The post-pandemic recovery of the transfer market

As we approach the tail end of 2024, this year's transfer windows can be observed with more clarity. Although the match calendar was very busy with a host of international tournaments taking place, the latest summer transfer window was less frantic as overall club spending decreased from 2023. However, the English Premier League’s dominant position of the transfer market remained. In terms of total spending, they were followed by the rest of the European “Big Five” leagues (i.e. the top tiers of France, Germany, Italy and Spain), which is another recurring pattern of previous years.

In this article, we analyse both sides of the transfer market — buyers and sellers — exploring how high-spending and talent-developing clubs each play distinct yet interdependent roles. We also highlight a shift in strategies, providing insight into how clubs on both sides of the market may be adapting to recent transfer trends.

Key findings

• Post-pandemic recovery: The 2024/25 season is expected to mark the first decrease in aggregate transfer expenditure in the post-pandemic era. However, the total spending of 2024/25 is still 70% higher than the seasons that were most affected by the pandemic.
• Concentration of spending power: In the English Premier League, a few top clubs control most of the transfer spending. Other “Big Five” leagues see an even sharper disparity, with spending heavily concentrated among a handful of traditional top clubs.
• Transfers as a fundamental source of income: With recruitment increasingly focused on younger talent, several teams outside the “Big Five” have positioned themselves as talent developers, leveraging the strong demand from elite clubs.
• Investing in star players: Most high-profile signings could not maintain a high market value over time, either due to their sub-par performances, injuries or other factors.

Methodology of the analysis

The article is based on data collection and analysis carried out by Football Benchmark, focusing on the summer and winter transfer windows of the past seven full football seasons from 2018/19 to 2024/25 season. It is worth noting that the expenditure component for the 2024/25 winter transfer window (which is still ahead of us at the time of writing) was estimated by Football Benchmark in order to make 2024/25 comparable with past seasons of the sample. The estimated figure for the winter window was EUR 1.1 billion. The objective was to present an accurate depiction of the European transfer market as a whole over several years.

The scope of the analysis included all first-division domestic football leagues within the UEFA confederation, along with the English second division (EFL Championship). Only transfers that involved a transfer fee were considered for the analysis. Loan deals, free transfers and deals for which the fee was not disclosed were excluded.?

Reverting back to the norm

The 2024/25 season is expected to mark the first decrease in aggregate transfer expenditure in the post-pandemic era. Specifically, the total transfer market expenditure for all selected leagues is projected at EUR 7.52 billion, which is 9% below compared last season's EUR 8.17 billion.

A perhaps more cautious approach from last season's dominant forces of England (Premier League's?summer spending decreased by EUR 450 million) and Saudi Arabia has influenced the easing of this season's transfer activity. With the Profitability and Sustainability Rules (PSR) limiting the losses clubs can occur over a given period and the more stringent UEFA’s Financial Sustainability Regulations, English teams have adopted a more sustainable approach. At the same time, total outlay of top Saudi clubs was also smaller (- EUR 470 million in comparison to the 2023/24 season), which decreased funds available to European clubs to spend themselves.

Taking a longer-term view, it is clear that the adverse impact of the pandemic on the purchasing power of clubs in Europe is gradually diminishing. While somewhat smaller than 2023/24’s figure, the total spending of 2024/25 is still 70% higher than the seasons that were most affected by the COVID-19 pandemic (2020/21 & 2021/22). This recovery is further indicated by a recent rise in the average deal value, which is set to exceed EUR 5 million in 2024/25.

Concentration of spending power among a select few

A notable concentration of spending power has characterised recent transfer activity as a select cluster of clubs within each of the “Big Five” leagues dominated spending. In the English Premier League (EPL), a few top clubs control most of the transfer spending, though recently more and more teams started to catch up (e.g.: Newcastle United FC, Aston Villa FC). In contrast, other “Big Five” leagues see an even sharper disparity, with spending heavily concentrated among a handful of traditional top clubs.

Considering the period between 2018/19 and the 2024/25 summer transfer window, in the EPL, just two clubs, Chelsea FC and Manchester United FC accounted for 21% of the league’s combined transfer expenditure. In the most extreme cases in Ligue 1 and LaLiga, the top two clubs were responsible for 38% and 35% of the entire league’s expenditure, respectively.

On a broader scale, the English top tier’s financial strength stands out compared to the other “Big Five” leagues, reinforcing its position as the primary driver of market activity.

This concentration extends further to the overall European landscape. More precisely, the top 20 biggest spenders since the 2018/19 season accounted for 40% of the combined expenditure of all European clubs included in the analysis (approximately 700 clubs).

When we consider the 40 biggest spenders, this percentage jumps significantly to nearly 70%, while the top 100 spenders represented almost 90% of the market’s total expenditure. This finding reveals that a relatively small group of clubs drive the European transfer market and that the rest are unable to compete on this front.

The role of “net sellers”

Selling clubs are more dispersed across Europe with revenue from transfer fees redistributed throughout the football pyramid. Transfers act as a fundamental source of income for those lower down, in the less affluent parts of the "ecosystem"; they often have to sell their best players just to keep their books in balance.

With recruitment increasingly focused on younger talent, several teams outside the “Big Five” have positioned themselves as talent developers, leveraging the strong demand from elite clubs.

The three clubs relying on player trading the most are all from Portugal – Vitória SC, Braga and Sporting. This reliance is measured via the ratio of cumulative net profit on the disposal of players' registrations on operating revenue between 2018/19 and 2022/23.

Essentially, this is how much profit a club could record in their books from the sale of players, divided by their total income from operations (matchday, broadcasting and commercial). A high ratio indicates a strong reliance; in fact, both Vitória SC and Braga made more from player sales than their “general” operations, which is difficult to sustain.

Interestingly, while “Big Five” leagues are represented by 10 clubs in the list, they all hail from Ligue 1 and Serie A. The only English club making the list is Bristol City FC who spent the analysed period in the second division.

Investing in star players – What could go wrong?

Taking a closer look at the dominant few shaping transfer market activity, it is clear that a small number of clubs drive the most lucrative transfer deals. These high-profile transfers, often involving star players and commanding the largest fees, consistently capture the spotlight and define headlines. Yet, many times these deals have not been undisputed success stories on or off the pitch.

From a financial sense, we see that two thirds of the players who were signed for at least EUR 75 million since the 2018/19 season, had a lower post-transfer market value than the transfer fee that was paid for them. Looking at the evolution of their market values (as estimated by Football Benchmark) one and two years after the transfer further confirms this phenomenon: most high-profile signings could not maintain a high market value over time, either due to their sub-par performances, injuries or other factors.

A declining market value can harm clubs’ finances. While players’ estimated market value does not appear directly in clubs’ financial statements, it significantly influences their price for potential future transfers. A?subsequent sale at an amount below net book value can negatively affect the clubs’ profitability.

Eden Hazard and Harry Maguire are prominent examples of value deterioration and value-fee difference after transfer among the top transfers since 2018/19. In particular, Hazard’s dream move to Los Blancos ended with less than 100 appearances and a premature retirement. Signed as a 28-year-old Ballon d’Or candidate for a fee of EUR 115 million, Hazard experienced a sharp decline in his estimated market value, dropping to just EUR 36 million by the age of 30.

Harry Maguire’s decline in value was due to a combination of individual and team underperformance. Just two years after his EUR 87 million move to Old Trafford, his market value was already 30% lower than that amount.

Evolving trends and future expectations

With European clubs recovering from the impact of the pandemic and more stringent financial regulations across Europe affecting the spending power of bigger clubs, football clubs have been managing their resources with more caution. As a result, many have altered their recruitment strategies with players being viewed as strategic, long-term assets. Increased focus on the acquisition of young players is a case in point: the 2024/25 summer transfer window saw a record 13% of transfer investment directed at players aged 19 or below, according to UEFA’s “The European Club Talent and Competition Landscape ” report. Prior to this, no summer transfer window had seen more than 10% of transfer fees invested in young talents of this age. As recruitment strategies evolve, lucrative deals persist but with a more strategic focus. Value deterioration for heavy investments is incompatible with football’s financial sustainability, pushing clubs to prioritize younger players, as seen in recent trends.

In today’s financial climate, many top European clubs are not willing to spend big on star players in their prime, but free transfers such as Kylian Mbappé’s move to Real Madrid provide an alternative solution. A star player who possesses a high market value often limits the range suitors due to their clubs’ steep asking prices. By running down their contracts, these players can secure lucrative signing-on bonuses and higher wages, while allowing clubs to avoid paying hefty transfer fees. This makes free transfers an attractive option for both parties. Of course, this avenue is generally only open to the biggest clubs that can attract stars of this calibre.

Finally, it must be mentioned that Lassana Diarra’s headline case has the potential to reshape transfer activity in the (near) future, particularly the movement of players. If the ruling sets a precedent, expensive transfers could increasingly give way to free transfer deals.

The future of the transfer market remains uncertain, particularly with potential regulatory changes stemming from the Diarra case. However, recent transfer market activities reveal clear trends. These trends point to a post-pandemic recovery while underscoring the interconnected dynamics between top spenders and net sellers. On one hand, purchasing power is concentrated among a few top spenders, primarily from the “Big Five” leagues. In the case of extremely expensive transfers, these clubs bear the risk of declining market values. On the other, net sellers benefit significantly from player trading profits, heavily relying on this income stream to sustain their operations.