THE LUCRATIVE BUSINESS MODEL OF RENTING SOCCER PLAYERS
Big money has so far been spent during the 2020 summer transfer window, and some important deals are still expected before the window slams shut on October 5th.
However, for many clubs who are having to combat the impacts of the coronavirus are having to rely heavily on players from the loan system.
The loan system is far from new in the soccer world. However, in the last few years, there are a number of clubs who have managed to turn the loan system into a lucrative business model.
The loan system was developed to give a particular player the ability to temporarily play for a club, other than the one which they are currently contracted to.
Loan deals can last from a few weeks to a full season, sometimes persisting for multiple seasons at a time.
There are several reasons why a club may choose to loan out a player. Most commonly, young prospects will be loaned to a club in a lower division in order to gain valuable first-team experience. In this instance, the parent club may continue to pay the player's wages in full or in part.
The second most common reason for the loan system is that it allows a club with fewer financial resources to take on on a player without stumping up a large transfer fee. In this situation, the club will be responsible for paying a player's salary. While the player's parent club may demand a small fee.
The Loan Business
For elite European clubs, the aim has recently become more than just developing young talent, it has now become a business in on its own right. A business that is seeing continued growth year-on-year.
Italy is currently the country that is dominating this recent phenomenon. In 2020, Atalanta has over 50 players under contract, who are loaned to other teams. However, that pales in comparison to Parma Calcio, who in 2013 had 184 players plying their trade at other teams temporarily.
These Italian examples are extreme, however, it is clubs such as Chelsea who have been capitalizing on this business model.
Chelsea has become famous for the number of their academy players which they have sent out on loan over recent years.
With player values higher than ever before, Chelsea has taken the approach of purchasing promising young talent in bulk. The majority of these players will be bought for low fees with the idea of developing the player and then selling him in the future for a high fee.
A great example of this can be seen in Chelsea's purchase of English full-back Ryan Bertrand (@ryanbertrand3) from Gillingham, from $160,000. After 9 years and 7 different loans, Bertrand would be sold to Southampton for $13 million.
Over the years Chelsea fans have seen a number of high profile players being sold by the club thanks to this business model. This includes players such as Romelu Lukaku (Inter), Nathan Aké (Man City), Mohamed Salah (Liverpool), Kevin De Bruyne (Man City), and many more.
There are no current laws that prohibit clubs like Chelsea from utilizing the loan system for profit. However, the ethical question does make an appearance.
As it is depriving clubs in less fashionable leagues such as Rangers, in the case of Billy Gilmour. Rangers fans miss out on seeing a potentially great player, while the club misses out on a potential windfall of much-needed cash.
FIFA is set to introduce a new law in 2021 that will restrict the number of players aged over 22, allowed out on loan to a maximum of 8. FIFA has claimed that "This is an important step towards making transfers more moral." However, with the money that is available to teams such as Chelsea, it seems unlikely to slow the loan business down.