The Premier League is by far the richest in world football — but this January transfer window turned out very quiet.
The main reason is that the league’s profit and sustainability regulations (PSR), often referred to as financial fair play (FFP) because of the UEFA rules that preceded them, are increasingly showing their teeth. These rules restrict what clubs can spend by linking expenditure to revenue in an attempt to keep them on a more sustainable financial footing.
Everton and Nottingham Forest have now been referred to an independent commission over alleged breaches and both potentially face points deductions. Everton are already appealing against a 10-point deduction relating to the three-year financial reporting period ending in the 2021-22 season.
Manchester City were charged with 115 breaches of financial regulations in a far more complex and far-reaching situation, with the current Premier League champions strenuously denying all the allegations.
Several other clubs are sailing close to the wind financially, which means they have to be more creative in the transfer market. So while the winter window proved far less action-packed than in previous years, several new types of transfer have popped up.
Here are five types of previously unusual moves we are seeing more of — including a standout example to get us started…
The academy-level fire sale
Harry Kane at Tottenham. John Terry at Chelsea. Steven Gerrard at Liverpool.
There’s nothing quite like a boy from the academy becoming a key player for a club’s first team, embodying the dreams of young fans. But these fairytales are increasingly rare as homegrown players make up a smaller proportion of Premier League squads.
It now seems to be becoming even rarer because of the “pure profit” benefit, in the age of FFP, of selling academy players.
This quirk of football accounting is critical to understanding many recent transfers.
If a player has been bought by a club for £20million ($25.3m) and then is later sold for £40m, that shows up in the accounts as a profit of £20m. But academy players were signed as youngsters for nothing, so any fee they are sold for is profit banked in its entirety — referred to as “pure profit” in the jargon.
Football finance expert Kieran Maguire, who hosts The Price Of Football podcast, says academies were once simply about developing players with a view to them joining that club’s first team, but now these prospects are being “factory farmed” for financial reasons.
“What we have seen is the commodification of academy players,” Maguire says. “You only have to sell one Mason Mount every four or five years to pay for your academy.
“In the case of Chelsea, they have done fantastically well. Mason Mount, Callum Hudson-Odoi, Tammy Abraham, Billy Gilmour… all of these (former academy) players have generated huge sums in transfer fees.”
Since their takeover by the Todd Boehly-Clearlake Capital consortium late in the 2021-22 season, Chelsea have splurged huge sums in the transfer market and are pushing against the limits of FFP. This means there is pressure to sell players — particularly ones who came through their academy.
Conor Gallagher and Armando Broja have both been linked with transfers recently (neither moved permanently in January, with Broja going to Fulham on loan). Selling either of these two will again go down as pure profit, whereas moving on players that have been signed from other clubs will not.
Aston Villa, after finishing seventh in the 2022-23 Premier League thanks to a strong end to the season under head coach Unai Emery, needed to generate transfer revenue last summer to strengthen the first-team squad with an eye on a push for Champions League qualification this time.
But instead of selling one of their prime first-team assets, Villa instead sold a trio of academy graduates — Cameron Archer to Sheffield United, Aaron Ramsay to Burnley and Jaden Philogene to Hull City of the Championship. Alongside Keinan Davis, sold to Udinese in Italy, and Carney Chukwuemeka, who joined Chelsea the previous summer, Villa have raised almost £60million in “pure profit” in the past 18 months by selling a clutch of young players who had very few league appearances between them.
Although it may be sad to lose the bond between academy and first-team squads, it could be good for the wider state of English football if Premier League clubs are less incentivised to “stockpile” valuable youngsters and instead move them on to teams where they will play more regular football.
Buy now, pay later
You might see a transfer fee reported as £50million — but that does not mean a lump sum of £50m gets moved from the bank account of one club into another’s.
“We are very much in the era of structured payments,” says Maguire. “The headline is the ultimate agreed fee but in terms of cash flow, you are (usually) just putting down a deposit.”
Many clubs have a backlog of payments from prior deals to clear, which means they have less room for manoeuvre in the transfer market than you might think by just glancing at recent incoming. For example, Manchester United owe £364million in transfer fees for players they have already signed.
“It’s like using a credit card,” explains Maguire, who says the combined figure for what the Premier League’s 20 clubs owe on transfers is likely to hit £2billion when Chelsea publish their next set of accounts. “You can’t go and spend £100m in this window if you’ve already got to spend £60m on players you’ve already bought.”
This is related to, but not the same as, the accountancy concept of ‘amortisation’.
This means that if a player is signed for a £50million fee on a five-year contract, the payment to the selling club is ‘amortised’ as £10m per year.
The transfer fee is not necessarily paid on those precise terms — it could be the whole lot in full, half up front, or in any other combination — but we are increasingly living in a world of structured payments as clubs opt to buy now and pay later.
Loan with an option to buy
This is where a club agree to borrow a player from another club for a set amount of time, just like a normal loan deal, but they also agree to a price at which the signing club has the option to buy the player at the end of the loan.
“The option to buy is potentially beneficial for all parties,” Maguire says. “The player gets game time, the selling club gets a bit of payroll cost off their books, and potentially a loan fee, and you’ve got rid of somebody who could be disruptive.
“From the buying club’s point of view, it’s a ‘try before you buy’,” he says, explaining that it lowers the risk of an expensive signing not fitting in.
The Premier League’s financial rules are making these deals more common because they can help clubs who are close to their PSR limits push a hefty outgoing into the next year’s budget.
One recent example is Sofyan Amrabat, who Manchester United signed on loan from Fiorentina of Italy last summer. United paid an initial €10million (£8.5m/$10.8m at current exchange rates) as a loan fee and negotiated a €20m option to buy — with a further €5m in potential add-ons.
The deal not only allows United to see if they actually want to spend a larger permanent transfer fee on Amrabat having seen him play for them, it also helps them fit within the PSR rules by pushing the money it would require into next year’s accounts.
Another example is David Raya, who has become Arsenal’s first-choice goalkeeper this season after signing from Brentford last summer. He is only on loan at the moment, after Arsenal paid a fee of £3million — but they have the option of making the move permanent for a further £27m in the next summer window.
Loan with obligation to buy
Transfers can also be structured as an initial loan deal with the obligation for a transfer to take place for an agreed fee after the player’s temporary stay is over. There is no “try before you buy” here. This is a requirement rather than an option.
Maguire explains that these deals aren’t loans at all in any meaningful sense, and are essentially a piece of accounting trickery to help clubs work around financial regulations. If the club doesn’t have the balance-sheet wiggle room, or indeed the cash in hand, to sign a player for a fee right away, structuring a deal like this can get things off the ground.
For example, Lewis Hall signed for Newcastle from Chelsea on loan last summer with an obligation to buy for £28million, plus a potential £7m of add-ons. Both sides view it as a permanent transfer but Hall is technically still a Chelsea player and is listed as such on their website.
Newcastle, sailing close to the wind after spending lots of money on players following their takeover by Saudi Arabia’s Public Investment Fund in 2021, got to push that big expenditure into the future. This gives them more leeway in the here and now.
For Chelsea, it gives them scope in future transfer cycles, especially because, as an academy graduate, Hall’s transfer fee will count as “pure profit” in the calculations.
Eyebrows were raised in the summer when Allan Saint-Maximin moved from Newcastle to Saudi Pro League side Al Ahli in a deal worth in the region of £25million.
The Saudi Arabian state’s Public Investment Fund (PIF) bought 80 per cent of Newcastle in 2021, and last year PIF took a 75 per cent stake in four of Saudi Arabia’s top football clubs — including Al Ahli.
“If you think of a normal negotiation, like buying a house, one person is trying to pay as much as possible and one as little as possible,” says Maguire.
But “that natural negotiating conflict” no longer applies when both clubs are owned by the same entity. In this case, Newcastle stand to benefit from the fee being higher, for FFP reasons. But Al Ahli are also not hugely incentivised to drive the price down. Ultimately, the two clubs have the same owners.
Players regularly move between teams in the City Football Group stable, such as Manchester City and Girona in Spain, who are both under UEFA’s umbrella, unlike Saudi clubs. Many other Premier League teams have similar models.
The Premier League accepted that the Saint-Maximin transfer was at “fair market value” and that nothing untoward took place. Indeed, in that particular case, the price seems reasonable, given the player’s experience and credentials. But it raised some awkward questions, which will only increase as multi-club groups proliferate.
The issue was raised as far back as 2013 when Watford, in England’s second tier at the time, signed lots of players on loan from Udinese in Italy and Granada in Spain — with all three clubs owned, at the time, by the Pozzo family.
“It seems pretty ludicrous to me,” said then Crystal Palace manager Ian Holloway, whose team played a Watford side stuffed with loan signings shortly before the rules were changed.
Ones for the future
Until a few days ago, there had been one major signing for an immediate first-team player in the winter window — defender Radu Dragusin, who moved to Tottenham from Italian side Genoa for £25million.
Spurs have more room to spend than most after selling Kane to German champions Bayern Munich for £100million in the summer. Kane may be England’s captain and record goalscorer today, but he came through their academy so that money is “pure profit”. Tottenham also have huge stadium revenues and have lowered their wage bill by loaning out Japhet Tanganga, Ivan Perisic, Eric Dier and Djed Spence, and releasing veteran goalkeeper and former captain Hugo Lloris.
While the Dragusin deal stands largely alone, there have been several other transfers involving substantial fees which will not see the player concerned go straight into the signing club’s first team.
Manchester City bought teenage attacking midfielder Claudio Echeverri from River Plate for £12.5million plus add-ons. However, he will remain on loan at the Argentinian club until next January. This is similar to the transfer of his countryman Julian Alvarez, who also stayed on loan for six months after joining City from the same Buenos Aires side in 2022 and is now a Premier League regular for Pep Guardiola’s treble winners.
Villa signed teenage defender Kosta Nedeljkovic, who played in the Champions League earlier this season for Red Star Belgrade, in a deal worth around £8million. He has also been loaned straight back to the Serbian club.
These loans allow a player to keep developing for a few more months rather than asking them to make a dramatic mid-season lifestyle adjustment at a young age. They would also realistically play few minutes for their new team having arrived halfway through the season.
Brighton & Hove Albion, who are proving themselves masters at shopping in untapped foreign markets, have bought 19-year-old Argentinian Valentin Barco from another Buenos Aires club, Boca Juniors, for $10million (£7.86m). He has not been loaned back to Boca but is seen as one for the future.
Brighton are an appealing club for bright prospects looking to make their first move into European football because of their excellent record of providing a quick track to the first team for youngsters, especially ones from South America.
Hoovering up talent from around the globe at a young age makes increasing sense in an age of FFP, explains Maguire. Brighton have proved that these sorts of players can come into their first team relatively quickly and potentially be sold on at a huge profit.
This does not always happen, but these deals are seen as having a small downside and a big upside.
“For every Moises Caicedo, for every Julio Enciso, there’s two or three that you never hear of because they didn’t make the grade,” explains Maguire.
But it only takes one Caicedo, who helped Brighton qualify for Europe for the first time in their history before he was sold to Chelsea last summer for £100million, every now and again to make this transfer strategy worth it.
Brentford, who like Brighton are known for their savvy scouting, are another club who made a signing for the future in this winter window, buying teenage midfielder Yunus Emre Konak from Sivasspor in Turkey.
(Top photos: Getty Images)
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