Were English Premier League's transfer window signings really that expensive?
Using a transfer index, the big spending purchases were actually cheap if you take into account the rate of inflation
This summer, English Premier League clubs collectively spent a staggering £858 million (HK$1.09 billion) in player transfer fees, which beat last year's record haul of £630 million by over 33 per cent - but what do these numbers really mean?
Over the past two decades since the EPL began, players' salaries, transfer fees, sponsorship deals, and club finances have generally shot up. Much of this "inflation" has to do with the incredible TV deals that the EPL generates with every three-year contract cycle.
You can see this after new TV contracts were signed for 2001, 2004, 2007, 2010 and last season.
So it is useless to compare the 1996 British transfer record of £15 million Newcastle paid for Alan Shearer to the current record, the £59.7 million Manchester United paid for Angel di Maria this summer. Media headlines do not take into account inflation. Exactly how does Shearer's transfer fee compare with Di Maria's almost two decades later?
Mario Ballotelli cost £16 million this summer and appears to be great value for money especially when compared with his own transfer fees in the past
Enter the Current Transfer Purchase Price (CTPP), an index that takes into account soccer inflation and converts transfer fees to "modern money". In 1992, the average transfer fee was £594,309 and by 2011 it was almost 10 times that, £5.6 million. This year the Premiership transfers of 103 players produced an average fee of £8.3 million. The CTPP allows us to compare like with like, so that Shearer (when the 1996 average transfer fee was about £1.5 million) would be worth £83.5 million today - easily surpassing Di Maria for the British transfer record.
There are lots of fun calculations and comparisons you can do with the CTPP. For instance, although the £50 million Chelsea paid Liverpool for Fernando Torres in 2011 is the largest sum ever paid by the Blues, it should not be regarded as the club's transfer record in terms of purchase value. This should go to the £30.8 million Chelsea paid AC Milan for Andrei Shevchenko in 2006, equal to £76 million in 2011 money. So Torres does not deserve the label of being the club's most expensive flop.