Know Your Worth: The Value of Valuating Players


Join our Newsletter

Introduction

In episode three of this series, I focused upon the growing use of data analytics in, how agents can use this data and the prospects for a future of purely data-driven football. In this episode I will be looking at how data is also used, in increasingly complex and intricate ways, to determine the value of an individual player and client.

In 2000, a German agency founded, what is now the most complete hub for football statistics and news, Transfermarkt. It began as a forum to track and monitor players and transfer targets. It is now the first point of call for agents, scouts, players, coaches and football fans when researching and investigating players, clubs and football news or rumours.

More recently, other platforms have emerged, such as Transferforum, which now claims to have developed the most accurate ‘expected transfer value’ (xTv) system. The system creates a predictive model for a player’s transfer value using a vast array of parameters and tries to determine the value of the player in the most objective way possible. Rather than subjective opinions on the estimated worth of a player and discussions of how much they should be transferred for, these systems provide concerned parties with a useful benchmark to work around that is not based upon personal opinion. The system also increases the transparency of the football market, making this information readily available to fans across the world.

How to Determine the Value of a Player

            In football, players are essentially commodities, bought, sold and traded between clubs. They become assets at the club that purchases them and their value rises and falls the same as any other asset in business. This new way of valuating players allows the world of football and particularly interested clubs and agents to monitor the worth of any player.

            The process looks at an enormous variety of parameters in order to provide the most accurate valuation. According to the leading platforms in the valuation systems, whilst footballing ability and performance are significant contributors, there are far more specific and intricate details that influence the expected transfer value of an individual player. Below are the most important parameters that are looked out but this is far from an exhaustive list:

  1. Skill, performance and ability: Of course, this is a major factor in determining how much a player is worth to a buying club. Clubs are willing to pay large amounts for the best players on the planet!
  2. Age: Almost everyone would agree that Jack Grealish is not as good of a footballer as Cristiano Ronaldo. However, Grealish was just bought for £75million more than him. Grealish’s transfer value will be a lot higher than Ronaldo’s as he is only 26, is continuing to get better and has plenty of years left in his career if he remains uninjured. Ronaldo, on the other hand, is now 36 and may not be sold on from United until he finishes his career. Therefore, his expected transfer value will be far lower, despite his superiority in ability.
  3. Contract length: As a player nears the latter stages of their existing contract, their transfer value will decrease. This is because the selling club are less likely to demand a large transfer fee as this will risk no willing buyers coming forward and the player may leave on a free at the end of their contract instead.
  4. Selling club circumstances: The selling club may be in a position where they are financially secure and doing well so will not have any intention of selling the player unless a large sum is offered. This will increase the expected transfer value of a player. This is also the case if the player is a prized asset of the club such as with Harry Kane at Tottenham. There is also the other side of this, where a club may be performing poorly or is financially struggling. In order to raise funds to improve this situation or too have enough money to bring in another player, they are more willing to sell players and so the transfer value may be lower.
  5. Position on the pitch: It is well known that forward players are usually always valued higher than defensive players. This is because they are the most sought-after assets for a football club.
  6. Resale value: As mentioned with the Cristiano Ronaldo case, Manchester United are unlikely to be able to sell him on for a healthy fee. His resale value is minimal and therefore his original transfer value is lower.
  7. Cashflow generation and off-field value: This may be a surprising factor in assessing the value of a transfer target but it plays an increasingly significant role. When clubs bring in superstars, they are willing to pay a premium on the transfer as bringing in a player of such stature will benefit them financially off the field through attracting major sponsors and boosting shirt sales. This correlates with a boost in the player’s expected transfer value.

There are many more minute details and analytics that influence and altar a player’s expected transfer value. It is also important to consider the situation of world football when making player valuations. For example, during the COVID-19 pandemic and the aftermath, expected transfer value for every player will have lowered as football has been impacted financially.

It is important to note that whilst this aims to be a predictive valuation and considers the future of the players, it is not entirely accurate. For example, it cannot consider future injuries or drops in performances and therefore, the expectations and judgements made around age, ability and performance may not come to fruition. However, for many parties in football, this is still the most accurate and valuable data statistic for assessing players and their value.

The Benefit for Agents

            For agents, accurate player valuations are an important tool to aid them in negotiations. Forums, such as Transfermarkt, that provide information on player contracts, statistics and other pieces of information are useful, but a set figure on how much a player is worth is a crucial advantage for the agent in negotiations.

            Agents use the estimated value of their clients or target clients as a benchmark which they can negotiate around. The value is used by the agent to inform themselves of the kind of transfer fee that they can expect for their client. Knowing the expected transfer value of a client leverages the agent’s ability to either achieve a higher valued new contract with the player’s current club, or to know which clubs are suitable to pursue and the minimum transfer fee that would be expected.

            Expected transfer value allows the agents to improve in their roles as matchmakers. Knowing the worth of a player enables them to narrow down the list of potential buying clubs and match the player to a suitable customer and for the right amount of money that reflects the value of the asset.

            An agent marketing their client is able to present the value of their client to buying clubs and to prospective brand endorsements. It is important for an agent to be able to effectively market their players to negotiate the most lucrative deals for the client themselves. The data point of expected transfer value is the simplest way of unbiasedly demonstrating the worth of their client in the football world.

Conclusion

            In this blog I have shown that, through the power of data analytics, platforms are able to estimate the expected transfer value of a player with increasing accuracy. It is a meticulous process that considers a large amount of data sets that influence the value of a player.

            Providing an estimate for the expected value of an asset helps clubs, agents and other parties in their negotiations and seeking of suitable candidates. It sets a benchmark for agents that can be worked around and aids their negotiations in securing lucrative deals and transfers.

3 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *