Arsenal manager Arsene Wenger believes there will be a radical overhaul of the transfer market within the next year following the stratospheric spending of the close-season trading period.

Paris Saint-Germain smashed the world transfer record to sign Neymar from Barcelona for 222 million euros ($266 million), while Premier League clubs spent £1.4 billion ($1.9 billion, 1.6 billion euros).

German chancellor Angela Merkel urged the sport's authorities to curb spiralling fees earlier this month and Wenger said the intervention of such a figure proved it was time for change.

"Something will happen. It is for the first time that, politically, the German prime minister came out," he said in comments published by British newspapers on Saturday.

"I think politically something will happen in the next 12 months to regulate and limit the transfer amount.

"You have to go one of two ways -- regulate it properly or leave it completely open. But you cannot be in between.

"That is where we are at the moment. That is only to the advantage of some clubs who can deal with rules in a legal way.

"The regulation has to be stricter and clearer or open it completely: you can do what you want, provided you can guarantee you have the money to pay.

"At the moment, we are a bit in between and that does not work."

Wenger believes the high fees will increase the likelihood of players running down their contracts and then leaving clubs on free transfers.

Both Alexis Sanchez and Mesut Ozil are in the final years of their Arsenal contracts.

"With the amount of transfer levels and the expected amount of contracts the players want, you will have more and more players going into the final year of their contract," Wenger said.

"You will be in a position where you either extend for money you cannot afford or you go into the final year of their contract.

"This season there were 107 players in the Premier League who got into the final year of their contract for the first time and you will see that more. The clubs want too much for normal players.

"So what happens? The club cannot sell and doesn't extend the contract, so more and more players are going into the final year."