ECONOMIC IMPLICATION OF TRANSFER OF PLAYERS ON DEVELOPMENT OF SPORTS

Transfer of players between clubs has been a major source of funds for the clubs. The main reason why players move from one club to another is to experience and play sports at the highest level and also to get huge payment for it. When professional players come into a particular club in a country such players would tend to either increase the fan base of the club or promote sponsorship of that particular club in addition to the amount of money that might be made from the sales of jersey and ticket on that club. For instance if a player like C. Ronaldo and Messi comes to a local club like Lobi stars the following would be observed in Lobi stars;
1. There would be huge sales of jersey
2. More people would come to watch Lobi stars play just to see Messi and C. Ronaldo and this would foster an increase in their fan base
3. Some companies would definitely want to sponsor Lobi stars F.C
4. Lobi stars would be a threat to other clubs in the tittle race
5. Sports development would pick up in the state Lobi stars is located.
Meanwhile in the club Messi and C.Ronaldo came from though they might gain more money from their sales the following might still happen;
1. A reduce in the quality of sports in their previous clubs
2. A loss of fans from that club
The transfer system is the automatic mechanism that re-distributes money from rich clubs to poor clubs, that it ‘cascades’ cash down the pyramid of clubs, that it is the ‘life-line’ of the smaller clubs who, somewhat oddly in this official vision of what the transfer system does, seem better placed than the big clubs to find and develop talented youngsters. In addition, many small clubs are in danger because of the effects of the Bosman ruling. The plain truth is, however, that the available evidence does not allow anyone to assess the full economic effects of the traditional transfer system, but it is relatively easy to show that it did not do, and does not do, what the football authorities like to assert it does. Sensible policies cannot be built on fiction.
Since the Bosman case, football authorities have placed an even greater emphasis on the training and development clubs give to young players as their justification for the retention of some kind of transfer fee in the future, setting it, apparently, on a more substantial and secure foundation. The Advocate General of the Court of Justice seemed to accept some of this argument, though from his own prejudice rather than any evidence, but was skeptical about the utility of the argument that transfer fees in future should be regarded as legitimate compensation for training and development of young players, stating:
‘However often that view has been repeated in the course of these proceedings it still remains unconvincing’ (Court of Justice, 1995a: Para 236).
He gave a number of reasons for his view, one of which was that fees paid bore no earthly relation to the apparent costs of training and development, another that clubs had benefited from the players performance as enhanced by training and development so why should they expect more reward? He further stated about any new transfer system:103
Such rules would in my opinion have to comply with two requirements.
1. First, the transfer fee would actually have to be limited to the amount expended by the previous club (or previous clubs) for the player’s training.
2. Second, a transfer fee would come into question only in the case of the first change of clubs where the previous club had trained the player.
Analogous to the transfer rules in France, that transfer fee would in addition have to be reduced proportionately for every year the player spent with that club after being trained, since during that period the training club will have had an opportunity to benefit from its investment in the player (Court of Justice 1995a: Para 239).
The new transfer systems proposed or implemented in Europe certainly do not align with these suggestions, and it is as well to note that the actual judgment in the Bosman case was more dismissive of this line of argument than the Advocate-General if anything (Court of Justice 1995b: paras 108-9).
So the new, emerging, transfer systems are based on shallow foundations. Both these authorities emphasized the alternative of rewarding smaller clubs via some more general redistribution of football income. As I have indicated these have been the options since professional football began, and the governing bodies of soccer have never presented solid arguments as to why the second option cannot be adopted. Moreover, despite all the assertions of the football authorities, there is little or no evidence about what most football clubs actually do with or to all the youngsters that pass through their hands! The truth is that current arguments that clubs deserve a fee for all the ‘investment’ they make in ‘training and developing’ youngsters are just as unsubstantiated as the supposed economic effects of the traditional transfer system – a but that’s another story (Moorhouse, 1997).