£49 million For Raheem Sterling: Not So Expensive After All

Raheem Sterling’s transfer from Liverpool to Manchester City earlier this week caused quite a stir, not so much because of the England international’s petulant, “money grabbing” behavior, but for the £49 million City coughed up to bring the 20-year-old to The Etihad. Sterling’s price tag is a new record for an Englishman and a world record for an under-21, raising unfavorable comparisons with the likes of Neymar and, very unfairly, Zinedine Zidane. 

Whether or not you think shelling out 49 million quid for a footballer is sane, comparing Sterling’s price tag to the aforementioned Neymar and Zidane is a non-sequitur. Zizu, after all, was sold over 15 years ago and paid for in a currency that no longer exists (Italian Lira), while Neymar came from a league which, regardless of your opinion of Brazilian domestic football, rarely commands the sort of fees paid for players already established in Europe’s top tier. 

On top of all that, an “English premium” unquestionably exists for home-grown players inside the EPL. Premier League clubs are prepared to pay more for English (or British) talent on the basis that: 1. they have to fulfil the home-grown quota (8 from a squad of 25); and 2. English players are, naturally enough, considered to be a better cultural and professional fit for an English team. 

If we truly want to benchmark Sterling’s price tag, therefore, we need to compare him with other British players who have completed inter-EPL transfers for record fees, adjusting their price for inflation to determine a present-day comparison in what economists would call “real terms”. 

We’ve taken the fees paid for six former British transfer fee record holders – two Under-21 record holders, three outright holders and Raheem Sterling (both) – and ordered them in terms of today’s inflated prices. The results are a little underwhelming: 

Name	Age	Year	Nominal Fee £m	Real Fee £m
1.        Raheem Sterling	20	2015	49	49
2.        Rio Ferdinand	23	2002	29	42
3.        Andy Carroll	22	2011	35	38
4.        Wayne Rooney	19	2004	27	37
5.        Luke Shaw	19	2014	30	30
6.        Alan Shearer	26	1996	15	25

When adjusted for inflation, Raheem Sterling’s £49 million still looks expensive compared to the likes of Wayne Rooney or Alan Shearer, though not quite so out of step when seen alongside the real-terms outlay Manchester United made for a 23-year-old Rio Ferdinand back in 2004. 

The problem with looking at Premier League transfer fees through the prism of ordinary inflation, however, is that the relationship between the EPL’s price growth and that of the UK economy as a whole is about as close as Donald Trump is to any semblance of humanity. The average Premier League player’s wage, for example, has increased by more than 120% over the last decade. If we really want to gauge Sterling’s transfer fee against previous British records, we need to look at the money sloshing around in the EPL; i.e. the vast growth in cash handed over by TV companies for broadcasting rights. 

So, taking the percentage growth in the value of the three-year TV packages negotiated since 1996 and applying it to the aforementioned transfers, we get a markedly different table: 

Name	Age	Year	Nominal Fee £m	Real EPL Fee £m
1.        Alan Shearer	26	1996	15	170
2.        Wayne Rooney	19	2004	27	80
3.        Rio Ferdinand	22	2002	29	70
4.        Andy Carroll	22	2011	35	59
5.        Raheem Sterling	20	2015	49	49
6.        Luke Shaw	19	2014	30	30

In the context of the growth in Premier League TV money, Manchester City have bagged themselves a bargain. 

Of course, we’re being a tad flippant. How good or bad the value in paying £49 million for Raheem Sterling will be determined over the course of several seasons: we can’t sit here and say a 20-year-old forward who’s shown promise but hasn’t won a single God-damn thing is worth this, that or the other. 

What we can say, however, is that in the context of the growth in money within the Premier League and other British transfer fee records set since its establishment in 1992, Raheem Sterling isn’t outlandishly out-of-step with the norm. 

Which just goes to show how absurd the Premier League has become.