The transfer of Jude Bellingham from Birmingham City has been a spectacular success with the 17 year-old featuring in all but one of BVB’s five league matches this season and the talented England U-21 international, who joined from second tier Birmingham City for €27m making him one of the most expensive transfers in Borussia’s transfer history, has not been the only player to make an instant impact across the German league.
The policy of recruiting from the English Premier League has over the last two seasons brought many talented young players including Oliver Burke (RB Leipzig), Ryan Sessegnon (Hoffenheim), Tahith Chong (Werder Bremen), Reece Oxford (Augsburg) and Jadon Sancho and Jude Bellingham (Borussia Dortmund) from the English top tier to Germany.
From the Bundesliga’s perspective the policy of recruiting academy players from the Premier League has been successful and also potentially highly profitable and it is not all one-way traffic with players like Timo Werner of RB Leipzig and Kai Havertz moving to Chelsea this summer.
The policy however is starting to come under fire in the English game. Six months since the last matches with full attendance in March, the impact of the pandemic crisis in the English game is starting to bite. Transfer activity in the Premier League in 18/19 was £1.5bn between the 20 clubs of the Premier League. In contrast in the same period in 19/20 income was down to £1.1bn, a reduction of £400m over the previous season with the value of transfers halved in the same period to an average of £24m per club.
Clubs across Germany have been given licence by the regional health authorities to allow limited numbers of spectators which has provided some much-needed income for Bundesliga clubs. BVB saw a home crowd of 10,800 in attendance against Borussia Mönchengladbach last month. The impact of playing behind closed doors in the Bundesliga is a vital issue for German clubs but clubs gate receipts to revenue ratio in the Bundesliga remains at a comparatively more sustainable 20%.
Premier League clubs are much more dependent on gate receipts with 36% of revenue (2019/20) coming from gate attendances. In the 72-club English Football League (EFL), representing tiers two to four, gate receipts make up a critical 45% of revenue and under the pressure of playing behind closed doors, two fourth tier clubs (League 2) Macclesfield and Bury went into administration in the last 3 months.
However, with a current Covid-19 infection rate of 400 per thousand in the UK compared to 156 in Germany there is no sign of relief and spectators attending football matches in England in the immediate future. The EFL are currently seeking a vital financial aid package in the region of £250m from the Premier League. An offer of £50m having been rejected by the EFL earlier this week.
Big money transfers come under criticism in Premier League
Manchester United CEO Ed Woodward’s almost obsessive chase for the signature of Jadon Sancho culminated in a spectacular offer in the transfer window, reported to be in the region of an eye-watering €90m- even more spectacular considering that Sancho joined BVB two-and-a-half years ago from Manchester City for just €7m.
Few would disagree that €83m would be a spectacular rate of return on a player who is just 20 years old, even one with the talent of Sancho, but in spite of Borussia racking up an overall trading loss in 18/19 of €49m, the first in 12 years, the offer was rejected. Proof of the value BVB put on the talent of the London born winger.
In the current pandemic hit market, the magnitude of the Sancho offer and policy of academy players moving to the Bundesliga, drew criticism from an unexpected source earlier this week.
In an interview with The Guardian newspaper the CEO of Sancho’s former club Manchester City Ferran Soriano called into question the validity of the policy of selling English academy players to Bundesliga clubs altogether but fell short of laying the blame for the ‘talent drain’ at the feet of Bundesliga clubs.
The former manager of Spanish giants Barcelona emphasised structural weaknesses in the English league system which are denying academy players an opportunity to prove their ability to first team coaches:
“There are problems, the challenges of developing players in England where B teams are not allowed, we have a development gap of boys that are 17 or 18, they don’t find the right place to develop and for example they are taken from us by the German teams who try to sell them back to us for a price which is 10 times what they paid. This is madness and something we need to solve and now maybe the crisis will give us the opportunity and will nudge us to get together and solve these issues.”
The issue of whether to allow B teams of Premier League clubs as is the case not just in Germany but in Spain where academy players can get match practice at an elite level whilst remaining within the set-up of the club, is a wider structural issue and one which is unlikely to be resolved in the near future.
All eyes are now on the Premier League to provide the support package to the EFL clubs which is expected imminently. But it is not automatic, the support is subject to assurances on salary caps from the Championship (second tier) clubs which in 18/19 reached a critical salary to revenue ratio level of 107%.
The sustainability of Premier League salaries in particular at clubs like Crystal Palace where the ratio is 75% are coming under fire even though the overall average is 65% this still compares critically to the Bundesliga’s ratio of 49%.
Whilst there are financial problems in the German football pyramid, in particular third tier (3. Liga) 1 F.C Kaiserslautern are facing some very critical financial negotiations which could see the four-time German Champions facing potential insolvency, prospects for the Bundesliga remain in contrast markedly better. In contrast to the Premier League where only 8 of 20 top tier clubs made an operating profit in 18/19, the Bundesliga was Europe’s most profitable league with all but three clubs achieving profitability over the same time period.
What is also clear is that criticism of the transfer policy of German clubs is not always justified. The selling back of talent can work to benefit English clubs. Borussia’s title rivals Bayern Munich shelled out €49m to Manchester City in the summer transfer window for Leroy Sané, who two and a half years ago, then 21, was bought for €29m arguably a pretty good rate of return for City.