The Most Expensive Squad in Football History

This week UEFA published the European Club Finance and Investment Landscape Report. The BBC were quick to report on this with the headline claim that Man Utd’s 2022/23 squad is the most expensive squad in football history. But is that really right?

The Claim: Man Utd 2022/23 the Most Expensive Squad in Football History

The BBC article focuses on the transfer fees paid for players. The BBC compared the initial transfer fee paid for each of the players still in clubs’ squads. Man Utd’s squad last season cost £1.21bn in such fees. This is more than the £1.13bn that the 2020 Real Madrid squad cost.

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Man Utd’s squad last year was the “most expensive ever assembled” in football, says a Uefa report.
— BBC Sport (@BBCSport) Feb 15, 2024

On face value, it seems a reasonable claim. However, I think that using only total transfer spend gives an incomplete picture. I don’t think this reflects what we know about football finance in 2024.

Problems with only considering Transfer Fees

Discussions about UEFA Financial Fair Play and Premier League Profit and Sustainability Rules have become more prevalent in recent years. Chelsea’s transfer activity has also made more people aware of how football accounting functions. Given, this I think focusing on just total transfer cost is misleading. It disregards two important elements:

Player Wages

The transfer fee paid for a player is only one element of their cost. Player wages also vary wildly between clubs. For example, Sportrac estimate Luton Town’s player wage bill for this season at just £20m. This is far less than Man Utd’s wage bill of £180m. Man Utd pay Casemiro an estimated £18.2m – almost as much as the entire Luton squad.

Kylian Mbappé, one of the new generation of football superstars, is currently in a contract deadlock at Paris Saint-Germain. It’s possible he may leave the club this summer and move for free to another club under the Bosman Ruling.

Under the logic used in the BBC article, Mbappé costs “nothing” for his new club. That is clearly inaccurate both in reality and from an FFP and PSR perspective. Mbappé receives an estimated annual salary of £46.2m. He would be a costly – if potent – addition to a Premier League team, even if he is signed as a free agent.

Amortisation

Fans have become more aware in recent years of the concept of amortisation in football. There have been headlines drawing attention to this due to some of Chelsea’s transfers.

When a club pays £82m for a player, as for example Man Utd did with Antony in the summer of 2022, how much is he worth? Logically, it must be £82m, because that’s the price the club paid for him in the market. However, when a player’s contract expires, they can transfer to a new club for no fee. To account for this, football clubs record their ownership of a player’s registration as an asset on their financial books, but they amortise that asset over the length of the contract.

Antony signed on a 5-year contract, for example, so Man Utd will actually account for his transfer cost at £16.4m per year for each of the five years.

Reading some media reports, you could believe that this use of amortisation is new. You could think it is a trick that Chelsea invented recently. In fact, this isn’t the case: it’s a perfectly normal accounting practice across all football clubs.

I first remember amortisation in the press when Newcastle sold Carl Cort to Wolves on 1st January 2004. At a press conference, reporters asked Newcastle chairman Freddie Shepherd about the club making a loss by recouping only £2.5m of the £7m fee they’d paid four years earlier. Shepherd confused many journalists in a press conference when he pointed out that Newcastle were actually making an accounting profit on the transfer.

The Actual Most Expensive Squad

Putting this information together, we can find the BBC report isn’t quite accurate.

Yes, Manchester United paid more in total transfer fees for the players in their squad than other clubs. However, in terms of the actual operating costs of the football club, they are not truly spending the most on their squad.

The UEFA European Club Finance and Investment Landscape Report highlights that Man City had both a higher balance sheet value of players that season (€562m vs. Man Utd’s €443m) and a higher player wage bill (€554m vs. Man Utd’s €381m):

As you can see, the report confirms that the most expensive squad in football last season was based in Manchester. However, it was actually Treble-winning Manchester City, not Manchester United.

What Does It Mean?

It’s not a surprise that Man City and Man Utd are among the most expensive squads ever assembled. Inflation, both in general currency and in football, is driving up the numbers involved all the time. The Premier League is currently the top league and the same UEFA report does highlight that it has a revenue advantage over all other European leagues.

I’ve highlighted here that Man City were actually the most expensive squad. However, Man Utd still have great investment in their playing staff. I think this highlights that their recent problems are not down to the level of investment, but rather how it is executed.

On a European level, Real Madrid could return to the status of biggest spenders if they do add Kylian Mbappé this summer. You would expect his salary to be in line with what he received at PSG, or in fact to increase even further.

Finance remains an important element of context for modern football. Everton fans in particular might be tired of hearing about it with their recent 10-point deduction related to the Premier League’s financial regulation. Lots of fans might wish it was discussed less. But it’s not going away and I think what we should hope for instead is for reporting which more accurately considers all of the relevant factors.