As the world of football is well aware by now, Manchester City recently made an astronomical bid of around 100 million pounds for Kaka.
There is no doubt about the fact that it is a huge offer to say the least but the question arises as to whether the proposed transfer fee is actually that astronomical when the present transfer record is taken into account. By that, I am obviously referring to the 46 million pounds (76 million euros) that Real Madrid paid for Zinedine Zidane in 2001.
Now, 46 million and 100 million may seem worlds apart but before we jump to that conclusion, let me present some findings to show how similar the two deals are from a financial viewpoint.
Well to start off, one need not be an economist to understand that if we apply the concept of inflation, the 76 million euros paid in 2001 will surely be worth a lot more in the present scenario prevailing in the transfer market.
To illustrate how over inflated the transfer market is nowadays, let us take a look at the recently concluded deal that took David Bentley from Blackburn to Tottenham. Even though Bentley is undoubtedly a good player, no club would have paid 25 million euros for him in 2001, rather at best it would have been something in the region of 15-16 million euros.
So, what I am trying to say is that if Real Madrid wanted to sign the Zidane of 2001 now, they would be paying at least around 100 million euros for him, if not more.
Coming back to City's bid, well according to newspaper reports the transfer fee that is to be paid to AC Milan is in between 95 million - 107 million pounds (106 million - 120 million euros). So, if we take into consideration that the Zidane deal will be worth around 100 million euros today, the 106 million - 120 million euros City are willing to pay for Kaka doesn't seem that astronomical a figure, now does it?
Moreover, I would also like to point out the fact that Zidane was approaching 30 years of age when he signed for Madrid and City are perfectly entitled to pay an additional 10 million - 15 million euros for the younger Kaka.
Finally, we can conclude by saying that paying an estimated 100 million euros for a 28/29 year old Zidane is more or less the same as paying 120 million euros for 26-year-old Kaka.
[As we all know, due to the recent financial crisis the Pound Sterling has become significantly weaker compared to the Euro. As the Euro hasn't fluctuated a great deal since 2001, I based my analysis on the Euro, rather than the Pound Sterling]
NOTE: I totally agree with the fact that it is crazy to offer so much money for a football player. The whole point of this article is to prove that the amount of money involved in the Zidane deal was just as absurd, at that point in time.
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