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Three principles for player transfers

Evaluating player value is difficult because there are a lot of unknowns. We can’t know ahead of time whether a player will adapt to a new environment, get injured, or fail to develop, so the downside risk to every transfer is significant. Equally, a player might develop into something much greater than what we expected at first – a great recent example is Luka Jović, whose value increased from €5m to €60m in the span of one season at Eintracht Frankfurt. So how can smart clubs negotiate – both figuratively and literally – this challenge?

The high uncertainty around new signings can make it very difficult to compare two players coming from very different contexts. How much should we pay for a 25 year old player who mostly sits on the bench for a Champions League team, compared to a 20 year old player who is a starter but whose team didn’t make it past the group stages of the Europa League? We’d like to propose three rules of thumb to evaluate player transfers quickly:

Team rating: Players coming from better teams will cost more. Using our World Super League rankings, we can see that there is a very strong relationship between a player’s transfer fee and his team’s WSL rating.

How can we translate this to quick rules of thumb? We can see for instance that players playing in the knockout rounds of the Europa League tend to cost 3 times as much as players playing in the group stages of the competition, and these tend to cost 3 times as much as players playing in the second division of one of the big 5 European leagues.

Age: Younger players command higher fees than older players. There are two main factors driving up the price of young players. First, many young players still haven’t reached their peak performance, so there is an expectation that they will improve in the subsequent seasons. Second, young players can still be resold for significant fees, which is less true of older players. We have found through our research that the transfer fee of a player tends to decrease by around 13% every season. This means that a player who’s five years older than another will cost only half as much.

Playing time: Starters are much more expensive than subs. Clubs obviously value players more highly if they are key parts of the team, starting every weekend, than if they are on the bench. We estimate that players in the first eleven cost around 2.5 times more than players sitting on the bench.

Using these three simple rules, we can quickly estimate a player’s value. These are three of the key principles we at 21st Club use to value player transfers from around the world. Understanding these principles can help us make faster, easier, and better decisions in the high-speed environment of the transfer window.

 

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About Luis Usier

Luis Usier has created 13 entries.