This archive report was first published on 16 June 2020.
On July 29, 2015, Manchester United goalkeeper David de Gea was set to join Real Madrid in a highly anticipated transfer. However, the deal fell through due to a last-minute paperwork issue.
Fast forward to 2020, and the COVID-19 pandemic has brought the soccer world to a standstill. The suspension of leagues across Europe has led to a significant drop in player value, with KPMG's global head of sports, Andrea Sartori, warning of an 18% decrease in the transfer market.
According to a KPMG study, the top 10 leagues in Europe will see a decrease in player value of 6.6 billion euros, or about 18%. This is a significant drop, especially considering that the majority of leagues have resumed or are in the process of restarting their seasons behind closed doors.
“In the top 10 leagues... the decrease in player value is 6.6 billion euros or a fall of about 18%,” Sartori said on the Reuters Global Markets Forum.
Players with high values in Europe, such as Kylian Mbappe, Mohamed Salah, Eden Hazard, and Neymar, will see a value decline of 13% if the leagues continue. Terminating all the leagues prematurely, as France's Ligue 1 has done, would have resulted in an overall decrease of 10 billion euros in player market value, Sartori added.
Despite the pandemic, Sartori does not expect the length of new player contracts to be affected. However, salary negotiations in the next renewal cycle will be impacted, and free agents may not necessarily be more in demand.
“I see many more player exchanges: less monetary transactions, more loans, exchanges, and not necessarily a high number of free agents,” Sartori said.
Club finances have taken a major hit without matchday revenue for three months, and Sartori believes that Financial Fair Play (FFP) rules may have to be eased to allow clubs to get back on their feet.
Under UEFA regulations, any club spending more than the revenue they generate may face sanctions, including bans from competitions run by the European governing body.
“The key rule that could cause major pressure is the break-even rule - the pillar of FFP,” Sartori said. “(It is) the most important regulation of FFP, how clubs have to behave.
There will probably have to be an element of relaxation to the break-even rule as clubs need to face the fall in revenue due to the virus, while costs have not fallen at the same pace.
