Financial explosion in world football: Сauses and effects

It seems that in the past weeks, the center of world football has moved to Asia and the United States. Most big news comes from those regions, with big club transfers, new contracts for football stars, exorbitant compensation packages, Messi’s scores and much more. Europe found itself slightly in the shadow and not only because we are between seasons. These developments are not coincidental at all, and we would like to elaborate. There are plenty of reasons why European football is facing new and serious rivals in the United States and Asian countries. But first things first.

Argentina national team player Lionel Messi. Grigory Sysoev / RIA Novosti

It all began in the early 21st century when the FIFA World Cup was for the first time held in two countries, Japan and South Korea. It was then when many Japanese clubs invited good players from European and South American clubs, offering them very lucrative conditions. There was much talk about the Japanese football league. Then it was China’s turn, when many Chinese clubs spent a lot of money on transfers and contracts for European players. By the way, it was then when Vagner Love and Hulk left CSKA and Zenit for China. But it was not star players who transferred to Japan and China.

Then the Arab countries and the US stepped up, and for good reasons. First Qatar, and then the US gained the right to hold the FIFA World Cup. It is noteworthy that the US will hold the 2026 Cup together with Canada and Mexico, and I am sure that it will be the US that will take the biggest advantage from it.

Yes, famous footballers and even some star players joined the American and Arab clubs, but only after the peak of their career, in fact they went there to retire or earn big bucks. But the times are changing rapidly now.

Some Arab countries developed an impressive and long-term football strategy, which began with the financial expansion to a series of European clubs. For instance, let’s take the French PSG and British Manchester City. These famous clubs with a rich history received new wealthy owners from Qatar and the UAE, respectively. They enjoyed a big budget, unlimited transfer costs, new star players and fantastic contracts. However, their results in European cups vary. PSG, even having Neymar, Mbappe and Messi, has failed to win anything in Europe, while Manchester City managed to score the long-awaited victory in the Champions League.

In 2022, Qatar successfully held the 2022 FIFA World Cup, and it became clear than even a relatively small and not famous for its football country can receive long-term benefits from this event. Many in the world learned that there is such a country due to the football event it hosted. The tourist flow to Qatar increased, and it is probably just the beginning. Qatar immediately received followers and rivals. Saudi Arabia is one of them.

Saudi Vision 2030, a development program designed to reduce the country’s dependence on oil, has found a fresh impetus. Plans call for allocating several trillions of dollars to the program, which pays a lot of attention to the development of tourism and sports, especially football. By the way, Saudi Arabia filed a preliminary application to host the 2030 FIFA World Cup, but then revoked it probably to prepare for the next cycle.

The first time when a Saudi club invited a star footballer was with Cristiano Ronaldo. Al Nassr FC offered him an annual compensation of about $200 million (however, the media provide contradictory information). It has never happened in the history of football that a player earned this much money. And then, as they say, things were up and running in no time.  

During the current off-season, various Saudi Arabian clubs began inviting best footballers from various top European clubs – such as Karim Benzema, N’Golo Kante, Jordan Henderson and Marco Verratti, just to name a few, promising them large contracts. There even was an unsuccessful attempt to sign Lionel Messi, who was offered a whooping annual salary of €600 million but ended up joining a US club. This makes one think about the sources of such immense amounts of money. As simple as it sounds, Saudi Arabia’s Ministry of Sport has allocated over €19.5 billion to local teams for transfers until 2030, with a stunning amount of €2.5 billion for each year. And this apparently seems to be only the beginning of this financial madness.

Another ‘fairytale’ almost took place when Saudi Arabia’s Al-Hilal made an attempt to sign French superstar Kylian Mbappe, making a record-breaking offer of €300 billion for the transfer of the PSG footballer, whose annual salary could have amounted to €700 billion. Although Mbappe has rejected talks with the club over a possible move, the story is not over yet. Regardless the outcome, it is important to have an idea of immense financial amounts involved in negotiations.

As regards the interest in football in the United States, things are much more pragmatic: any sport there is primarily business. Preparations are now in full swing in the US for the 2026 FIFA World Cup, with organizers’ interests coinciding with those of the Major League Soccer. Lionel Messi joining Inter Miami CF is of great importance to everyone, serving as a substantial ‘warm-up’ for the upcoming tournament that involves the legendary world champion. Yet, this is solely business for the football club and the league. Sports media are raving about Messi’s goal-scoring streak; meanwhile, many have failed to note the arrival of other prominent players in the United States, such as Sergio Busquets, Messi’s former long-term FC Barcelona teammate now also playing for Inter Miami. I believe that the amount of big football transfers to the US will only grow.

This sort of a financial explosion has partially affected even the Russian Premier League. Recently, last season’s RPL top scorer Malcom has joined Saudi Arabia’s Al-Hilal, a transfer that brought €60 million to FC Zenit St. Petersburg, making it Russia’s most expensive one. This may be only the first sign. For Russian Premier League clubs, this would be favorable – but only time will tell.

In conclusion, we can assume that the world football industry may see intensified competition in the coming years, with Asian and American clubs getting on par with those in Europe. Transfer values and contracts for players, particularly star footballers, will reach unparalleled amounts. Whether paybacks are possible in this case is largely questionable, but we will obviously see unprecedented media activity and a surging interest from football fans across the globe. This being a forecast, time will ultimately put everything in its place – which is equally intriguing and exciting.

By Vladimir Lednev, Vice President of Moscow Financial and Industrial University Synergy, Scientific Director, Faculty of Sports Industry, Head of the Department of Sports Management, Doctor of Economic Sciences, Professor

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