The 30,000-foot view
How much is Eden Hazard worth? Real Madrid’s view is that he’s worth £90m, and it seems to be in line with the transfer market and media consensus. But why is he worth that much? The question we should be asking ourselves when signing a new player is: how much will he improve the team? Here at 21st Club, we try to measure a player’s contribution to their team in points per season. Our view is that Hazard is worth an additional 1.14 points per season as compared to Gareth Bale, who he might be effectively replacing this summer.
How do we arrive at this figure? Our Player Contribution ratings enable us to predict, for any player and any team around the world, how much more likely a team is to win if that player were starting for them. So to get to our valuation for Hazard, of about +1.14 points per season as compared to Bale, we look at how much more likely Real Madrid would be to win in each of their 38 matches over a league season. On average, they would be 1 percentage point more likely to win every match – in their home match against Espanyol, for example, their probability of winning would increase from 70% to 71%. If we multiply 1% extra win probability per match by 3 points per win and 38 matches per season, we get a total of +1.15 points per season.
A single extra point a season maybe sounds implausibly low, but a quick back-of-the-envelope calculation can help us understand why it is a sensible estimate. The average relegated team will get about 35 points in a season, while the average title winners will win about 90 points. So the gap between the best and the worst teams is roughly 55 points a season. Dividing those 55 points between 11 players, we would expect each starter for a title-winning team to be worth 5 points a season more than their relegated peers. Of course, Gareth Bale is far above the level of a relegation contender, so it makes sense that Hazard would only improve on him by about 1 point per season.
Is an extra point a season worth £90m to Real Madrid? Maybe not, but they would also recoup a large chunk of that investment by selling Gareth Bale. If they sell Bale for £60m, the net investment would actually be only £30m. Depending on the length of the contracts involved, that could last for up to 5 seasons – Hazard is two years younger than Bale, so the gap between the two might even increase over time. The net investment per season could be as low as £6m, a reasonable price to pay for an extra league point when you’re in Real Madrid’s position.
The scenario we explored above is only one among many – Hazard could get injured, Bale could stay at Madrid, and many other things could happen. Nevertheless, it is a useful framework that we should keep in mind as much as possible – when signing players, we should think about how many points per season will they bring to our team, and how much that is worth to us.
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