Saturday, 4 July 2009

We're heading for a transfer market crash!

All the signs are there... we're heading for a sharp correction in what big clubs are prepared to pay for top talent.

That might seem an odd thing to say at a time of screaming tabloid headlines.

The world record transfer fee has been smashed twice this summer: Kaka's £56million and then £80million for Cristiano Ronaldo to both join Real Madrid obliterated the £47m which took Zizou from Juventus, also to the Bernabeu.

Carlos Tevez is off to Manchester City for over £25million.

And the action won't stop there: Bayern Munich are holding out for over £60million for their French midfield star, Franck RibĂ©ry.

It's such a huge bounty that only three clubs can afford him. Freespending Real plus Manchester United and Chelsea. But Bayern's board know: If not now, when? the time is ripe for a financial killing at the expense of the world's biggest clubs.

Ahead of a crash, every market throughout time reacts in the same way; an intense inflationary bubble followed by interminable financial heartache. The Western World's property and London's Art Market to name but two.

And the same question always seems to be asked in the months leading upto disaster: "Is the Art/Property/Transfer Market recession proof?"

And the answer is always, "Emphatically, NO!"

I'm willing to make a prediction that Cristiano Ronaldo's transfer fee will be the high bar for a decade.

Sir Alex Ferguson remarked in a recent news conference just how maddening prices have become. Aside from being an accessory to creating the new excitement, he claims he's putting the shutters up as far as buying is concerned this close-season.

In the US, it's basketball's close-season and all the talk surrounds lower wages and fees to reflect economic reality.

If revenues from TV, the Champions League, gate receipts and merchandise start falling (some of those are more volatile than others) then the transfer market, which is the most volatile confidence indicator of all - will crash and burn. It happened in 1981.

Manchester United and AC Milan sold well.

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