The loan system certainly has benefits to both sides, most notably it allows the parent club to give vital experience to a young player and the club receiving the loan players gets a high quality player at a relatively low cost. In the modern era loan fees are usually involved but they may only really need to pay a portion of the wages. However, the reality is it’s not really a 50-50 exchange and the real winners in all of this are the parent club.
The benefits for the parent club are massive if it is really considered. Players that are loaned out are usually those that are not currently involved in the first-team. This may be because they are young and not currently ready for first-team action or because they are older experienced players that are just not in favour. Now to take the example of the latter category for a Premier League club then they would not be able to use them if they are not currently within the 25 man squad. So the options are down to sell the player, allow the player to play reserve team football or loan them out. Sticking with the assumption we are dealing with Premier League clubs, if the player comes under the youth category then he is likely to be exempt from the 25 man squad (he can still play in the first-team despite not being in squad, provided he is 21 or under). However, if we assume he is not ready then he simply will not get a look in. But let’s also assume he is highly rated, so they won’t want to sell. The options are left to reserve/youth football or to loan them out.
Now in general a loan spell is likely to be far more valuable than reserve/youth football and will give a far clearer indication to the actual ability of the player. It is also far better for the player to be playing with established first-team players than other young or fringe players.
Therefore we have established why the Premier League parent club would want to loan a player. Now, for a youth player the obvious benefit is to get some much needed first-team experience into the player. Which of course will be vital for the player’s development – but at this stage the parent club is taking none of the risk. Any mistakes that could be made will be at the club he is on loan to. Now, if we assume he goes onto be a big success and his value sky rockets then the parent club would be able to sell for millions. However, a lot of the reason behind that is the time he spent out on loan – so is it really fair that they get no reward from it? Sadly, probably yes – because they never owned the player.
If the player is more experienced then the parent club will still benefit – even though there is not so much scope for the value to increase. But vital match fitness can be gained – which may be particularly important if the player has recently recovered from injury. But in general the parent club could benefit more for experienced players due to the likely higher loan fee and possible higher wage contribution.
The club bringing in loan players may gain the benefit of having the use of the player for the agreed terms of the loan and in some cases they are required in order to cover for injuries. However, in general they are a quick fix and are not really useful for long-term squad development. Some clubs have overused the loan system and this creates all sorts of problems. The biggest of these problems is the fact that the loan players will leave at least at the end of the season and will then have to be replaced. Now, if the team is developed by investing in young players then a team can be developed in a better way.
There are also problems with the use of loan players, because there can be a danger of them not feeling like proper players and even if an exceptional player is found – there may be no real hope of signing the player. Also there is the issue of the player not having the same level of affection for the club and ensuring they also give 100%. Keep in mind loan players may have mixed feelings about going out on loan and may have more to do with playing elsewhere. Also it generally is not going be good for team spirit to have a loan player that believes him to be better than the other players at the club.
Now, there are exceptions with loan players and there are certainly some good ones. However, in general loan deals are far more beneficial for the parent club and in the long-term they will be the ones to gain. Loan deals will continue to happen and they should be used carefully to cover for injuries and add that little bit of extra quality but not to build a squad around.