Euro crash could benefit British transfers
British clubs are set to reap financial benefits from football transfers in the summer as the euro continues to become weaker against the pound in the currency markets.
In short, this means that player transfers this summer involving British clubs will be better value for money for those clubs, and will involve a larger pay-out for European clubs seeking to lure players from the Premier League.
It’s a welcome role reversal for British clubs compared to recent years when European clubs were gaining the rewards from the euro being stronger against the pound. The euro has been in decline against the pound for three years now. In 2007, the highest value of the euro stood at €1.51 to the pound. With this high value, the European clubs would benefit. They would have a set fee on a player, in euros, and the British clubs would have to pay that value according to the exchange rate in operation at the time.
In January 2008, the euro fell to €1.34 to the pound. At the end of 2008, it fell further to €1.09. Currently, it stands at €1.16 to the pound. This is significant, as British clubs will now be getting greater value for their money – based on the value of sterling - when buying and selling players.
Cristiano Ronaldo’s transfer to Real Madrid from Manchester United last summer cost the Galacticos €93million (£80million). If the transfer had taken place in 2007, with the euro in much stronger shape, United would only have received £62million. The difference in exchange rates between those two years would have seen United lose out on £18million.
Real Madrid also paid €34.8million for Xabi Alonso in the same period, with Liverpool receiving £30million. If this transfer had taken place in the summer of 2008, Liverpool would only have received around £27million.
Liverpool purchased Alberto Aquilani from AS Roma for £20million (€22million) in the 2009 summer. Had the transfer occurred when the euro was at €1.51 to the pound in 2007, AS Roma would have received a staggering €30million.
Chelsea’s signing of Jose Bosingwa from FC Porto in 2008 cost the club £16million, with the Portuguese club receiving €21million. If the transfer had taken place now, FC Porto would receive €18.5million, a loss of €2.5million in no less than two years.
Luka Modric’s move to Tottenham Hotspur from Dinamo Zagreb in the summer of 2008 cost them €22million (£16.6million). Like FC Porto, Zagreb would have made a loss if Modric moved now for £16.6million as Tottenham would only have to pay €19million.
Chelsea paid Olympique Lyonnais €20million (£13.5million) for Florent Malouda in 2007. Now, £13.5million would only equate to €15.7million. Chelsea would have lost out, and Lyon would have got their value for money. In that same year, Manchester United paid £17million and £14million for Anderson and Nani to FC Porto and Sporting Lisbon respectively. FC Porto got €25.5million, with Lisbon getting €21million. In 2010, Manchester United would benefit, as it would only have cost them €19.7million and €16.2million.
Fernando Torres’ transfer from Atlético Madrid to Liverpool in July 2007 cost the club €39million (£26.5million). If Liverpool paid £26.5million for Torres now, Atlético would only have received €31million. The advantage is firmly switching towards the British clubs.
If, as economists have suggested, the euro has yet to reach a bottom mark, European clubs face a problem when the summer’s transfer window picks up after the World Cup. Barcelona may find this out in their hot pursuit of Arsenal skipper Cesc Fábregas.
Aside from a potential loss of revenue in dealings with British clubs they may also find themselves losing out to Premier League teams when it comes to fighting over the pick of the available talent.
Sure, a player wants the Champions League and something for his trophy cabinet but he is also going to be looking at his bank balance, which will be enhanced by a strong currency in whichever country he plies his trade.
Football may be the world game, but money makes the world go round.
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