EPL's transfer market bubble set to burst
The financial squeeze put on English Premier League clubs by the coronavirus crisis could be felt across the continent in the coming months, as the well to fund massive transfer fees runs dry.
For each of the past four summers, EPL clubs have flexed their financial muscle to splurge over £1 billion (S$1.77b) on transfers.
That has helped spread the wealth of television contracts worth billions across Europe and, crucially, down the divisions to cash-strapped clubs in England.
Now, even the world's richest league is facing economic meltdown.
EPL matches have been suspended indefinitely with no return expected before mid-June at the earliest.
Broadcasters could be due a rebate worth a reported £762 million if the season is not completed and, even when the games do resume, they are likely to be behind closed doors, quashing income from gate receipts.
The Covid-19 shutdown is also expected to lead to a curb on commercial revenue, causing EPL clubs to fret about just meeting their wage bills for the next few months.
"Many clubs could be threatened by insolvency and transfer plans came to a standstill for most clubs because of the many uncertainties," said Matthias Seidel, founder of Transfermarkt, a website specialising in transfer values.
According to Transfermarkt, 1.8 billion euros (S$2.78b) has already been wiped off the value of EPL squads.
"There's no doubt the actual value of players right now has gone down in all squads," said Brighton owner Tony Bloom.
"How much less, I have no idea. It depends on how the next few months play out."
Tottenham Hotspur striker Harry Kane, who said last month he can't guarantee staying at the London club should there be no progress, could be the next big name on the move.
Finance expert Kieran Maguire told AFP there will be significant transfer-fee deflation, adding that "the vultures and predators will pick off good players for very modest fees".
Bundesliga chief executive Christian Seifert told the New York Times earlier this month that the transfer market will "collapse" and that "some leagues will understand that money is nothing that is coming automatically every month from heaven".
That may have been a slight on the EPL's overindulgence on transfer fees.
But, as the biggest spender, the economic earthquake felt by English football will ripple across Europe for some time to come. - AFP