Get the latest news and insights from 21st Club

High-frequency trading

As the dust settles from another chaotic transfer period, it’s important to assess how things went during the window. While it may take some time to evaluate our new signings, it is possible to evaluate our processes: the steps that led to all the bids, negotiations, and deals done.

In our own review of the window, one thing that struck us is that a number of players bought at the top end of the market had only been at their club for a single season.

Indeed, of the 20 most profitable single-season transfers in history, 10 were signed in the last 2 seasons (compared to 7 of the top 20 of the all-time most expensive deals).

season_profit

Ousmane Dembélé’s deal stands out – his one season in Germany earning Dortmund at least a €90m profit in fees – and took him above two players (Mendy and Sánchez) who were signed after impressing in European competitions last season.

This evidence points to top clubs being more reactive and less strategic in the market, in two ways:

  1. A lack of understanding of how players move to major leagues, which means despite enormous scouting resources they end up recruiting from other major leagues and teams
  2. A fear of missing out, as clubs look to sign players for big fees based on less evidence than before (i.e. based on one season, rather than two) in case their rivals swoop

This activity at the top presents an opportunity for less wealthy clubs. By understanding the transfer market and using data to identify undervalued players, there’s every chance a smart club can engineer a space as a middleman in the market, performing football’s version of high frequency trading to earn a profit as part of its transfer strategy.

Any club can have a bad window – that’s the nature of a competitive market – but there’s no reason not to get our strategy and processes right.

About Omar Chaudhuri

Omar Chaudhuri has created 82 entries.