Economy Bubble in European Football

In 2009 Real Madrid signed the portuguese player Cristiano Ronaldo from Manchester United for 96 millions of euros. The Spanish team broke the market with this record movement that lots of sports journalists qualified it as “risky” and “exaggerated”. Not many people could predict that 10 years later, this type of contracts would be considered as something common in the football world.

The people who aren’t football fans and are not aware of the quantity of money that this business is moving year after year, tend to surprise themselves when they found out this type of transactions in the news and tend to criticise them afterwards.  And I don’t blame them, it’s incredible how signing a single player for an amount of 100 M euros can be considered as something normal. But the reality is that this movements are done because they are profitable.

The TV companies rights, the prices for participating in competitions like the Champion League and the benefits that football icons create through marketing contracts, make possible this actual system.

The inflow of money form certain states in some clubs like Paris Saint Germain or Manchester City has dynamited the market even more as this teams have a great economical power do to the support of different petrolstates like Qatar or Abu Dhabi.

Paris Saint Germain signed the highest contract in history by buying Neymar Jr. from FC Barcelona for 222 M euros in the year 2017. A completely crazy movement that provoked that most of the clubs have to change their strategy and try to sign younger players with lower termination clauses. But the demand for this young players is so high nowadays that the prices for them are incredibly high as well.

We have several examples of this situation. Clubs like Real Madrid signed Vinicius Jr (18) and Rodrygo (17) for 45 and 50 M euros each. FC Barcelona bought the french player Dembele with just 19 years old for 105 M euros and Atlético de Madrid just signed the new portuguese promes, Joao Félix, for 127 M euros.

This might seem as the football market have become crazy, and in some way it does. But if these type of investments keep being profitable, the bubble can keep growing.

As every other type of business (because yes, football is a business) their development would depend on their benefit.

But the question is, how much would the bubble grow without exploiting?