Is exploiting the loan market a sustainable transfer strategy?

Despite there only being two defined transfer windows in the calendar year, the signing of players dominates much football discussion. Transfer gossip fills blogs, websites and newspapers all year round, and nothing excites fans quite like the prospect of a new arrival. Furthermore, in this era of rich chairmen and lucrative television deals, how much your club spends on players has become shorthand for how ambitious they are to succeed.

But signing players is a difficult business, and increasingly, a number of clubs are looking to exploit the loan market, rather than the transfer market, to compete in the Premier League.

Securing quality while minimising risk

The potential benefits of doing so are obvious. Loaning a player can avoid or significantly reduce the need for an upfront fee, or the need to pay the full salary of a player. In addition, it minimises the risk associated with committing to an investment of large sums of money in a player when the number of factors that can affect the success of a transfer – injuries, suspensions, the pressure to adapt to new team mates and tactics – are many, and often difficult to predict. Given the number of transfers that end in disappointment, the figures involved, and the pressure many Premier League clubs could find their finances under should they somehow face relegation, this is no small consideration.

The team that has most clearly deployed such an approach in the current campaign is Roberto Martinez’s Everton. This season, the Toffees boosted their ranks by bringing in Romelu Lukaku, Gareth Barry and Gerard Deulofeu from elite clubs in England and Spain.

Each have had a major impact on the team’s performance throughout the year, and have allowed Martinez to evolve Everton’s previous playing style. Gareth Barry, on loan from big-spending Manchester City, has provided experience, guile and stability in the middle of the park alongside permanent signing James McCarthy. This has provided the basis for Martinez’s expansive, pacey forward play, which has been spearheaded by the powerful, 13-goal Lukaku, on loan from Chelsea, and supported by a host of attacking wide men, of which Deulofeu, on loan from FC Barcelona, has been a key option.

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Further north, Newcastle United have also made astute use of the loan market this season, by bringing in £10 million rated Loic Remy from recently relegated QPR. Remy has provided vital goals for the Magpies throughout the season, and has for the most part, been the team’s most assured and impactful performer during an up and down campaign.

The club have tried to repeat the trick in the January window by bringing in Dutch forward Luuk de Jong on loan from Borussia Monchengladbach, although he has yet to find the net for the Geordies (this too is a benefit of the loan system – many Geordies would have preferred to see de Jong signed permanently!).

But there are downsides too…

In each case, Everton and Newcastle have exploited the loan market to secure talent that due to the profile of their clubs, financial constraints, or general risk aversion in the boardroom, they would not have otherwise been able to. Without having done so, it is overwhelmingly likely that both clubs would be in poorer positions in the league table than they currently find themselves in.

However, the question remains, is it a sustainable strategy over the longer term? In summary terms, there are three main potential downsides to such an approach:

1) The number of high quality players available for loan deals remains low: When finalising loan deals for Lukaku, Barry and Remy last summer, both Everton and Newcastle could have confidence that they were recruiting players capable of asserting themselves on a Premier League stage, and adapting to life at their new club quickly. However, it remains to be seen how many other players of such quality or potential were genuinely available for loan last summer.

Clubs at the top of the game need big squads full of talented players to cope with the rigors of competing for silverware on multiple fronts, while others will typically only contemplate shedding their most promising players when faced with irreconcilable financial pressures.

2) It makes long term planning for progression more difficult: Loan arrangements tend to last a maximum of one season, with no guarantee of becoming a full transfer, or being repeated the following year. Should a loan signing become a key part of a sides’ approach, the manager faces the prospect of having to find a replacement of equal quality during the next closed season, or going back to the tactical drawing board.

West Bromwich Albion have faced such a struggle this season, having enjoyed the presence of Romelu Lukaku last season. Victor Anichebe was signed on a permanent deal last summer, presumably to replace the physicality that Lukaku offered the side, but has paled in comparison to the Belgian, a factor which has surely contributed to Albion drifting perilously close to relegation this season.

3) Clubs play an important development role, but get no long term reward: In recent years, the most common profile of a loan signing was a promising, young player in need of regular playing time. Manchester United regulars Tom Cleverley and Danny Welbeck both made their first impressions in the Premier League away from Old Trafford, at Wigan Athletic and Sunderland respectively.

Both undoubtedly benefited from this experience, the coaching they received and experiences gained. Wigan and Sunderland invested in these players, and while each received some short term compensation in the form of performances during the time they were at the club, the real beneficiary was Sir Alex Ferguson and Manchester United.

And this does not just apply to young players. If by playing well for Newcastle, Loic Remy secures a big move to a Champions League club in England or Europe, the big winners from the deal will have been QPR, the player himself, and his new club – not the Geordies.

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Will more clubs try to exploit the loan market in the future?

Premier League clubs continue to spend huge sums of money on recruiting new players, in the form of wages and transfer fees. Since 2011,  Premier League clubs spent half a billion pounds on new strikers alone. But there can be no doubt that more clubs than ever are looking to loan deals as a means of bolstering their squads with genuine quality without being tied in to a long term funding arrangement that the club may not be able to afford in years to come.

Everton, now on the verge of securing Champions League football, are the best current example of the benefits that such an approach can yield, but they also provide a perfect illustration of the risks involved. Should Everton fail to extend the stay of their three star loan signings, Martinez faces a major rebuilding job to ensure they remain competitive.

In some ways, this would be made easier should the Merseyside club secure a place in Europe’s top competition, but doing so will bring pressures of its own for a club that has effectively taken a shortcut to reach such lofty heights. Can Martinez really turn Everton into Champions League regulars without being able to bring in players of the quality of Barry and Lukaku on permanent deals?

That is the question that chairmen and managers across the country will be asking as they observe the Toffees’ progress. If Martinez can make that transition work, we may yet see other clubs attempting to follow suit in the years ahead.


  1. Good short-term strategy. Bad long-term strategy. Need permanent deals. Period.

  2. I think the onus is wrongly attributed to the loanee rather than the loaner. To look at is another way, and using Everton as an example, would Barry have been satisfied to not play for Man City all season? No, I don’t think he would, he would have agitated for a transfer and the sum would have been small. Would Lukaku have been satisfied with not playing for Chelsea for the last two years? I very much doubt it. The loan market gives a big advantage to the wealthy clubs who can stockpile players before testing them out at a much more realistic level, in this case the premier league. Barry is an unusual case, being a player so experienced and out of contract in the summer. But Remy mentioned above is at Newcastle to either keep him happy until QPR are promoted, or keep his transfer value high for re-sale should they fail to be.

    For Everton, had they made (and I think they’ll fail) the Champions’ League then it would be a very sustainable model, they would have benefited financially from qualifying and could then probably sign Lukaku and regardless may well sign Barry.

    For all clubs without the vast cash of the real elite I think it’s the best way to compete against those whose crumbs they feed off, or their more direct rivals.

    For the clubs with all the players (and relative to the vast majority of league clubs, Everton are one of those) it’s a great way to get players experience, get them to understand proper competitive football so they will either be more ready for the first team, or lower league or lower placed teams will have seen their wares and bid higher prices for them. For me, I would abolish the loan market, or certainly apply some sort of restrictions on it and it would benefit all but the very elite clubs as well as many players.

  3. I suspect that Everton’s biggest issue in the close season, won’t be weather they can sign adequate replacements but whether they can keep hold of Roberto Martinez. For what its worth, I fancy they’ll sign Barry and replace Lukaku and Deulofeu with other loanees or permanent signings. Let’s not forget they have Kone to return next season and Martinez will still have some of the Fellani money to spend as well as whatever he is given by Bill Kenwright.

    I feel like using the loan system takes away an element of risk for smaller (financially) clubs, for Everton to have gone out and bought Kukaku, Barry and Delofeu it would probably have been in excess of £30m (still only a couple of million more than they sold Fellani for!) and there is always the chance that they wouldn’t replicate previous form at a new club. I know you’ve highlighted this, but Everton don’t have a massive amount of money and I feel that the way they’ve gone about their business is brilliant. Once players from other clubs and countries see that they play an exciting progressive style of football I’m sure they’ll be more likely to go to Everton than they might have done previously. I think these loan players give the club they go to a massive boost, both in terms of quality, but also in terms of how the club is perceived. I don’t support a premiership club but I was shocked to see Everton had managed to secure loanees from Barcelona, Chelsea and Manchester City. I say fair play to the clubs if they can make it work for them.

    In my opinion, this article reads like it’s from a supporter of a club like Spurs or Man U who’s had their nose put out of joint by Everton doing really well and pushing their own club down the league. There are some managers who could get Messi, Ronaldo, Diego Costa, Bale and Saurez on loan and still not get into the top ten. Martinez and to a lesser extent Pardew are being cited because they’ve managed to mold a team (using a few loan signings) that play very competitive football and are probably punching above their weight. I say lets celebrate the achievement this season and if Everton do qualify for the champions league, see if they invest heavily or use more loan signings, then we’ll know if it was a short term strategy or necessity.


  1. […] Is exploiting the loan market a recipe for success? […]

  2. […] Is exploiting the loan market a recipe for success? […]

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