“The more you spend, the more you win”- an undisputable truth?


Each season, the summer and winter transfer windows gain in importance, both as a time to strengthen teams and as a media sideshow. These windows also provide an opportunity for clubs to enhance the value of their squads and, in some cases, leverage player trading activity to optimise their books.

In this article, the KPMG Football Benchmark team analyses the average net player trading activity, between the 2011-12 and 2014-15 seasons, of the most prominent European football clubs by Enterprise Value (EV), as featured in the KPMG Football Clubs’ Valuation report.

Whilst player trading activity is defined as the result of different accounting items, profit/loss on disposal of players’ registrations and amortisation usually account for most of the player trading activity figure. The Profit/Loss on disposal represents the difference between the income related to the sale of players and the net book value of the player at the moment of the disposal. The Amortisation outlines the capitalised costs associated with the acquisition of players’ registrations spread out over the period of each player’s contract.

A positive balance of player trading activity is the result of profits from transfers exceeding the annual amortisation of the squad. On the other hand, the more negative the final balance is, the higher the investment the club have committed to enhance their squad.

Only 25% of the 32 clubs under review recorded positive average net player trading activity between 2011-12 and 2014-15, a clear indication of how the leading European clubs focus on, and prioritise, ongoing improvement of their squads in order to maintain on-pitch competitiveness.

Unsurprisingly, the Top 10 clubs by Enterprise Value are also, with the exception of Arsenal FC, those at the bottom of average net player trading activity. In this case, Arsenal’s spot has been occupied by FC Internazionale Milano, a club that have invested significantly in recent years to recapture past glories. Meanwhile, the Gunners, with a negative figure of just EUR 10 million, have generated significant profitability from the disposal of players without eroding purchasing power for the acquisition of new squad members. Indeed, in 2013 and 2014, Arsenal signed their two most expensive players in Mesut Özil and Alexis Sanchez.

In contrast to the European superpowers, clubs with lower Enterprise Values in KPMG’s Valuation Report have less prominence on the international stage, and need to enhance income streams through the disposal of players.

The two leading Portuguese clubs, FC Porto and SL Benfica, top the table of the average player trading activity with EUR 22.6 million and EUR 22.1 million, respectively, followed by Spain’s Sevilla FC (EUR 12 million), AFC Ajax of the Netherlands (EUR 8.9 million) and England’s Tottenham Hotspur FC (EUR 6 million). While Tottenham’s numbers are inflated by a record-breaking, one-off disposal (Gareth Bale to Real Madrid CF in 2013), the other clubs represent a virtuous example of player trading activity.

It is interesting to note how Sevilla FC, with a strategy based on efficient re-investment of the profits from players’ disposal, have been able to establish themselves as real contenders after Barcelona FC and the Madrid pair of Real and Atlético. While Sevilla’s domestic success may have been limited, they have gained international recognition, winning three successive UEFA Europe Leagues.

If Sevilla FC are the proof of how sporting results can coexist with sustainable management, Atlético de Madrid, and to some extent Borussia Dortmund, took this concept to the next step.

Atlético’s stream of high-profile player sales have yielded regular transfer fee income, evidenced by an average net player trading activity (negative by only EUR 1.7 million) that is impressive for a club able to win LaLiga, the UEFA Europa League and reach two UEFA Champions League finals[1]– in an era dominated by Barcelona FC and Real Madrid CF. In Germany, competing with the superpower of FC Bayern Munich, Borussia Dortmund won the Bundesliga (2012) and reached the UEFA Champions League final (2013) during the analysed period, recording a positive average net player trading activity of EUR 1.4 million.

Football economics would suggest that “the more you spend, the more you win” and to some extent, the clubs with the money to buy the best players will always rise to the top. However, there is still room for prudence and financial acumen, as seen in the examples of Sevilla FC, Borussia Dortmund, and notably, Atlético de Madrid.

The stories of these clubs are not only a benchmark that many clubs outside the very top bracket can learn from, but also an inspiration. While it will always be a major challenge to compete with the resources of the giants of the football world, the success of these clubs show the benefits of adopting efficient and creative strategies based on the remunerative disposal of players along with intelligent squad-building that acquires and develops future playing assets.

Further investigation into this and related topics, as well as analysis of industry data, can be undertaken for you by KPMG Sports Advisory 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] To learn more about Atlético de Madrid’s turnaround story, please click here.