Market value of football players: what is important?
In recent years the transfer fees paid by football clubs for their players have sky-rocketed. In 1975, Guiseppe Savoldi was signed by Napoli for a then-world record two billion Lira (£1.2 million), becoming the first million-pound player in the world of football. 42 years later, in 2017, Paris St-Germain signed Barcelona forward Neymar for a world record 222 million Euros, or 199.80 million pounds, showing how rapidly the market value of football players has accelerateduro
Since 2013, the International Centre for Sports Studies, known as CIES, has developed a powerful econometric approach to assess the transfer value of professional footballers on a scientific basis. In this article, we will look at the different factors that influence the market value of footballers.
From Italian forward Guiseppe Savoldi’s world record fee of £1.2million in 1975 to the current world record of around 200 million pounds, what are some significant factors in determining the market value of football players?
Typically, a younger player will cost more than an older one. If the player is already closer to retirement, a football player has fewer years left to keep performing at the highest level thus depreciating their value whereas a young player is perceived to be a long term investment. Many clubs make a lot of their income by developing young players and then selling them to a bigger club for a higher amount. It isn’t an exact science as certain players, such as Jamie Vardy, flourish later in their careers but as a rule of thumb it is pretty consistent when determining the market value of football players.
If a football player still has several years remaining on their contract with his club, the transfer fee will be higher than if he only has less than a year. That is because purchasing a player is effectively buying the remainder of their contract, so the bigger that contract the more they’re worth. In other words, the market value of a football player is an estimate of the amount for which a team can sell the player’s contract to another team. The longer the contract, the higher the transfer value.
A third factor in determining the market value of a football player is his position on the field. Attacking players, and those who score a lot of goals or give a lot of assists, tend to be more expensive. It might seem unfair but strikers are worth more than defenders or goalkeepers. The primary position of the player on the field is a determining factor on the market value of the footballer. Players from different positions have different criteria for judging their market value but, in general, the higher the player’s position on the field, the more expensive he will be.
Of course, talent is the very foundation of the game and, the better the player is, the more he will be worth to a club. The 222 million Euro transfer of Brazilian player Neymar from Barcelona to Paris Saint-Germain is so high because the Brazilian international is a very skilled player. Higher-skilled players will have larger transfer fees. Research shows that players who get higher average ratings tend to have higher transfer fees.
Of course, the difficulty of the league is also pivotal in determining the market value of a football player. A player showing his skills in the Premier League, Bundesliga or Primera Division will be valued higher than when the player is not playing in one of the “big five” European leagues. If a player has already proved themself in a tougher league, their market value increases as their is less risk over the purchase.
That counts for the club selling the player but also for the club who wants to acquire the player. Bigger clubs will have to spend more on players, simply because the selling club knows that some clubs have more resources available and hence the selling club can ask more for their player. For example, if a club has qualified for the Champions League, the market value of the player will be higher. This factor concerns the club who wants to sell the player, and also the club who wants to purchase him.
Not only is the talent of the player crucial in determining the market value, but also the popularity and the “superstar status”. In other words, the market value of football players also depend on their crowd-pulling power, independent of how good they are. The image of a player outside the football pitch influences the number of jerseys sold and money earned from portrait rights. If you have a lot of Instagram followers then you are worth more.
The popularity of athletes has a commercial value and, that is important for a club. Even though players like Messi, Ronaldo or even Ibrahimovic are getting closer to retirement, their brand value is still very high as they have built up an international status during their career. Everybody knows their face and, this gives them extra munition when negotiating sponsor deals with famous commercial brands.
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