Five factors that will shape the January football transfer window

The January transfer window is open and clubs have already been active trading players, whether they are challenging for honours or fighting relegation. January has traditionally been a more opportunistic market and the majority of players that move will be those on the periphery of their current squads who need to find opportunities to play. We also have those player’s whose contracts may be drawing to a close representing a final chance for their current club to recoup some money.

As mentioned, the winter transfer window has been more sedate than the summer months, but I’d expect that to be particularly the case this year for a number of reasons.

1. Incoming spending caps/anchoring

Perhaps most importantly, this is the last window before the new financial regulations come into effect for 2025/26, mirroring UEFA’s squad cost regulations. From next season, club spending will be capped at a percentage of their revenue, starting at 85% (for clubs not in UEFA competitions) and falling to 70% for those involved in UEFA competitions. Clubs will have an eye on these coming into force and that will have an effect for the structure of deals, with more of an emphasis on performance-related clauses and staged payments. However, this still leaves a disparity between clubs from a spending perspective.

To get around this, the Premier League has agreed a deal in principle to a hard salary spending cap known as ‘anchoring’ that limits how much a club can spend on transfers, salary and agents. This is a word I’d expect to hear much more of going forward.

2. Tighter finances

Generally, in the current environment a number of clubs are dealing with much tighter budgets. There are the Profit and Sustainability Rules (PSR) that apply to clubs now, and these restraints are compelling them to tighten their purse strings. We have already seen recent financial troubles at some clubs, and it wouldn’t be a huge surprise to see others encounter similar issues in the not-too-distant future.

3. More ‘home-grown’ players moving

Youth development expenditure is fully deductible from a football club’s calculations in the PSR framework and, as a result of more challenging financial circumstances, more clubs will need to balance ambition with compliance. In turn, I wouldn’t be surprised if we see more in the way of deals for younger, home-grown players – Marcus Rashford at Manchester United and Trent Alexander-Arnold at Liverpool, both of whom have been mooted for potential moves, are prime examples. If sold, these players represent pure profit for accounting purposes, helping to free up cash that can be spent on bringing in new players as there was no fee paid for them in the first place.

4. A more ‘creative’ approach to deals

More generally, I’d anticipate a more creative approach to deals to freshen up squads as the window progresses – for instance, an increase in the number of player swaps. That’s not something we have seen that much of in recent seasons, when cash has been more easily available. Again, this may prove to be more focussed on younger players who have relatively recently broken into the first team squad and may prove more readily tradeable, as they are not yet permanent fixtures in the starting 11.

5. Loans remaining popular

 Loans have always been a prominent feature in the January transfer window and will likely be so again this time around. We are already seeing clubs we work with dip into the market in this way. These arrangements are a classic win-win for both clubs involved – one can pick up a short-term fix, without much impact on the PSR, while the other might increase the value of their player by providing them with more experience.

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The information and opinions contained in this blog are for information only.  They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice.  Before acting on any information contained in this blog, please seek solicitor’s advice from Gilson Gray.