Money talks in football, but all incumbents are displaced eventually

The Premier League season opens on Friday against a background of stratospheric transfer deals, with Paris Saint Germain capturing the Barcelona striker Neymar for a world record €222m.

With the exception of Cristiano Ronaldo’s transfer from Manchester United to Real Madrid in 2009, all the top 10 most expensive player deals ever have taken place in the past four years.

No fewer than 33 of the top 100 of all time have happened in 2016 and 2017. Only one of the top 100 dates from the twentieth century: the €49.5m transfer of Christian Vieri from Lazio to Inter Milan, in 1999.

The stupendous flow of money into the game at the top level has created a self-reinforcing system. The rich clubs get richer. They can afford to buy the best players, which means they are even stronger on the field. And as a result, they attract even more money.

Yet this very process makes the competition more boring for spectators, in the sense that the outcomes at the end of the season become more predictable.

Arsenal have finished in the top five for each of the past 20 seasons. Manchester United have been in the top five – indeed the top three – in no fewer than 18 of these. Chelsea have occupied one of the top three places in 12 out the previous 14 seasons.

Manchester City were taken over by the Abu Dhabi United Group at the start of 2008/09, and in subsequent seasons have always been in the top five.

La Liga, the Spanish equivalent, has become dominated by just two clubs, Barcelona and Real Madrid. We have to go back to 2001/02 for a season in which one of them was not in the top two. In the past decade, they have won the league nine times between then, and also finished second nine times.

Money talks in sport. Celtic swept aside all opposition in the humbler setting of Scottish football last season, being unbeaten in all competitions. Their wage bill exceeded the total spent by the next six teams in the league combined.

But to put it into perspective, Celtic only paid out 80 per cent of the salaries at Burnley, which was easily the lowest spending team in last year’s Premier League.

Little wonder that Scottish teams struggle in European club football. Last season’s second and third, Aberdeen and Rangers, have already been eliminated in the 2017/18 preliminary rounds of the less glamorous competitions by teams from Cyprus and Luxembourg.

These massive inequalities seem to be characteristic of popular culture in the twenty-first century. Think of the current dominance in their respective spheres of Google, Facebook andAmazon.

We know that evolutionary forces are still at work in all of these markets. Myspace was the largest social networking site in the world until 2008, when it was overtaken, and then totally eclipsed, by Facebook.

It is always hard to imagine how the top incumbents can ever be displaced from their dominant position, but they inevitably are – eventually. Maybe Burnley and Bournemouth will be the teams of the 2030s.

Paul Ormerod 

As published in City AM Wednesday 9th August 2017

Image: Neymar by Alex Gau is licensed under CC by 2.0

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Alex O’Byrne, Associate at Volterra, is an experienced economic consultant specialising in economic, health and social impact, economic strategy, project appraisal and socio-economic planning matters.

Alex has led the socio-economic and health assessments of some of the most high profile developments across the UK, including Battersea Power Station, Olympia London, London Resort, MSG Sphere and Westfield. He has significant experience inputting to EIAs and s106 discussions as well as drafting economic statements, employment and skills strategies and affordable workspace strategies.

Alex is also experienced at economic appraisal for infrastructure. He was project manager of the economic appraisal for the City Centre to Mangere Light Rail in Auckland. He also led the economic and financial appraisals of the third tranche of the Transport Access Program for Transport for New South Wales, in which Alex developed and employed innovative methodological approaches to better capture benefits for individuals with reduced mobility.

He is interested in the limitations of current appraisal methodologies and ways of improving economic and health analysis to ensure it is accessible to as many people as possible. To this end, Alex recognises the importance of transparent and simple to understand analysis and ensuring all work is supported by a robust narrative.

Alex holds a BSc (Hons) in Economics from the University of Manchester and he was a member of the first cohort of the Mayor’s Infrastructure Young Professionals Panel.


Senior Partner

t: +44 020 8878 6333

Ellie is a partner at Volterra, specialising in the economic impact of developments and proposals, and manages many of the company’s projects on economic impact, regeneration, transport and development.

With thirteen years experience at Volterra delivering high quality projects to clients across the public and private sector, Ellie has expertise in developing methods of estimating economic impact where complex issues exist with regards to deadweight, displacement and additionality.

Ellie has significant experience in estimating the economic impact across all types of property development including residential, leisure, office and mixed use schemes.

Project management of recent high profile schemes include the luxury hotel London Peninsula, Battersea Power Station and the Nova scheme at London Victoria. Ellie has also led studies across the country estimating the economic and regeneration impact of proposed transport investments, including studies on HS2 and Crossrail.

Ellie holds a degree in Mathematics and Economics from the University of Cambridge.