Transfer Values - Calculation explained
In the global transfer market, season after season, the cost of acquiring a player is going up rapidly. Many pundits and fans feel that it's completely irrational to pay upwards of 100 million euros for a single player but still, football clubs pay such enormous amount of money to sign the player they think will help them to win titles going ahead.
In the world of football, the transfer market is something that is incalculable, uncertain and unforeseeable. The inefficiencies of this market have troubled many, yet it’s the most thrilling period of the season.
If we collectively have a look at last season's transfer dealings, few names that will definitely pop up in our mind is that of Philippe Coutinho (Liverpool to Barcelona) and Kylian Mbappe(Monaco to PSG).
If we compare their individual league stats for the season 2016-17 season, Mbappe was involved in 23 goals (Goals+Assists) for his team while Coutinho was involved in 20 goals (Goals+Assists). On the other hand, Coutinho is better than Mbappe when it comes to key passes (58 to 23) and had a better pass completion rate (84% to 74%).
Now stats wise both the players are hardly different from each other still, Philippe Coutinho went for 120 million euros and Kylian Mbappe went for 145 million euros. I am sure many of you might think how these prices are decided, what does it takes to get to that transfer value number?
Some of the factors, if not all, that are taken into account while deciding the transfer value are,
a) Age of the player
Age definitely plays a vital role while deciding the price, because no club would want to pay such a huge sum to a player who has just entered the wrong side of 30 (a footballing myth) well, there are quite a few examples players who have played their best football after 30, Jamie Vardy has been enjoying success and is still relishing that form. Others include Maldini, Filippo Inzaghi, Pirlo and many more. So even with its inefficiencies, the transfer market has its rules and according to that players between 22-26 years of age are generally the big catches.
b) Strength of the League
If you are a player and you are playing in one of the Big 5 (England, Germany, Spain, Italy, and France) leagues, your efforts get recognized very easily.
For example, 2013-14 wasn't the 1st time Suarez had scored more than 30 goals in a season, he was a goal monger for the Dutch club Ajax in 2009-10, where he had scored 49 goals in 48 matches and that year he was the highest goalscorer in Europe but still it was Lionel Messi who won the Golden Shoe for 2009-10.
The strength of the league is determined by the kind of players the league has, the competitive nature of the league and the kind of following it has around the globe. For example, when Suarez performed in Premier League, scoring 31 goals in 33 matches, it was acknowledged by the Barcelona.
c) The position of the player
One of the most important criteria for deciding the transfer value is the position where the player plays whether he is a centre forward, an attacking midfielder, a defender, or a goalkeeper.
As it is widely known that centre forwards and attacking midfielders are the players that go for the highest price. Also, going by the past stats and transfer trends, you will find only 1 defender who features in the top 10 transfer deals, Virgil Van Dijk of Netherlands and Liverpool. There is no goalkeeper who features in this list; Ederson being the most expensive goalkeeper in terms of transfer fee, who features somewhere around 40th position on the list.
Other than the position the player plays, some other questions which the club tries to find answers to are, whether the player was among the top 10% players in the League?
Whether or not he comes in the top 25% of players that in the same position (CF, AM, GK, etc) around the globe? (Prozone and Opta stats help in determining this)
Higher the rank, more is the transfer value
d) Role of the Player in the team
It’s like how important was the player to his team during the season. For Liverpool, Mohamed Salah has been an indispensable member of the team. It would be fair if I say Salah is one of the reasons for Liverpool finishing 4th on the league table and qualifying for UEFA Champions League final.
e) Brand Value of the player
The Brand value plays a decisive role in deciding the transfer value. When a club signs a player apart from his on-field performances, his off-field mannerisms are also taken into consideration. The factors like
- Is he a fan favourite?
- How is his off-field behaviour?
- How quickly can we break even?
- Will our shirt sales increase if we include the player in the squad?
Now some would ask why this is important for a club, as they only need players who are good on the field. How are a player’s personal life/conduct related to the club?
Now the answer is very simple. If the players are arrogant, egotistical, big headed then it will have a negative effect on the clubs brand and brand value. Also if the player has a controversial personal life then it reflects in his transfer value. For example, Suarez’s image of a troublemaker definitely brought his transfer value down.
f) Current form
Now the factor which shoots the value of the player unexpectedly is his current form like in World Cup’s, Euro’s etc. For example, James Rodriguez before the World Cup 2014 was a rather unknown quantity, but his performance in the World Cup for the Colombian team made him an immediate success. His 6 goals in 5 matches with 2 assists helped Colombia to reach Quarter Finals. The entire planet knew about James and this increased his perceived brand value. AS Monaco made the most of it when Real Madrid came looking for the World Cup star.
g) Agents Involved
The main components of a transfer deal include the “Agents Cut”, which may fall in the range of 5 to 10 per cent of the deal price. The agent usually contacts other clubs to understand the club's interest in a player and to make sure that the deal falls through. More often than not, the agent sparks up some rumours just to increase the market value of the player, which would increase his cut in the deal.
Now, these are some of the factors which play a central role while deciding the transfer price, but still, most of these factors are subjective in nature. The world of football needs factors which can be expressed in concrete form.