Premier League experience brings its own transfer fee

The football press and fans alike are up in arms once more. Another English player has moved for a whopping fee, Jordan Henderson making the journey from the north-east to Merseyside and you can almost taste the outrage. Actually, make that two players moving for big money. Phil Jones is winding his way to Old Trafford for a measly £16m or so.

As is traditional during such moves, the debate has reignited about the premium put on British players’ transfer fees. But it is something of a myth to think this premium only applies to them.

I have written in the past about how a transfer fee is never easy to calculate – it is, to state the obvious, determined by so many factors such as age, potential, injury record, length of contract left and so on. But there is certainly some truth in the perception that British players cost more than foreign players, on average. And this is logical.

For many, it is a case of familiarity, and experience. Many managers are more knowledgeable about British players, and have seen more of them as they will undoubtedly already be playing in England and thus have Premiership experience. Very few British players play abroad, so they are a safe bet regarding settling in at a club. They will not pine for foreign climes, moan about the weather, live out of hotels, or struggle with the lifestyle, or struggle to communicate. They are ready to play as soon as they are signed. And as they don’t tend to play abroad, this means most purchases are within the premier league (or championship), and player trading within the same league/country is on average more expensive than player trading between two leagues in different countries. Also, if a manager wants a foreign player, he may well be thwarted anyway – there’s no problems with visas or work permits if Ian Holloway wants to buy Charlie Adam.

But this rule also suggests that the idea that the premium is merely for British players is something of a myth. More likely it is a premium for a player with premiership experience moving between premiership clubs. So while Carroll can move for a somewhat inflated £35m, at the same time Torres is moving for a ridiculous £50m. If Carlos Tevez was bought by Chelsea for example, Manchester City would probably want close to the Torres fee. If he moves abroad, City will have to accept a lot less. When Mark Hughes was manager of Manchester City, he was intent on targeting players he knew domestically (not exclusively) – and City consequently paid over the odds for the like of Joleon Lescott and Roque Santa Cruz.

And there is another clear reason for this. The premium seems to be less pronounced in other countries. French players don’t tend to move between French clubs for huge sums of money. Quite simply, English clubs have more money than most.

As a result the prices are automatically jacked up higher, as it becomes a buyer‘s market. Without Sky money, and Champions League income and massive sponsorship deals, there would be no premium on players such as Henderson, Jones or Carroll, as there would be no one to pay that much. It is simply a case of supply and demand. Deloitte only today released figures for the 2009/10 season, showing that for the first time Premiership revenue broke through the £2 billion mark (£2.03 billion to be precise). Half of that comes from broadcasting revenue. Wage bills are following suit, taking up 68% of revenue.

Any premium that may exist on English players is exacerbated because of the modern need for “home grown” talent. The media, and many fans too are obsessed with teams having British players at their heart. Any club that doesn’t has lost its soul. But legislation too has driven on this need for domestic talent. It is somewhat ironic that transfer windows were brought in because of the European Commission’s concern at spiralling transfer fees, yet the legislation concerning quotas on home-grown players in squads has helped continue the trend.

Look at what Richard Scudamore had to say when the home quota rules (and 25-man squad) were brought in, requiring 8 “home-grown” players in the squad of 25.
“The definition of home grown is trained for three years under the age of 21 by somebody in the English and Welsh professional system.
(Players who are aged under 21 are eligible over and above the limit of 25 players per squad.)
Scudamore believes the England team will ultimately reap the reward.
“It’s not in the club’s interests to stockpile players. It will make buying home-grown talent more attractive,” he said.
“We’re not going down the route of a nationality test but what this will mean is that you just can’t buy a team from abroad. We think it will give clubs an extra incentive to invest in youth. We think that one of the benefits will be that it will help the England team.”

Maybe he is right, maybe that is drivel. But the investing in youth has just become even more expensive. Many teams prefer to stockpile foreign youth for cheaper prices, knowing that a few years down the line they will be considered home grown anyway.

Henderson and Jones may well be worth every penny, being highly rated by most. But when the likes of Michael Mancienne can be transferred abroad for just £1.75m, it shows that a premium on youth and home talent still exists – but it is a premium on premiership experience as much as anything.