By David Butler
A few weeks back Mikey Moore was named SPL young player of the year. His loan from Tottenham ought to be deemed successful. But is he an excpetion? In a new working paper with collegues in Ireland and the UK, we consider how the loan process affects later career pay of footballers.
Loan moves are a staple of football for a long time now. Of course, the motivation for them and the loan/contract strcuture vary in type. For example, young players heading out to lower tiers to get first-team minutes or established players moving to new clubs on a trial basis. At times we see big-money flops being farmed out to revive their career. On the surface, it looks like a sensible arrangement for everyone involved, but our research suggests that for players, their may be an inter temprial cost of going on loan.
We use data for over 1,000 players in the English Premier League and Serie A between 2021 and 2025, and find that loan moves are consistently associated with lower wages. There is no evidence anywhere in the data that loans generate a later wage premium. Every type of loan, in both leagues, is either associated with a penalty or makes no difference at all.
We try to get at the idea of differnt loan motivations and find that not all loans are equal. The largest wage penalties attach to straight developmental loans, which see's young (u-21) players sent out with no purchase clause attached. Loans with a purchase clause attached to them, where the receiving club has an option to make the move permanent, carry smaller penalties. What about loans with an obligation to buy? Here we find no significant pay penalty at all. This makes sense, as these arrangements are effectively staged transfers, and the wage already reflects where the player is going rather than where they came from.
Perhaps the most intersting finding in the research is the persistent effect of prior loan spells. We find that for every additional loan a player has taken in their career, their wage is approximately 4% lower. The labour market appears to be reading into a history of repeated loaning. When a player keeps getting moved on temporarily rather than integrated or sold permanently, its seems the market takes note.
The findings do differ across leagues. In the EPL, loans of any kind carry a significant wage penalty. Italy tells a different story entirely. In Serie A, only developmental straight loans attract a pay penalty. Every other loan type is statistically indistinguishable from non-loan wages. We think this is consistent with Italy's long-established 'loan culture' where temporary moves of experienced players are routine.
A few weeks back Mikey Moore was named SPL young player of the year. His loan from Tottenham ought to be deemed successful. But is he an excpetion? In a new working paper with collegues in Ireland and the UK, we consider how the loan process affects later career pay of footballers.
Loan moves are a staple of football for a long time now. Of course, the motivation for them and the loan/contract strcuture vary in type. For example, young players heading out to lower tiers to get first-team minutes or established players moving to new clubs on a trial basis. At times we see big-money flops being farmed out to revive their career. On the surface, it looks like a sensible arrangement for everyone involved, but our research suggests that for players, their may be an inter temprial cost of going on loan.
We use data for over 1,000 players in the English Premier League and Serie A between 2021 and 2025, and find that loan moves are consistently associated with lower wages. There is no evidence anywhere in the data that loans generate a later wage premium. Every type of loan, in both leagues, is either associated with a penalty or makes no difference at all.
We try to get at the idea of differnt loan motivations and find that not all loans are equal. The largest wage penalties attach to straight developmental loans, which see's young (u-21) players sent out with no purchase clause attached. Loans with a purchase clause attached to them, where the receiving club has an option to make the move permanent, carry smaller penalties. What about loans with an obligation to buy? Here we find no significant pay penalty at all. This makes sense, as these arrangements are effectively staged transfers, and the wage already reflects where the player is going rather than where they came from.
Perhaps the most intersting finding in the research is the persistent effect of prior loan spells. We find that for every additional loan a player has taken in their career, their wage is approximately 4% lower. The labour market appears to be reading into a history of repeated loaning. When a player keeps getting moved on temporarily rather than integrated or sold permanently, its seems the market takes note.
The findings do differ across leagues. In the EPL, loans of any kind carry a significant wage penalty. Italy tells a different story entirely. In Serie A, only developmental straight loans attract a pay penalty. Every other loan type is statistically indistinguishable from non-loan wages. We think this is consistent with Italy's long-established 'loan culture' where temporary moves of experienced players are routine.
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