What Recession?

Brazilian soccer star Ronaldinho, who had been toiling for Barcelona, will be acquired by Milan AC this week for nearly $24 million in transfer fees, after which Milan will have the privilege of picking up Ronaldinho's $10 million annual salary. Professional soccer's transfer system is akin to a contract buyout, whereby the acquiring club pays a fee to the club that owns the rights to the player's services, in order to effectuate the transfer prior to the expiration of his contract. While this practice of compensating a player's previous club is not peculiar to soccer (recall the Boston Red Sox paid the Seibu Lions a $51.1 million posting fee for the right to negotiate with pitching sensation Daisuke Matsuzaka), it is a time-honored tradition in soccer, dating back over a century. In theory, this system could wreak havoc on team stability, because so long as the acquiring club is able and willing to pay the asking price, summer-time transfers could resemble a Turkish bazaar. Fortunately, the law of economics imposes a dose of self restraint, because nobody -- not even the New York Yankees -- truly has unlimited funds to spend on player acquisition and payroll.

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