(Includes Bank of England report)

The demand for talented football players is high as they increase the team’s chances of winning titles. Successful teams make more money from broadcasting rights, merchandise and ticket sales. Clubs have to compete for the best players by offering the highest wages. If a particular club was to offer lower wages, other clubs would simply outbid them. Football is a globally popular sport, with millions of young hopefuls aiming to reach the top, but very few will be good enough to play in the best leagues and an even tinier percentage will be considered among the world’s best, able to command the biggest wages.

In addition, football is not run on the same basis as US sport. There is no salary cap and no draft system, so there is little to stop the teams with the biggest resources simply outbidding smaller teams to secure the best talent around. An example of the competitive nature of football can be found in England, where it is estimated that of the 1.5 million young players taking part in organized youth football in any given year, only 180 will ultimately make it to the Premier League as professionals. The pool of potential superstars is therefore small, yet the demand for the kind of football talent that can help a team to win trophies is insatiable. Good players not only increase a club’s chances of winning, but they can also boost the club’s profile, which in turn means that the club will be able to attract more fans and more sponsors.

Players are being paid increasingly high wages because the clubs are making more money than ever. As a result of globalisation and technological advances such as the pay TV market, football has become more popular and so more profitable. If people lost interest in football, clubs would not be able to make such high profits and the demand for players would drop and so would their wages.