So I just read that the Premier League has set a new record, spending over a billion euro in transfers. How does everyone see this? As a investment? Perhaps X amount of money spent on X amount of players = X amount of higher interest in the team = X amount of more tickets/shirts etc sold = X amount of higher profit? Or just waste of money?
To be honest while I do understand supply and demand, I don't really get the high transfer costs, that just grow with each season.
Nobody except central banks can survive with wasting of money, so it is profitable investment from their approach and for some time it will be (tv rights prices grow at high pace as well, price of tickets go up as well etc, bilions of people want to watch just the top teams and top players etc... so there is still space).
The another view is to look at it from the point of view of society or humanity, but that is not the point of view of the market, so it is pretty much irrelevant. I personally made all my money through sports (betting, affiliate...), but I never understood why people watch sports or bet on it. When I was young I used to be a sport fan and casual losing bettor, but it is like past life that I do not recall. So I do not know why sport stars are so valued by people, that their price is in billions, but some fact have to be rather accepted and not explained I think.
People are generally very nonindidivual creatures that create hypes and bubbles, because their desires are copied from other people and spread like viruses (for example a desire to see the best soccer player). So this is why occur events like steep grow of prices of sport players, houses or bitcoins.
1/ A billion Euros sounds a lot but divided by 20 team and it's only 50 million euro each.Quote:
Originally Posted by xecutable
2/ Compare that to the revenue of the teams TV rights, tickets, merchandise, shirt sponsors etc, (100m to 400m per season) and then it also seems a small percentage when you consider players and team strength are the most important factor in a football team.
3/ Some of the numbers are inflated by double action. eg. Team A sells a player for 50m - and then buys two replacements for 40m. It looks like 90m of action but the net spend is actually +10m received.
As the money in the game increases - so do all things around it. The size of stadiums, the amount of merchandise, the player wages and transfer fees. Is it sustainable? Only as long as there is paying interest. But with so much TV media and print media there is a frenzy for content and sports makes good content.
I am sure spending on transfers is not even an issue in Premier League clubs.
They will not invest if they will not get more than what they spent.
In this type of business I'm sure they are pretty well on how to think ahead of the probabilities. :)
This is the key point for me. I think unless the team is backed by a loony billionaire who's pumping money into the club most teams are going to at least try and balance their in/out costs.Quote:
Originally Posted by TheGooner
Chelsea are a great example of this - they spent £85.3m on players and raised £85.2m through sales (source). So that's a net cost of £100k.
Oh I see. I totally neglected the "players sold". Half of that money is made up by the Top 4 teams to be honest. What happens if you initially have no players to sell?