Transfer fee tables misread the gap between City and its rivals

Key takeaways

• A table of transfer fees by season records when a deal was signed, not when its cost was charged in a club's accounts.
• Under amortisation, a fee is spread across the length of the player's contract, so one season's purchases weigh on several later seasons.
• Wages often cost more over a contract than the fee itself, and they never appear in a transfer spending comparison.
• The biggest structural difference between Manchester City and its established rivals in this period was the source of funding, not the size of the fees.

Fee totals are the wrong measure for this comparison

A discussion on the r/soccer forum set out to compare Manchester City's transfer spending with that of the "Red Cartel" season by season, from 2008/09 to 2017/18. Supporters use "Red Cartel" informally, usually for Manchester United, Liverpool and Arsenal, the established clubs who were most associated with arguments for spending controls in that decade. The material available for this article does not include the post's figures. This piece does not try to reconstruct them, and it makes no claim about which side spent more in any given season.

The argument here is about method. Lining up gross transfer fees by season is the easiest way to compare clubs, and it is also one of the least informative. It treats a fee as a one-off payment in one year, when the accounts treat it as a cost spread over years. It ignores wages, which are usually the largest football cost a club carries. Most importantly for this comparison, it says nothing about whether the money came from what a club earned or from its owners. City was bought by Abu Dhabi United Group at the start of the period. For City in those years, that last question is the one that matters, and fee tables cannot answer it.

None of this means the fee tables are useless. They show which clubs bought most aggressively and when. But a reader who wants to know whether one club outspent a group of rivals, and how that was paid for, needs to look at three mechanisms that the tables leave out.

Amortisation spreads a fee across the contract

When an English club buys a player, the fee does not hit the profit and loss account in one go. The player's registration is recorded as an intangible asset. Its cost is then written down in equal instalments over the length of the contract. A player bought on a five-year deal adds a fifth of the fee to costs in each of those five years, unless the contract is extended or the player is sold first.

This affects any season-by-season comparison. Suppose a club spent heavily in one summer and lightly in the next two. In the accounts it carries much the same transfer cost in all three seasons. A fee table shows a spike followed by two quiet years. The accounts show a plateau. Both are accurate, but they answer different questions: one shows when the club went shopping, the other shows when it paid for it.

Amortisation also changes the result when a player leaves. If the player is sold before the contract ends, the profit or loss on the sale is measured against the remaining book value, not the original fee. A club that sells a player it has already largely written down can book a sizeable profit even if it sold for less than it paid. Gross fee tables cannot show this. Net-spend tables, which subtract sales from purchases, still compare cash amounts rather than accounting effect.

For a period that begins with one club's change of ownership and runs for ten seasons, this matters a great deal. Early, heavy purchases would keep weighing on the accounts for years. Purchases at the end of the period would still be weighing on accounts after 2017/18, beyond the range the comparison covers.

Wages are the larger, invisible line

Transfer fees attract the headlines because they are announced, or at least reported, when a deal is completed. Wages are rarely made public player by player. In aggregate, though, they usually make up the larger share of a club's football spending. A player on a long contract can easily earn more over its life than the fee paid to sign him.

A comparison based only on fees therefore leaves out the main cost of building a squad. It can also distort the picture between clubs that buy in different ways. One club may pay a large fee and a moderate salary. Another may sign a player at the end of his contract for no fee and pay a much higher salary, sometimes with a large signing-on payment to the player or fees to agents. The second deal costs nothing in a transfer table, yet in total it may cost as much as the first or more.

Over the ten seasons in question, the three established clubs and City all signed players both ways. Without wage data from the clubs' published accounts, nobody can say how the totals compared once salaries are included. That figure is not available here, and it is the one most likely to change the overall comparison.

Owner funding versus earned revenue

The third mechanism matters most for this pairing of clubs. A transfer fee is the same amount whoever pays it. Whether it is sustainable depends on where the money comes from.

The established clubs largely paid for squad building from revenue they generated themselves: matchday income, broadcasting money and commercial deals built over many years. Some also had owners whose acquisitions were financed with borrowing secured against the club. That is a different arrangement again, and it can reduce rather than increase what a club has available to spend.

City's position after the takeover was different. Its new owners could put in equity, money given to the club rather than lent to it. That allowed spending beyond what the club's revenue at the time could support. UEFA's Financial Fair Play regulations, introduced during this period, were designed to address exactly this situation. Their break-even requirement compared a club's football income with its football costs over a monitoring period. Owner equity injections counted as funding rather than income, so they could not offset losses above the permitted limit. Spending on infrastructure, youth development and women's football was generally excluded from the calculation. That is another reason transfer and wage spending sat at the centre of the test.

So a table showing City and a group of rivals spending comparable sums in a given season does not mean they were playing by the same economics. The regulators' framework took funding source as the central variable. A fee comparison leaves it out.

The case against: fees are what decide squads

The strongest objection is that this argument over-complicates a simple and legitimate question. Fees are the price of access to established players. A club that can pay higher fees, more often, can reach the best players available on the market. Amortisation changes when a cost is recognised, not whether it was incurred. Over a full decade the timing effects largely even out. Ten seasons of total gross or net spend is a reasonable proxy for total transfer investment, whatever the annual accounting profile looks like.

On wages, the objection runs that clubs paying the highest fees also tend to pay the highest salaries. If so, fees serve as a rough index of overall spending rather than a misleading one. Leaving wages out may understate every club's costs without changing the ranking much.

On funding, a fair critic would point out that the established clubs' revenue advantage was itself built partly on earlier spending and earlier success. Commercial income does not appear from nowhere. If the question is simply how much each side put into the transfer market, the source of the money is beside the point. A fee is a fee. The comparison in the original post, setting one club against a group of three, already acknowledges the scale of the gap in the most direct terms fans can use.

This is a serious objection. It is also probably right that, over a full decade, fee totals point in roughly the right direction on how much money went into the market. Its weakness is that it answers the question "how much?" and not "how?". The second question explains why this rivalry turned into a regulatory argument at all.

What would change the conclusion

Several kinds of evidence would test this argument, and some could overturn it.

First, a reconciliation of each club's annual reports across the ten seasons, showing amortisation charges, wage bills and profit on player sales side by side. If the order and relative gaps between City and the three established clubs came out much the same as in a gross fee table, the claim that fee tables misread the gap would be weakened considerably.

Second, figures on how each club was funded: equity injections, shareholder loans, external borrowing and retained earnings over the period. If the funding mix turned out more similar than assumed, the third mechanism would carry less weight.

Third, a clear statement of which clubs the "Red Cartel" grouping covers and how the original comparison was built. The source material does not say whether it used gross or net figures, which data provider it relied on, or whether add-ons and conditional payments were counted. Each of those choices can change a season's total, and none is known here.

Finally, comparisons over longer windows on either side of the 2008/09 to 2017/18 range would show whether the pattern reflects a lasting structural difference or the particular timing of one ownership change. Until that evidence is put together, the safest reading of any season-by-season fee table is the one given here: it shows when clubs bought, but not what that buying cost them or who paid for it.

Sources and further reading

• Published annual reports and financial statements of the Premier League clubs concerned, for amortisation, wage and funding data
• UEFA, published Club Licensing and Financial Fair Play regulations and the explanatory material that accompanied them
• Premier League, handbook rules on player registration and club finances
• Football finance reviews by major accountancy firms, for sector-wide context on wages and revenue