Soccer / salary

satriotomo
Inflation in Football
In 2000, Luis Figo became the most expensive footballer in the world when he joined Real Madrid from Barcelona for 37 million euros. Figo was cursed for years for the move by Barcelona fans. Then in 2017, Neymar shocked the world with his transfer to PSG from Barcelona for 222 million euros. That's six times of Figo transfer in 2000. Can we say that Neymar is six times better than Figo? Of course not, it'd be a blasphemy to say that. We can't even say with 100 percent sure that Neymar is better than Figo. So, what justifies the numbers? Not only the transfer fee, we also witness that the salary of footballers has been increasing each year. 100,000 euros per week is a moderate number right now. What are the factors that keep pushing prices in the football industry? Price always reflects two things: the value of money and the value of goods & services. So, if prices in football increasing while the value of players relatively the same, we can say that it's the value of the money that decreasing. Why? Because there is too much money in the industry right now. For example, Premier League clubs get more than 1 billion euros each year from selling broadcasting rights. That huge income changes the way they spend their money. With more money, football clubs are able to buy players at a more expensive price and are able to give high salary to their players. When Premier League started in 1992, a transfer fee of 1 million pound sterling was news, that's around 2 million pound sterling in today's money. But now, a transfer fee of 20-30 million pound sterling is very common. With football's growing popularity, money from broadcasting rights will keep increasing, and I believe in the near future we will see players that even more expensive than Neymar. It's not about the quality of the player, it's simply about the inflation in the industry. Some say that the bubble will eventually burst when money from TV drops, but I don't see that coming in the near future. But of course, clubs should start to diversify their income and don't be too dependent to one revenue stream.
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