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Is the Bundesliga being bullied by the Premier League’s financial power?

Bundesliga clubs continue to provide value for money in a market where England’s top teams spend ridiculously on domestic talent. What makes German sides able to sell key figures for less than English clubs will happily spend domestically?

German Tradition

In the Bundesliga it seems to happen all too often where clubs are left helpless to players refusing contract renewals.  Recent exports Ilkay Gündogan and Joel Matip are examples where German clubs lost out on finances due to contract disputes – with Matip leaving on a free and Gündogan for a mere £23 million.  It appears that even the top German clubs, even those  providing regular European football are increasingly struggling to hold on to their top players due to the pull of the finances abroad.

A key reason behind the contract trouble is the club models themselves. German clubs face various restrictions from the Bundesliga, which cap the wage expenditure. Lizenzierungsordnung, for instance, are a set of regulations aimed at controlling debt in German football.  These rules have widely been criticised for Bundesliga sides losing their best players to the finances abroad and somewhat been ineffective in restricting debt build up, but that’s beside the point. If it wasn’t for the strict regulations behind the club models,  Bundesliga sides could not only hold on their current talent but attract bigger names from abroad or at the very least sell players for sums comparable to those thrown around in the Premier League.

Clubs in England simply don’t face the regulations of Bundesliga sides and as a result, it’s a once in a blue moon event that a key Premier League player will run their contract down to its final season.  The current Broadway being manufactured regarding Alexis Sanchez and Mesut Özil’s contractual agreements exemplifies the efficiency English clubs are expected to act with in wrapping up their top players, even if they have well over 18 months are left on a player’s deal. As a consequence of premature contract renewals no player leaves a Premier League team for a bargain price, which unfortunately for German clubs can’t be said about the Bundesliga.

In Germany, the well debated 50+1 ruling, restricts commercial and foreign investment ensuring club members own the controlling stake in the club.  Although recently Hoffenheim and Leipzig have been hardly following the ruling to the letter, it’s largely effective in ensure sensible ownership.  Due to restricted investments, German club finances have remained fairly consistent; whilst English TV deals and foreign ownership has had the opposite impact.  As a result, Bundesliga sides often find themselves allowing their players to leave for foreign fields when big money is thrown their way, Heung-Min Son a good example. Just over £20 million a huge coup for Leverkusen, but spare change for Premier League challengers Spurs.

By stark contrast, the increasing amount of foreign ownership within the English game has led to the monetary value of domestic players becoming exaggerated to new extremes. No club needs to sell let alone wants to sell – a big reason clubs like Chelsea have over 30 players out on loan.  When a team’s under-performing, more often than not in the English top-tier managers look to the transfer market to solve their problem. Excluding a minority of managers, most will trust players already playing in the Premier League to be the safest option and naturally its these players who are the priciest. When you have players who have previously been purchased in panic buys for well over their market value, the next time they are acquired will have to be for a similar if not higher figure, and the vicious circle begins.

Youth Development

Having successful youth academies also works in a circular fashion.  When clubs like Mainz or Borussia Mönchengladbach receive an offer for a star player, they are more confident in letting them leave thanks to the young talent striving for first team opportunities. They don’t necessarily hold out for the highest possible offer. Giving young players a chance also means that Bundesliga sides don’t need to spend ridiculous amounts on new additions and if money is spent on a player, they’re almost guaranteed a slot in the matchday squad.

In England’s top-tier things couldn’t be more different. Managers simply don’t have the backing, or the cojones, to risk giving young players a chance. Since, by comparison, money is readily available for Premier League managers, they spend it on proven players who simply cost millions. This leads to the January window becoming a panic for under-performing clubs, with clubs like Newcastle United spending around £40 million on new additions; equivalent to the entire Bundesliga January expenditure.

Scouting Success

The scouting systems in Germany tend to be successful in finding value for money in the market and replacing the departing big names. Steals like Serge Gnabry and Marcel Tisserand, allow their respective clubs to sell players for reasonable prices. That’s not to say that Bundesliga scouting is flawless, the evidence of Ciro Immobile and Franco Di Santo clearly points to the contrary. However on the whole, it would seem that Bundesliga have a far greater hit rate and respectively lower flop rate than their Premier League counterparts. Cheap, successful additions enable Bundesliga teams to let players go even if they are receiving well under what an English side would get.

Future Change

Its fair to say that the prices German clubs pay for their players and the complications surrounding club ownership rules and contracts, only serve to cap the transfer fees Bundesliga sides can expect. However controversial, the likes of RB Leipzig may be emerging as the new generation of clubs who can address this issue; spending big on young talent and investing in large squads. It’s now a case of how much tradition Germany is willing to sacrifice in order to close the vast financial gap?

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