The summer transfer window creates some of the most exciting times in the world of soccer, and some of the most expensive, as players are bought, sold, and traded amongst the world’s clubs. It is a very tense time for club decision makers as they look to come out on top when the final deal is signed, both in terms of their checkbooks as well as the talent they acquired for the upcoming campaign. Club decision makers are on the phone more than they are off it during this time, talking to scouts, other clubs, managers, doctors, trainers and anyone else that they feel might lend a useful opinion on the player(s) in question. In recent years we have seen some of the most expensive player transfers in soccer history. In the summer of 2013 we saw Gareth Bale transferred from Tottenham Hotspur to Real Madrid for a cool €94 million (~$118 million), and this past summer saw one of the world’s most controversial players, Luis Suarez, transferred to Barcelona from Premier League side Liverpool for €81 million (~$101 million).
While the majority of the wheeling and dealing is done during the summer transfer window, there is also a winter transfer window that allows clubs a chance to make mid-season adjustments (for those on the European schedule). At this point in the season a club’s strengths and weaknesses are starting to come to light. Front offices will be looking to bolster those weaknesses as best they can, but as with any player transaction, they will be looking to make the best possible ROI with whomever they choose to act upon. There are never any guarantees in the world of sport, however, there are ways that key decision makers can make well educated guesses based on the information available to them, which, in today’s world is fairly significant.
As a player, it is an even more uncertain and volatile world to live in. Playing well, scoring goals, etc. may not earn you job security, depending on the club you play for. In fact, it might just do the exact opposite and create uncertainty if you attract interest from bigger clubs looking to purchase your services from your current employer – which might just be what you want as a player, looking to reach the biggest stages. A player could change homes many times throughout his or her career, sometimes even into the double digits. However, as the chart below depicts, contrary to what some may believe about the level of talent associated with a high frequency of transfers, the number of times a player switches clubs is not always indicative of their talent.
Zlatan Ibrahimovic is one of the more notable strikers in recent history, and during his career he has played for some of the most high profile clubs in world soccer, such as Barcelona, AC Milan, and Paris Saint-Germain among others. Ibra, as he is often called, has moved around quite a bit during his career (8 transfers), and as his form has stayed fairly consistent throughout, he has earned more transfer revenue for his clubs than any other player – $211.4 million to be exact, making Ibra’s average revenue generation per transfer $37.8 million. Players like Cristiano Ronaldo and Gareth Bale make the top ten simply because of the value of their latest transfers, which combined generated $117.5 million for their previous clubs, Manchester United and Tottenham Hotspur. A different way to look at the data, is to compare the average transfer revenue generated by a player with their current market value (below).
Crespo and Veron aside, both of whom are retired, all but two players are worth more than their average revenue generated per transfer historically. It isn’t exact science per se, but when you look at the two players who are not valued at or above their average transfer revenue generation, Ibra and Nicolas Anelka, we find two players who are in the later stages of their career. Typically in this situation, players are valued less than they previously had been (not by much in Ibra’s case), so it is not a surprise to see it here. Conversely, the remaining 6 players, who are in the prime of their careers, are all valued at a price more than their previous average transfer value. As a club, this is exactly the situation you want to position yourself to be in – being able to sell a player for more than you bought them.
Obviously this is not always possible, and the situation varies case by case. Sometimes a player’s value comes not in the form of transfer revenue, but in on-the-pitch performance, which can lead to many other revenue streams for the club. To be in a strong position financially with any player, clubs need to have an exit strategy. If something were to transpire with one of their players that would put a transfer at the top of the potential solutions list, they need to know what they would need to get for that player to make it worthwhile. This must be a consideration when spending money on any player – what can I get for this player down the line should I need to sell him? Ultimately there are many variables that need to be weighed and measured when clubs consider their foray into the player transfer market. All they can do is make the best of the data they have available to them, and understanding historical transfer revenue and market value of a player can be a good place to start.