Value measurement, professional football player, financial valuation model, football player transfer, English Premier League, financial market, football industry, rational investor, TV rights, investment fund, cash flow, sports variables, Newcastle United FC, PSG Paris Saint-Germain, football club, databases, Covid-19
The takeover of Newcastle United FC, 19th in the English Premier League, for 350 million euros by a Saudi public investment fund illustrates the attractiveness of football as a thriving and diverse industry. Indeed, the fund's liquidity is estimated at 400 billion dollars, making Newcastle United the most prosperous club in the world, ahead of Paris Saint-Germain (via Qatar Sports Investment and its 250 billion dollars in financial assets) and Manchester City (via the Emirati fund of 30 billion dollars). This reflects the strong interest of multiple players aroused by the attractiveness of high-level football to the point of investing reckless sums through the partial or complete takeover of a football club. This is also illustrated by the investment of several billion dollars for the acquisition of the broadcasting rights for the championships.
[...] For example, during the last summer transfer window, the supply of very high-level center forwards was relatively low. This forced Manchester City to enter into negotiations with Tottenham in the hope of signing Harry Kane at an exorbitant price (around 140 million euros). Derivatives: Thanks to the Mbappe, Neymar, Cavani trio replaced by the Mbappe, Neymar, Messi trio, PSG sells more than a million shirts a year. E. The results It seems complex to model by a typical financial mathematical function as the variables are numerous. [...]
[...] Thus, the advantage of using the quantitative approach is to objectively estimate the value of a player without taking into account the non-sporting hazards (TV rights negotiated on the rise, for example). Moreover, having a wide range of precise data on the athlete's aptitudes during training or competitions would potentially be an opportunity to positively impact his progression curve. This is why precise tools for measuring sports performance are necessary. B. How to quantify sports performance What interest? Emphasize the sporting value of a player in relation to his general market value and assign a numerical value to the skills that can be incorporated into the estimate of his market value. [...]
[...] De facto, the interest would be to better measure or quantify this value in order to make it profitable in the medium term. Player capital is influenced by so many parameters that transaction amounts have been overstated or disconnected from the real economy. II. Quantitative approaches A. Why use quantitative approaches Get out of the player and football market bubble and assess their market value according to their sporting level and the ancillary or indirect income potentially generated (by-products, advertising, TV rights, etc.). [...]
[...] Position and number of goals: The number of goals is a decisive variable on the market value of a football player, regardless of his position. Thus, a defender with a high-scoring rate will have a reassessed market value. Such statistics will testify to a strong ability to exploit opportunities on set pieces (corner, free kicks) which are the two main occasions on which central defenders are technically authorized to extract themselves from their preferred area. Regularity, i.e., the ability to repeat good performances and possibly score goals: An irregular player will naturally be undervalued compared to a regular player in his performance. [...]
[...] Moreover, for the latter, a secondary market (similar to the financial markets) called "the signature bonus" comes into play. It is up to the requesting clubs to offer the free player an attractive package, with the added value of a net bonus, in the event of signing a contract. For example, Sergio Ramos, who arrived free at Paris Saint-Germain, received a 12 million euros net signing bonus. The more attractive the amount, the more likely the club is to attract the desired player. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee