Gabriele Marcotti, Senior Writer, ESPN FCJan 15, 2025, 08:00 AM ET
Deflation is the opposite of inflation; prices go down, not up, over time.
And most economists will tell you that while excessive inflation is bad, deflation is generally really, really bad. If people think something is going to cost less next month than it does right now, they'll delay buying it. That slows down economic activity and production, the government collects less in taxes, folks get laid off because there's less spending, and everyone is worse off.
OK, that's in the real world. What about in the fantasy sports entertainment world we call football?
Nobody likes to talk about it because the outlook can be bleak. At best, when clubs have to cut back, they whine about needing to meet Profit and Sustainability Rules ... as if they weren't the ones who had chosen to implement PSR in the first place.
But an analysis of what happened to the world's richest league, the Premier League, in the last transfer window, when net spend went down by 40% and reached its lowest inflation-adjusted level of any non-COVID summer since 2014, as well as conversations with club officials, owners and intermediaries, paints a fairly stark picture.
Now, this isn't something you're necessarily going to measure in the current January transfer window, as winter transfers tend to have a "domino effect" anyway. Club A acquires Player X from Club B, who then spend part of the fee to replace him with Player Y from Club C, and so on. And there are some evident outliers like Manchester City, who could yet spend big since their ownership don't seem to have an evident profit motive and since their hefty profits the last couple of seasons mean they could, according to football finance blogger Swiss Ramble, lose as much as £369 million ($450m) this year and still be compliant with PSR.
However, you could also see it in other ways. Take midfielder Adrien Rabiot, who became a free agent last summer. He just turned 29 years old, he's a 50-cap France international (starting all three group games at Euro 2024), and he has big-club experience at Paris Saint-Germain and Juventus: you would have thought he'd generate plenty of interest as a free transfer. Nope. The summer window came and went, and he only ended up finding a club (Marseille) in mid-September. And even that was for a measly two-year deal that pays him less than half what he was earning at Juventus.
Or how about Victor Osimhen? Napoli wanted a fee of more than €100m for the then-25-year-old Nigeria striker (48 goals in 71 appearances the previous two seasons), eventually dropped the ask to €80m, then €60m, and still found no takers. He ended up moving to Galatasaray in Turkey, on loan, in September.
It's evident in other ways too. Consider the league leaders in the Bundesliga (Bayern Munich) and the Premier League (Liverpool). Among Bayern's free agents-to-be at the end of the season are Joshua Kimmich and Alphonso Davies, who are first and fourth respectively in league minutes played this season. Kimmich is 29, captain material and one of the best central midfielders around. Davies is 24 and one of the best left-sided players. Both have been a huge part of the club's success in recent years.
(Heck, while we're at it, throw in attacking midfielder Jamal Musiala. His deal isn't up until 2026, but he's 21 and arguably the best player at the club. Not that long ago, it would have been unthinkable to allow someone like that to enter the final 18 months of their contract.)
As for Liverpool, the situation involving forward Mohamed Salah (32 and the Premier League's top scorer), centre-back Virgil van Dijk (33 and club captain) and right-back Trent Alexander-Arnold (26 and Liverpool-born and bred) is well chronicled. Talks are "ongoing," everyone is "relaxed" (that word you always see in stories like this) and it's not affecting performance, yet nobody can remember the last time, amid such a successful campaign, that two massive, well-run, solvent clubs like Bayern and Liverpool left it so late to extend the contracts of key players.
Everyone is keeping their cards close to the chest, but you can only surmise that the reason it is taking this long is that the extensions are far from straightforward. The players and their agents have a certain idea of what their services are worth, while the clubs are dealing with a new economic reality.
Real Madrid insist they won't be hitting the market this January despite the fact that injuries have left them with a 33-year-old winger (Lucas Vázquez) playing right-back and a 6-foot-1 central midfielder playing centre-back (Aurélien Tchouaméni). Manchester United are trying to dump salaries (not just that of out-of-favour forward Marcus Rashford), and Manchester City are trying to move on club captain Kyle Walker, just four months after giving him an extension through 2026.
According to Transfermarkt, there have been 16 transfers of over €100m in history. Look at the list more closely and you'll see that more than half of them turned out to be busts or, at least, not moves clubs would do again if they could go back.
There was a time when you could roll the dice on a pricey transfer, knowing that even if you got it wrong and had to shift the player for a loss you'd still find a taker and could swallow the hit. That's not the case anymore. Look at PSG as they try to find a club to take on forward Randal Kolo Muani, whom they paid €80m to sign from Frankfurt just 18 months ago. They'll be lucky to get more than half what they paid for him if they can ever find a permanent deal and he's set to join Juventus on loan for the rest of the season.
1:36
Would Spurs or Juventus be a better move for Kolo Muani?
Julien Laurens updates on the battle for PSG forward Randal Kolo Muani, with Tottenham and Juventus both in the race.
Why? Partly because there just aren't that many centre-forward jobs out there, partly because there aren't many clubs who will spend €40m or more on a striker, but largely because the vibe has shifted. Clubs watch every penny now.
This doesn't just affect the biggest clubs, either. Those teams that relied on player trading as part of their business model -- Brighton or Brentford in England, Borussia Dortmund in Germany, Atalanta or Udinese in Italy, Monaco in France, or Sevilla in Spain -- are finding it tougher too. You're going to be more reluctant to spend €20m or €30m on that promising young winger you spotted if you think that, once he develops, you won't get much more than that back for him.
Take Dortmund's Donyell Malen. They paid €30m to acquire him from PSV Eindhoven as a 22-year-old in 2021. He didn't necessarily turn into the second coming of Lionel Messi, but he did score 15 goals as a winger last year and is a mainstay for Netherlands. Just 3½ years later, he joined Aston Villa for €25m.
Maybe this deflation is just a long overdue correction, one that was delayed somewhat by the wild Saudi Arabia spending two summers ago. Maybe clubs are realising that revenue won't continue to increase the way it did. Maybe they understand that regulators -- whether UEFA, Premier League, LaLiga (just ask Barcelona), whomever -- are serious about enforcing rules. Maybe they finally get the fact that was once billed as "investment in the squad" was actually some combination of ego trip and Ponzi scheme, and it actually gets really, really expensive.
Maybe they simply have come to terms with the fact that transfer fees and wages have reached such levels that once revenue stops growing vertically, you can only justify them if there's a certain number of suckers and irrational actors out there to mop up your mistakes. And there are fewer and fewer of those around.
Maybe we've reached some level of sanity. Maybe this will become a real, grown-up sustainable business one day.
