Transfer spend and winning: Do big fees really correlate with success?

Not too long ago, England used to lose a lot. So much that the phenomena, and the reasons behind it, were deemed fit to adorn a book cover. Why England Lose, published in 2009, sought to answer the knotty question of why football’s founding father has not been very good at winning things on the international stage.

Beneath the headline question, authors Simon Kuper and Stefan Szymanski applied data to answer several more, including one that arguably made a greater impression on the footballing world than anything else in there.

Through assessing club finances in two periods that together spanned three decades, Kuper and Szymanski detailed a clear link between on-field performance and wages. The more a club spent on staff in a given season, the higher they were likely to finish in the table. The less they spent, the more likely they were to trouble the bottom end.

The maxim has held since. Think of the most successful clubs in world football today and, almost without exception, they’ll also be the biggest spenders on wages.

Outliers are so notable that they become newsworthy: Leicester City winning a Premier League title with the 15th-highest (or sixth-lowest) wage bill in the 2015-16 season or, more recently, Manchester United and Tottenham Hotspur hovering around the 40-point mark while spending far more than their neighbours in the table.

Wages are a good financial indicator of footballing performance but a form of expenditure that attracts much more interest has never been able to boast so strong a correlation: transfer spending.

Indeed, Kuper and Szymanski were explicit in dismissing it as a proxy for performance: “The amount that any club spends on transfer fees bears little relation to where it finishes in the league.” Where the pair found a 92 per cent correlation between average wage bills and league position over a 19-year period from 1978 to 1997, the figure was just 16 per cent for single-year transfer spending.

“The issue with transfer fees is that they reflect payments based on expected performance over the life of the contract and not in relation to any one season,” Szymanski told The Athletic by email last week. “It’s not possible to say in which season the returns on the investment might accrue — and very unlikely they would be spread equally across years.”

As a hypothetical example, a club might spend £30million ($41m) on a youngster they have no real intention of playing regularly in the first season of their contract. Instead, they’ve invested in the player’s future development and performance.

Were we to link a club’s transfer spending in that first season to their performance, we’d risk including a fee that contributed little or nothing to matters on the field. By contrast, it’s unlikely (though not impossible) that clubs would agree to pay hefty wages to players who they expect to make no contribution to the cause just yet.

If we know there’s no real correlation between single-season transfer spending and performance, does that mean there’s never a correlation between what a club spends on fees and how they perform in the league?

Szymanski suggests otherwise. “I would not say there is no information in a reported transfer fee,” he writes. “Just that it is a very noisy signal.”

New research seeks to cut through some of that noise. Aurel Nazmiu, a Senior Data Scientist at Twenty First Group (TFG), a sports intelligence firm, looked at transfer spend not in single-season isolation but across a much broader period.

The results were intriguing. Taking the Premier League first, Nazmiu found the correlation between gross transfer spending and performance in a single season was 46 per cent — moderately positive, but not especially close or predictable.

However, by extending the period from one season to three, the correlation for English clubs jumped up to 61 per cent, and was 66 per cent by the end of the fourth year.

That reflects Szymanski’s comment on payments being based across a playing contract’s life rather than one season, and Nazmiu’s research found similar uplifts across Europe’s ‘big five’ leagues.

Across all four of the other main European top tiers, transfer spending became more closely correlated with playing performance over four years, albeit the improvements were lower than the 20 per cent change seen in England. In La Liga, Ligue 1 and Serie A, correlation increased by eight per cent; in the Bundesliga, the figure was seven per cent.

What does that mean in real, on-the-pitch terms?

According to Nazmiu, it suggests “patience is rewarded more in England than elsewhere”. He highlights, too, the preference for Premier League clubs to invest in youth. “In the past five years, the Premier League has signed players aged 23.8 years old, the youngest age of signings among the big five European leagues. Naturally, younger players take longer to adapt than those with more experience.”

There are broader reasons why spending in England might not translate to swift success. According to TFG's data, the average quality of the Premier League is the highest it has ever been, something that further impacts the ability of new signings to slot in quickly and improve team performance.

What’s more, while it mightn’t feel like it at times, the Premier League enjoys greater unpredictability than Europe’s other major top tiers. TFG found the correlation between a Premier League team’s points per game in 2023-24 and 2024-25 was just 55 per cent, not particularly strong and the lowest of the ‘big five’. That unpredictability is part of why the division’s TV rights deal outstrips competitors by such a massive amount.

Based on Nazmiu’s findings, transfer spending as a corollary for success still pales in comparison to wages. TFG estimates wages account for 80-85 per cent of the variance in a team’s year-on-year points tally, a level that transfer spending doesn’t match even when the time horizon is stretched over six seasons.

(As a quick aside, it’s worth noting TFG’s recent work draws on the last 15 years, while Kuper and Szymanski’s covered the late 1970s to the late 1990s, hence the numerical differences between their findings on wage and transfer fee correlation. The boom in transfer fees since then has had an impact.)

Even so, as time goes on, it’s clear that the more a team spends, the better they can expect to be. Ultimately, even if wages are a better indicator, spending more on transfers should eventually see you rise up the table.

“While in theory the correlation could decrease,” says Nazmiu, “that would be highly unusual. It would imply that teams spending the most are consistently underperforming.” That, of course, can happen, with Manchester United probably the best example of recent times in England. “In practice, such inefficiency is typically short-lived, as it tends to trigger structural changes in ownership, recruitment or management.”

If we’ve identified a single year of transfer spend that correlates most weakly to performance in England, where is spending more likely to bring about immediate results?

Among the ‘big five’, La Liga showed the greatest immediate impact of gross transfer spending, with 71 per cent correlation when fees were considered across just a single season. That swiftly rises to 79 per cent over three seasons, where the relationship levels off.

Spending on transfers in Spain, then, produces faster results than anywhere else, but there is a caveat to that. La Liga’s transfer spending is disproportionately dominated by just three clubs: over the past 15 seasons, gross spending by Atletico Madrid, Barcelona and Real Madrid outstrips the rest of La Liga combined, by €5.7billion (£4.9bn; $6.7bn) to €4.7bn.

Removing those clubs from the equation produces a stark drop-off. Beneath Spain’s big three clubs, the link between transfer spending and performance is far weaker, with a correlation that only just creeps over 50 per cent even across a six-season time horizon.

In other words, outside of the only three clubs who can realistically win La Liga in a given season, transfer spending isn’t especially likely to improve a club’s lot, and that’s even if the club is patient and gives any expensive new signings time to bed in.

The skewing effect of the biggest spenders was evident elsewhere, though not so much as in Spain. In France, removing Paris Saint-Germain from proceedings reduced single-season correlation from 60 to 51 per cent, with the drop remaining fairly constant across each of the time periods considered.

Stripping out big spenders in the Premier League is difficult because an increasing number of clubs fall into that category. Removing the traditional ‘Big Six’ means quite literally discounting nearly a third of the division.

Reducing that to just the three biggest spenders over the period covered by TFG’s data — Chelsea, Manchester City and Manchester United — does reduce the correlation (it drops to 39 per cent in year one) but, across the six-season time horizon, it still sits at 60 per cent, against 69 per cent when those clubs are included.

Comparing on a divisional basis is all well and good, but going beyond the average can tell us about specific clubs.

Brentford have long been held up as one of the best-run clubs in England, and that checks out here too. Across the four seasons since they were promoted in 2021, TFG highlight that Brentford boast the best points earned vs money spent ratio of the 14 teams to have remained in the league across that time. With roughly £220m spent on new transfers and an average of 50 points per season, on a gross spend basis, each Premier League point has cost Brentford £1.09m.

At the other end of the scale, Chelsea’s gargantuan spending since their 2022 takeover means points have been accumulated at a cost of roughly £5m apiece over the past four years. Their spending has been so vast that the next-worst ratio is around the £3m mark, a big drop, though the identity of the team which produced it (Manchester United) likely isn’t too surprising. United have spent a lot of money in recent years, even as on-field performances have withered.

Beyond the Premier League, Nazmiu’s work also threw up a few clubs who buck the general trend. Lille, Atalanta and Eintracht Frankfurt are three who, in recent years, have generated more than they’ve spent while still managing to either maintain or improve their year-on-year points tallies.

Overall, wages remain the best financial barometer of sporting performance. That has been true for a long while and, you suspect, will remain so long into the future, short of measures that limit the disparity in club wage bills being introduced.

Transfer spending shows a weaker correlation, especially in the short term, but there’s evidence that patience pays off. The longer the time period considered, the more likely big spending clubs are to succeed on the pitch, a finding especially pronounced in England’s Premier League.

It is one worth remembering if any of this summer’s big-money signings fail to set the world alight before Christmas.

(Top photo: Chelsea's Enzo Fernandez lifting the Conference League trophy in May; by Richard Heathcote via Getty Images)