Saturday, May 13, 2017

Learning Dispatch - May 13th 2017 - Money and Player Value in Sports


I want to understand how we can make our learning more social. I love having conversations with friends and colleagues about new insights and learnings. So these dispatches are part of an effort to get those conversations started. 

How do you determine the value of a player in a game of sport?

Money and Player Value in Football

Simon Kuper and Stefan Szymanski published Soccernomics in 2014. The books explores some counter intuitive truths about football. There were some passages that made me think about sport leagues and how top sports teams evaluate the worth of a player and set aside money to bring the best to their club/team.

On total transfer fees in 2013
"In 2013 clubs around the world paid each other about 2.2 billion pounds in transfer fees." (Kindle Location 200)

On buying the world's top ten players
"When the club does buy, it rightly tends to focus on 'top ten' players: men who are arguably among the ten best footballers on earth, like Zlatan Ibrahimovic, David Villa, Fabregas, Alves or Neymar. These players cost a lot, but the risk of their failing is small (unless you buy them when they are getting old like Thierry Henry). Part of being one of the ten best footballers on earth is that your perform almost whatever the circumstances." (Kindle Location 874)

On the money Real Madrid spends
"Real Madrid are of course the supreme consumer of shooting stars. This is largely because the club's fans demand it. Madrid (or Newcastle, or Marseille in France) probably aren't even trying to be 'rational' in the transfer market. The club's aim is not to buy the best results for as little money as possible. When their president Florentino Perez handed over a combined total of 136 million pounds for Christiano Ronaldo and Kaka in 2009, he probably suspected he was paying more for the duo than the benefit he was likely to get in results or higher revenues. But big signings of this type (like Newcastle buying fragile MichaelOwen from Madrid for 17 million pounds) are best understood as marketing gifts to a club's fans, sponsors and the local media." (Kindle Location 436)

On Arsene Wenger's Degree in Economics
"The master of that trade today is Wenger. Arsenal's manager is one of the few people in football who can view the game from the outside. In part, this is because he has a degree in economic sciences from the University of Strasbourg. As a trained economist, he is inclined to trust data rather than the game's received wisdom. Wenger sees that in the transfer market, clubs ten to overvalue a player's past performances. That prompts them to pay fortunes - in transfer fees and salaries - for players who have passed their prime." (Kindle Location 540)