Player trading – the new reality with COVID-19


The coronavirus pandemic has caused major disruptions in the football industry: while the wounds of clubs’ lost earnings and fans’ frustration on missing the stadium atmosphere might heal as time passes, some effects are likely to last longer. Even prior to the pandemic, there was considerable anxiety in the football industry that the observed inflation of transfer fees and salaries could be placing considerable pressures on clubs' finances, indicating the issues they could face from a future decrease in income. The onset of COVID-19 realised this fear with devastating impacts on clubs' revenues and cash-flows, with long-lasting consequences on broadcasting, commercial, matchday income and player transfers. Football clubs were forced to adapt operationally and strategically to maintain competitiveness and financial stability. A number of key areas of focus for football clubs during the pandemic have been: addressing playing staff costs, rethinking player transfer market activity and strategy as well as increasing emphasis on developing home-grown talents through clubs’ academies. With the end of the season’s winter transfer period behind us, the KPMG Football Benchmark team has analysed this season’s trends (2020 summer and 2021 winter windows combined) on the transfer market including a comparison to pre-Covid times. 

In 2014, the football industry was stunned when Gareth Bale joined Real Madrid from Tottenham Hotspur, becoming the first football player in the world for whom a fee in excess of EUR 100m was paid. Only three years later, the value of Bale’s move was shattered following the completion of Neymar’s transfer to Qatar-owned club Paris Saint-Germain for an unprecedented EUR 222m – a record which still stands. With the purchase of Kylian Mbappé from AS Monaco one year later for EUR 145m, PSG had spent more than EUR 350m in two consecutive summer transfer windows for just two players. However, COVID-19 has abruptly curtailed the extensive amounts of money involved in transfers, as clubs are suddenly faced with severe financial losses and forecasting uncertainty.

When the first wave of the COVID-19 pandemic hit the football landscape in early May 2020, a report by KPMG Football Benchmark predicted significant shifts in player trading activities given the financial constraints clubs had to face: A decrease, both in the volume of transactions and in the transfer fees, and an increase in the number of swap and loan deals was forecasted. In fact, according to FIFA’s annual Global Transfer Market Report 2020, there was a decline in global transfer activities for the first time in the last ten years. Total transfers of professional male footballers dropped from 18,047 in 2019 to 17,077 in 2020, a decrease of 5.4%.

Now, following the completion of the recent January transfer window, we have assessed the 2020/21 season’s transfer market developments and trends in full and with a comparison to those in pre-Covid times. Comparing the value of squad investment during the pandemic affected 2020/21 season (summer and winter transfer periods combined), clubs across the big 5 European football leagues spent almost 50% less on transfers compared to the previous season. English Premier League clubs remained the main spender: while they showed relatively low activity in January, they were busy in the past summer window, when clubs of other top European leagues were already more moderate in their spending. Comparing the squad investments during the 2020/21 season to the average of the past three seasons (2017/18-2019/20), the transfer spending of Spanish LaLiga clubs decreased by 70%, the largest decline observed across the big 5 European leagues, while English Premier League clubs' transfer investments dropped by 20%.

Moreover, the top 10 European clubs by transfer spending invested EUR 1.25b into their squads in the 2020/21 season – representing a 46% reduction compared to the top 10 clubs by spending during the corresponding 2019/20 transfer periods. While Real Madrid were the club with the highest investment in the previous season, having paid a total of EUR 355.5m for new players such as Eden Hazard and Ferland Mendy, Chelsea top this season’s ranking with EUR 247.2m, with all their major transfers (including Kai Havertz, Timo Werner and Hakim Ziyech, among others) completed in the summer.

If we consider the types of transfers completed, we can observe another interesting finding. The total number of deals made in the big 5 European leagues in the 2020/21 season decreased compared to the previous season: from 1,302 to 1,037 deals completed (-20%). Significantly, the number of purchased players dropped by a considerable 35%, from 602 to 390. On the other hand, the total number of loan deals, academy and free agent transfers remained stable, with a slight decrease from 700 to 647 deals concluded (-8%). (Free agent contracts saw a decrease from 186 to 158, the number of loan deals dropped from 318 to 288, while the number of youth players who made the next step from the academy into the first team increased from 196 to 201).

As a result, within the total number of player transactions for the 2020/21 season, the proportion of player trades involving a transfer fee has decreased compared to previous seasons, as the following chart illustrates.

Not only did the volume of transferred players decrease and the type of transfers shift towards loans, academy players and free agents, but the market value of transferred players dropped as well. According to KPMG Football Benchmark’s Player Valuation Tool, the aggregated market value of the top 20 new arrivals in Europe’s big 5 leagues totaled just above EUR 1b this season, a decline of 21% from the previous season, where the top 20 transferred footballers boasted a total market value of EUR 1.4b in market value. This season’s most valuable transferred footballer was Timo Werner with a market value of EUR 79m, while in the previous season Antoine Griezmann's market value totaled EUR 114m when he moved from Atletico de Madrid to FC Barcelona, according to our tool.

As the football world is still at the mercy of the pandemic, we expect the above-mentioned trends to continue: clubs with strong academies are likely to continue developing top performers from their youth teams, while free agents, as well as loaned players will still be in high demand. However, assuming that the impacts of the pandemic will have long-term effects on the football industry, not all clubs will be affected in the same way. In this complex environment, especially clubs who can be considered “net sellers” – those that base their business model mainly on profits from player trading – might suffer more than others. It is also very likely that there will always be a small number of stand-alone stars, for which the elite clubs might nevertheless spare no expense.

In addition to the impacts of the pandemic on finances, English Premier League clubs are experiencing even more difficulties to complete major transfers than their EU counterparts. The combination of the coronavirus pandemic significantly curbing clubs' spending power and the UK’s status post-Brexit requires clubs to adjust their transfer strategy. With respect to new laws having been introduced on 1 January 2021 referring to the recent Brexit deadline, football authorities in England (Premier League, FA and EFL) have agreed to a plan of entry requirements with the UK government relating to overseas players. All players from EU countries as well as all other overseas players without the right to work in the UK will be required to gain a Governing Body Endorsement (GBE), which is based on a points system. Points will be awarded for senior and youth international caps, club appearances and the pedigree of the selling club. Moreover, clubs will not be able to sign overseas players until they are 18 years old and are obliged to sign only six “Under-21” players per season in forthcoming years. Manchester United’s new signing, Amad Diallo, who joined from Italian side Atalanta in January, is a recent example of such a new, U-21 addition.

Note: Figures shown throughout the article which refer to transfer fees are taken from