Are the inflated transfer fees just a flash in the pan?
When Neymar signed a 5-year contract extension with FC Barcelona in 2016, they bumped up the release clause to an almost unattainable €222 million, assuming that this clause would never be triggered during Neymar’s extended contract.
How little they knew back then! Last month, Paris Saint-Germain met Neymar's release clause and Barcelona were left stunned. It's unbelievable how a release clause of €222 million was nonchalantly met when the previous record transfer was close to a comparatively mere €100 million.
If you thought that was just an outlier, wait! There's more. Kylian Mbappe is currently on loan with PSG, and will make a permanent switch next year, in a deal worth €180 million!
Where is Financial Fair Play (FFP)?
Yes, they have started investigating deals to check for violations, but what a mockery! FFP was supposed to be the caretaker of the sport from a financial standpoint, to ensure that money doesn't consume the game.
Alas, they failed miserably. There are a few teams in Europe that have infinite money in their coffers waiting to be spent and are willing to go the extra mile and million to land their prized assets.
UEFA's Club Financial Control Body is bound to investigate the matter, and the maximum possible punishment that can be imposed, as per their rule book, is banning the team from current and future competitions.
Are we saying that a team with infinite money, worldwide fan-base, obvious soft power, best players, and is notably the highest income generator for UEFA will be banned by UEFA?
Of course not. Which leaves us with the punishment of a reduction in registered players for a tournament, or barely a fine of some millions, both of which can't be regarded as punishments for cash-rich clubs.
We should know by now, that FFP is not the answer.
Also read: UEFA opens FFP investigation into PSG
How will the clubs react?
PSG's purchase of Neymar proved that they are now among the best clubs in Europe in terms of soft power. There are few other clubs that can attempt to do what PSG did -- the two Manchester clubs, Chelsea, Real Madrid and Barcelona.
But what does this mean for the other clubs? Firstly, they will have to play catch-up. Arsenal allegedly bid over €100 million for Kylian Mbappe and £92 million for Lemar. Although both deals went down the drain, it showed Arsenal's willingness to deviate from the socialist standards they have defined for themselves.
Liverpool broke their transfer record to buy Mohamed Salah, while Barcelona bought Ousmane Dembele for over €100 million and relentlessly pursued Philippe Coutinho, in what turned out to be a failed deal worth more than €160 million.
Ironically, that's called playing catch-up to Neymar's €222 million price tag. However, this can be called a knee-jerk reaction and cannot continue forever.
Is this model sustainable?
Yes, temporarily and no in the long run. Yes, because if a team buys a player from another team for an inflated price, the selling team in this transaction will receive a significant amount to spend on a replacement.
They will then buy a replacement for an inflated amount from another selling club. This cycle will continue till one of the selling clubs choose to either sit on the newfound cash, or the replacement they buy will cost a shrewd cut-price deal.
Until all the subsequent replacements are part of inflated deals, this model remains sustainable.
It is, however, obvious that this trend cannot extend beyond the few wealthy clubs. Case in point is PSG's deal with Monaco for Mbappe worth €180 million and Monaco's deal for his replacement in Diakhaby worth close to €10 million.
When the transfer window ended, Monaco made a profit of roughly €289 million, which could have further increased to €381 million if Lemar had joined Arsenal!
So, my stand is, No, this model is not sustainable in the long run.
How can this model change?
There are three ways this model can change.
One is by a like-for-like exchange, where sums of a few million and players are exchanged to seal the deal. More like a barter system.
Or two, when the clubs wait for the contract term of their target to finish before snapping him up.
Arsene Wenger makes a valid point when he says players seeing out their contract will become the norm. It works for all parties concerned; a top player can get the best deal, his new club need not shell millions on him as transfer fees and his old club can opt for a cut-price deal for a replacement or snap a similar player for free.
Or three, by introducing salary caps at the team level like in American football. But I strongly suspect this can happen in soccer, given the wide disparity in soccer wages and the maturity of the financial model around the sport. Surely, clubs will look to adopt one of the first two ways to attain sporting and financial success and to remain relevant and sustainable.
If you are a fan of inflated transfer fees, enjoy it while it lasts. If you are not, wait for a few seasons and it will die a slow death, unless the whole sporting dynamic changes!