This is correct, and the market works that way, its hard to escape. One example is Lyon, when Aulas was president. Lyon made lots of titles domestically and great runs at CL.
He was known for being a hard negotiator and, several times, kept players against their will. He even bragged, one time, for 150 million cash on hand.
What happened is, with time, he stopped having great players, and clubs and agents gradually stopped making business with him. Not only he sold the club, but they are nearly broke (of course, other factors involved too, i just cut it to make the point).