On a slow news day, I figured I would go over some financial numbers from the last few years to see if I could get a gauge on how much we will or won’t spend for the remainder of the window. I hope you find it interesting!
The first thing I did was look at the net spend of the last five years. Obviously, net spend is how much we’ve spent in transfers minus the amount of money we have gained from transfers. It is a simple way of understanding what a club is willing or able to do in terms of transfer turnover.
In Euros, we are a positive 16.5m in spending so far this campaign. By itself, that would suggest that we have about that much to spend on our remaining needs (hello CB!). But it’s not quite that simple. Transfer fees usually get spread over several years and so money we are spending now is related to money we earned on sales from two or three years ago, and vice versa.
Going back to 2016/2017, we have spent 248.75m on transfers. Our sales in that time total to 289.15m. Basically, over a relevantly long period of time we have earned more on transfers than we have spent.
Wages and Free Transfers
Individual wage data for Villarreal is hard to find reliable numbers on. For instance, I can show you sites that claim Carlos Bacca makes 61k a week, I can show you another that claims he makes 118k a week. I can show you one that says Samu Chukwueze makes 500 a week (very incorrect) and one that says he makes 17k a week.
Site member JoseMariaGuti did a wonderful breakdown of club finances that you can read here. In that report, three years of the net spend we looked at above were included. They show our wages making up an average of about 64% of our revenue during that time. The limit in La Liga is 70%.
This, I believe, draws attention to one of the things missed when only net spend is analyzed. Free transfers are never free. Almost always, when a player arrives on a free transfer, his agent uses that as a piece of leverage to get his client a larger contract. Examples of this in recent years include Santi Cazorla and Dani Parejo. This same principle applies to us spending 7m on Carlos Bacca and 5m on Raul Albiol. Cheap fees allowed us to keep the players’ wages high, and those high wages eat into the money we gained from player sales.
It will probably be a while before we know the exact financial repercussions of COVID-19, though it is clear Villarreal has weathered the storm better than most teams in La Liga, but a rule reportedly passed by the league complicates the window for everyone. In June, it was claimed that La Liga clubs had been directed to not spend more than 25% of the amount they brought in from transfers. The theory goes that this would allow sales to balance the books for La Liga clubs and replace lost revenue from the 2019-2020 season.
If that is accurate, then Villarreal will likely need to sell more players before they spend any further, and that could complicate our search for further reinforcements. Of course we can spread out our any transfer fees we commit to over time, but the fees for any sales we make probably have similar factors at play.
Understanding our window so far
When Dani Parejo and Kubo in particular arrived, and we were being linked with all sorts of players, there was a prevailing notion that Villarreal was ramping up their recruitment in order to make a serious run at silverware.
I still think that the overall goal is to provide a team with better depth than we had last season, and Unai Emery’s hiring is a clear indication the club wants a trophy, but as the window drags on and we start putting what we have done so far in the context of other windows in recent years, it seems more that we are finding frugal ways to add quality pieces to an already deep team, rather than thinking we have suddenly changed how we approach the transfer market. Even the record arrival of Paco Alcacer in January ultimately falls into a larger context of moves that fit the same profile of the last few seasons.
What does this mean for the rest of the window?
We will have to see some pieces moved before we do any more permanent transfer business, for starters. We’ll absolutely need a backup keeper, I will continue to repeat that we need at least one quality CB, but getting these things done will be difficult unless we shed salary and probably gain some transfer fees.
If the La Liga spending rule in reaction to COVID 19 is a factor, one thing to potentially keep an eye on are loan with an obligation to buy situations. This would allow us to work around the ruling for this year and begin the payment of fees next season, when things are hopefully back to ‘normal’.