Of math and men - Dissecting football transfer valuations

Age

Another very important factor to be taken into consideration is the age of the player. However, this is not part of a linear equation, as a player in his early twenties may have an upper hand over an older colleague in terms of youth, but experience trumps youth in most cases.

Ideally, a mix of youth and experience is preferred, and the hypothetically plotted graph meets around the age of 24 and 25, where most top class talents have spent enough time polishing their skills at the top most levels and are still in control of their youthful abilities.

This also has a converse meaning, mostly with regard to players who are closer to the twilight of their careers. In crude accounting terms, depreciation has to be taken into account, and for players who are nearing the end of their contracts, smarter decisions are called for.

Robin van Persie – Good signing or bad?

Again, the Robin van Persie transfer would be a good example here; at the age of 29, a footballer is closer to burning out than being primed for a long reign at the top, and Wenger took that into account to make a killing. A player will walk away on a Bosman if he sees out his contract, and a manager who has paid a substantial amount of money for the player to begin with, would rather cash out than stay put.

Additional elements

A lot of other factors too come into play in addition to the three mentioned above, one of which is the league the player plies his trade in. An English Premier League player who is on the fringes of his squad will command a greater value than the cream of the I-League.

Also taken into account is the brand that the player has built for himself. David Beckham’s transfer to the MLS was funded by the entire league rather than only Los Angeles Galaxy, as the midfielder was seen as a valuable part of their presence across the world. He brought in an iconic stature that the MLS craves deeply, in addition to the revenue from appearances and shirt sales.

Merchandising is a huge part of the football arena today and Real Madrid reportedly broke even a year after they bought Cristiano Ronaldo, who eventually became their most profitable player.

Some of the factors are completely out of the management’s hand, like how soon the player will fit into the squad, the initial teething phase, his ability to deliver soon and whether he actually believes in the way forward laid out for the club. Carlos Tevez was quick to deliver but he was homesick soon enough and didn’t turn out to be the best investment Sir Alex Ferguson made, after he made his way to their noisy neighbours.

These factors will only come into play once the deed is done, and can only be speculated upon till the cows come home.

Even if a club is unhappy with a player, it will be extremely satisfied to see him walk away at a cut price as long as he gets off its wage bill. Similarly, a player out of a contract is a ‘free agent’ and will therefore be valued accordingly.

Transfer workarounds – for the shallow pockets

There is the choice to loan a player out, rather than sell him outright, with or without an option to buy later. Here no money may change hands, and only the wages may be divided as agreed.

There is also the option to bring in third party agreements, where a third party may invest in a player, and will benefit from the eventual sale of the player. But there are extremely strict regulations enforced on account of the varying interests of third parties, who will logically have a vested interest in the said player.

There are also performance clauses which are included in a player’s agreement, which basically translates to tracked deliverables which decide the return. ‘Pay as you Play’ is an agreed form of conduct where players are paid for their actual appearances as opposed to a set weekly wage structure.

All these workarounds are essentially to lower the bill for a club, and are used quite infrequently and as desired. A lot of rules that are necessary to govern the transfer market are in place. The sacrosanct rule in the transfer market is that no club can approach any player independently.

A club must first touch base with the parent club, and once a transfer amount has been agreed upon, only then can it negotiate personal terms. Aside from this, if they stay in line with the transfer windows, any club with the appropriate money can do as they please, and run amok among the less privileged. Just like Real Madrid.