The English Transfer Premium.

stumpypeeps

The English Premium: A 2011 Transfer Price Index Review

by PAUL on JUNE 7, 2011 in NEW ANALYSIS

By Dan Kennett (additional notes by Paul Tomkins)

With the Summer transfer window open, the rumour mill in full swing and clubs quoting eight-figure sums with impunity for English players, it’s time to put some perspective on the figures by looking at some of the fees paid for young English players during the Premier League era.

£15m in today’s prices may still sound a lot, but there’s more money in football than ever before, so who moved for the equivalent of £15m/£20m sums in the past?

Updated Data

Graeme Riley has recently uprated the Transfer Price Index database so the Current Transfer Purchase Price (CTPP) is 2010/11 values – i.e. all transfers have football inflation taken into account, so that we can make apples with apples comparisons across the Premier League era. (The whole concept is outlined in full detail in Pay As You Play.)

The average price of Premier League purchases rose once in 2010/11 – up 22.1% on the previous season, after a 21.8% downturn the year before, as the recession took hold. The average transfer value for 2010-11 was £4.83 million, only marginally below 2008-09′s all-time high of £5.06 million. At the start of the Premier League, the average price was £594,000, so it’s an almost ten-fold rise in less than two decades.

The more expensive ‘old’ deals seem when applying TPI, the greater the difference between the fee and the average of the day. For example, between 2002 and 2007 the average price of a transfer was around the £2m mark; so someone who cost £20m was ten times the average paid by clubs. Ten times the average in today’s money is almost £50m.

Big Deal

When we look at English transfers in the Premier League, the same 3 continue to be at the top:

Wayne Rooney to Manchester United in 2004/05, now CTPP £62.6m

Rio Ferdinand to Manchester United in 2002/03, now CTPP £61.6m

Alan Shearer to Newcastle United in 1996/97 now CTPP £50.5m



However it’s fair to see that all 3 were either bona fide prodigies or borderline world-class players. The purpose of this article is to provide a reference point for the current transfer window by looking at The English Premium applied to fringe England internationals moving between English clubs.

Since Andy Cole moving to Man United for £7m in 94/95 (CTPP £33.8m), and having taken into account Rooney, Shearer and Ferdinand, another 21 players in this category have moved for CTPP sums in excess of £20m.

Way out on their own at the top and the only players more then £40m CTPP are:

Shaun Wright Phillips whose move to Chelsea in 05/06 for a scarcely believable £21m translates to £48.8m CTPP
Michael Carrick whose £18.6m in 06/07 translates to £41.2m
Then we see the first of the players who have an unadjusted CTPP because they’ve transferred in the past 12 months

Andy Carroll’s Torres-fueled £35m transfer to Liverpool
James Milner comes in 10th with his £26m move to Man City
Darren Bent is 15th following his £24m switch to Aston Villa.
Bent is one of four similar English strikers to appear on the list twice, with his £15.5m move to Spurs (CTPP £22.4m) ranked 18th.

Stan Collymore is ranked 6thand 8th
Chris Sutton 7th and 14th
Les Ferdinand 11th and 22nd
Other eye-popping figures for centre forwards include:

Emile Heskey to Liverpool in 2000, the £11m fee translating to a huge £32.9m CTPP (almost as much as Andy Carroll)
Kevin Davies ill-fated £7.25m move to Blackburn in 98/99 inflates to £24.1m CTPP
In amongst the plethora of attacking players in the list, there’s also a couple of midfield terriers to use as a benchmark:

Scott Parker’s £10m move to Chelsea in the first Abramovich summer of 03/04 comes in at £25.7m CTPP
Owen Hargreaves luckless £17m switch to Man United in 07/08 is £24.6m CTPP
At the bottom of the list there’s also space for a couple of £20m CTPP defenders

Joleon Lescott’s £22m move to Man City has already been inflated to £28.3m
Glen Johnson’s recent £18m switch to Liverpool rises to £23.1m CTPP
Graeme Le Saux’s £5m deal to Chelsea in 97/98 is £21.5m CTPP
Finally, one topical valuation to finish on is Ashley Young. His 06/07 switch to Villa for £9.65m coverts to £21.4m. With only 12 months left on his contract and a fee of no more than £15m likely, in real terms Villa could find themselves considerably out of pocket.

Signed By Year Player Original Fee £m Age when signed CTPP £m
1 Chelsea 05-06 Wright-Phillips 21.00 23 48.8
2 Man Utd 06-07 Carrick 18.60 25 41.2
3 Liverpool 10-11 Carroll 35.00 22 35.0
4 Man Utd 94-95 Andy Cole 7.00 23 33.8
5 Liverpool 99-00 Heskey 11.00 22 32.9
6 Villa 97-98 Collymore 7.00 26 30.1
7 Chelsea 99-00 Sutton 10.00 26 29.9
8 Liverpool 95-96 Collymore 8.50 24 28.5
9 Man City 09-10 Lescott 22.00 27 28.3
10 Man City 10-11 Milner 26.00 24 26.0
11 Spurs 97-98 L Ferdinand 6.00 30 25.8
12 Chelsea 03-04 S Parker 10.00 23 25.7
13 Man Utd 07-08 Hargreaves 17.00 26 24.6
14 Blackburn 94-95 Sutton 5.00 21 24.1
15 Villa 10-11 D Bent 24.00 27 24.0
16 Liverpool 09-10 G Johnson 18.00 24 23.1
17 Blackburn 98-99 K Davies 7.25 21 22.6
18 Spurs 07-08 D Bent 15.50 23 22.4
19 Chelsea 97-98 Le Saux 5.00 28 21.5
20 Villa 06-07 A Young 9.65 21 21.4
21 Villa 98-99 Merson 6.75 30 21.0
22 Newcastle 95-96 L Ferdinand 6.00 28 20.1

http://transferpriceindex.com/2011/06/the-english-premium-a-2011-transfer-price-index-review/

Dolph Starbeam

Thats a good read, the CTPP value on the SWP, Carrick and Heskey transfers is crazy.

stumpypeeps

Mark! wrote: »

Thats a good read, the CTPP value on the SWP, Carrick and Heskey transfers is crazy.

Yeah, crazy money at the time. It also puts into perspective the Carroll transfer and prospective Henderson deal.

Not quite as absurd as I initially thought.

cson

stumpypeeps wrote: »

Y
Not quite as absurd as I initially thought.

Ah now, that's frigging insane money.

If it was in Lira I'd tend to agree with you.

stumpypeeps

cson wrote: »

Ah now, that's frigging insane money.

If it was in Lira I'd tend to agree with you.

I think the insane money was spent on SWP.

Paparazzo

In the top 20 there's a good few players that wouldn't be considered a success.

stumpypeeps wrote: »

Yeah, crazy money at the time. It also puts into perspective the Carroll transfer and prospective Henderson deal.

Not quite as absurd as I initially thought.

considering he was injured and the transfer could have waited till the summer, it was a lot.

stumpypeeps

Paparazzo wrote: »

In the top 20 there's a good few players that wouldn't be considered a success.



considering he was injured and the transfer could have waited till the summer, it was a lot.

I did say it was not quite as absurd as I initially thought. I didn't say it was a rock of sense.

The over all point though is that in all the outrage about Carroll, Milner and potentially Henderson, they pale into significance when you look at the transfers of Rooney, Shearer and Ferdinand.

Its easy to get up in arms about paying £20 million now a days, however, looking back over the years, there has always been a high price for transferring players between English clubs.

flahavaj

I don't think £20m is that big a fee anymore to be perfectly honest.

stumpypeeps

flahavaj wrote: »

I don't think £20m is that big a fee anymore to be perfectly honest.

Indeed. I remember being surprised at Chelsea spending £10 million on Scott Parker.

sonic85

flahavaj wrote: »

I don't think £20m is that big a fee anymore to be perfectly honest.

i agree 100%. i think anything less than 15 is small money

ceegee

Is it just me or does the adjustment for some years seem far higher than they should be.

e.g. For 06/07 transfer prices are multiplied by roughly 2.215. Transfers made in 07/08 are only adjusted by 1.447. Seems a big drop for one year especially as the previous season (05/06) was 2.32 and 03/04 was 2.57

This massively inflates the value assigned to Carricks transfer compared to more recent signings

flahavaj

ceegee wrote: »

Is it just me or does the adjustment for some years seem far higher than they should be.

e.g. For 06/07 transfer prices are multiplied by roughly 2.215. Transfers made in 07/08 are only adjusted by 1.447. Seems a big drop for one year especially as the previous season (05/06) was 2.32 and 03/04 was 2.57

This massively inflates the value assigned to Carricks transfer compared to more recent signings

I thought that as well, obviously the ratio will get bigger as you go back in time, but it seems to take a very big leap somewhere between '06 and '08. I'd love to see the exact way they work it out before I take it as gospel tbh.

ilovelamp2000

Erm .... to establish there's a premium on English players would you not have to do some sort of comparison with the prices of non-English players ?

Admittedly I skimmed the article, it seems nonsensical.

Edit: and that's before I noticed Tomkins' name on it

ceegee

Another thought: not sure if the criteria used of fringe English team players could really be applied to all those players at the time of signing, wouldnt have used the term to describe Hargreaves, Le Saux at the time of their signings, arguments could be made for some others as well

PHB

CTTP is a pretty ludicrous idea, at least as it's presented. Year on year rise overinflates the transfer values due to Chelsea and City. They are acting outside of a normal framework of what is appropriate. United spending 30 million three years ago and spending 30 million now is pretty much the same.

stumpypeeps

PHB wrote: »

CTTP is a pretty ludicrous idea, at least as it's presented. Year on year rise overinflates the transfer values due to Chelsea and City. They are acting outside of a normal framework of what is appropriate. United spending 30 million three years ago and spending 30 million now is pretty much the same.

Football transfer fees can hardly be judged against normal economic inflation though. For me the biggest transfer remains Shearer to Newcastle, that was colossal at the time.

The fact Chelsea and City are inflating prices is as valid a determinant of inflation as any.

the untitled user

PHB wrote: »

CTTP is a pretty ludicrous idea, at least as it's presented. Year on year rise overinflates the transfer values due to Chelsea and City. They are acting outside of a normal framework of what is appropriate.

One individual injecting money into a market still raises the total worth of said market. Chelsea and City have overinflated the market and it's having a major knock-on effect, see the deals for Bent, Carrol etc.

PHB wrote: »

United spending 30 million three years ago and spending 30 million now is pretty much the same.

Ah, no it's not.

2007: £210m
2010: £286m

As a proportion of total revenue, £30m 3 years ago is the equivalent of over £45m today.

K-9

stumpypeeps wrote: »

Football transfer fees can hardly be judged against normal economic inflation though. For me the biggest transfer remains Shearer to Newcastle, that was colossal at the time.

The fact Chelsea and City are inflating prices is as valid a determinant of inflation as any.

That was the big one for me, brought it to another level.

Collymore and Cole were big and people were asking questions back then but that really changed things.

Rooney was massive money too for a young player, same with Ferdinand for a defender.

steelcityblues

SWP and Carrick at #1 and #2 are first class proof of the insane amount of hype that comes with most English 'superstar' players.

MisterAnarchy

More English premium madness today with Jordan Henderson moving to Liverpool for a reported £20m.
Liverpool seem to have lost the plot ,splurging over £55m on Carroll and Henderson.

Beefy78

steelcityblues wrote: »

SWP and Carrick at #1 and #2 are first class proof of the insane amount of hype that comes with most English 'superstar' players.

It's not about these being English 'superstar' players. It's about the selling clubs being in a league in which they receive a huge amount of money for surviving for another season and therefore have little financial pressure to sell. Plus have less worries when they buy British that the player won't be able to settle, won't be able to speak to language or will start itching for a move to Spain after a couple of years.