FC is equivalent to 28% of the Turin club’s 2014-15 operating revenue. However, once adjusted to the 2015-16 figures, the ratio of the Argentinian striker’s move is more likely to be comparable to that of Cristiano Ronaldo when he moved to Real Madrid in 2009 (23%) and certainly above 20%[2].

Across European leagues, transfers with a higher fee to operating revenue ratio were more commonplace in the pre-financial fair play era. At an extreme level, these included the aforementioned Robinho deal and Real Madrid’s signing of Zinedine Zidane in 2001, the latter an astonishing 53% of the club’s operating revenues in the previous season. When looking at the metrics, the most ambitious transfers, when compared to the actual means of the acquiring clubs, are likely to come in future from the Chinese Super League where, for example, Shanghai SIPG signed Hulk for an outlay estimated to be above the club’s total revenues.

Despite limitations due to the absence of some most recent financial statements, KPMG Football Benchmark team’s analysis seems to prove that, although transfer fees will command the attention of media and fans, the recent fees paid by Manchester United and Juventus FC are in line with market trends of the past few years. Actually, transfer fees may continue to rise as a result of the overall growth of the football industry and the part being played by certain players in boosting clubs’ commercial revenues.

Further investigation into this and related topics, as well as analysis of industry data, can be undertaken for you by KPMG’s Sports practice. Our subject matter experts can also assist stakeholders in assessing and interpreting the potential impact on their organizations of any particular piece of research, identifying the underlying reasons behind specific trends or developing potential solutions and considering future scenarios.

[1] As of March 2016 Manchester United reported 31.6% year-on-year revenue growth.

[2] As of March 2016 Juventus reported 28.4% year-on-year revenue growth.