The Strategic Thinking Behind The Transfers – Part 1

The Strategic Thinking Behind The Transfers – Part 1
June 16, 2012 Mihail Vladimirov

By Mihail Vladimirov.

Cause and effect. A pretty simple example of logic. We like to think, sometimes, that we know exactly which effects will follow which causes. That we can predict the future. It’s in our nature to wildly speculate, making informed and not-so-well informed pronouncements on what will happen.

What we often forget is that causes lead to effects which lead to causes which lead to effects. Some call this “history”. As much as we like to believe we know what the future holds, we never study history. We never analyse the past – the reasons behind what happened. History is a difficult discipline – but within it we see what exactly caused the effects we witness.

In football transfers, the effect is when a certain player has been signed. But to fully understand why – the cause – we need to understand the logic behind it. What is the player expected to do? How does he fit into the plan? What is the strategic, financial and tactical thinking behind the transfer?

Financial Value

People often mistake “cost” for “value”. The headline transfer fee for a player is rarely equivalent to his value. First, we have to consider the “wage trap”. Some forget (or choose to ignore) the fact that the cost of a transfer goes beyond a simple fee. Very often, the total wage paid over the course of a player’s contract far exceeds his transfer fee. It’s the classic Carroll-Aguero Conundrum. Both men cost £35m – but the Englishman is reportedly on £70k/week, while the Argentine earns £150k/week. In other words, over their five-year contracts, Carroll will earn a fraction under £17m creating a combined price of £52m. Aguero, on the other hand, will earn £36m – costing Manchester City £71m. This staggering difference of £19m could, in theory, buy you another very good international-quality player (if not pay his wages).

But there are other factors. Players bought in the last year of their contract tend to cost far less – sometimes half the price they would have done if in the middle of a long-term deal. Fearful of losing the player on a Bosman, clubs will often accept something rather than let them go for nothing the following summer. A good example is Ashley Young, who would probably have cost another £10m if his contract were not expiring.

It’s widely reported that Liverpool paid £22.8m for Suarez, a bargain for such a talented player. He wasn’t in his final year, but given his disciplinary issues (getting an eight-match ban for biting an opponent’s ear in an Eredivisie game), his value took a dip. Ajax were reportedly asking for £40m-£50m just before the 2010 World Cup following his breath-taking season at Ajax (scoring 49 goals in all competitions, being player of the season for both his club and in the league). Damaged goods often go for knock-down prices.

A player’s medical condition can affect things too. Injury-prone players, no matter how technically talented, struggle to raise large fees or high wages. The lack of reliability can make buying such players a risk, and it’s reflected in what clubs are willing to pay for and to him. As a good example, Bellamy came in on a free transfer from Manchester City.

These are just some of the things that can reduce a player’s value – but what about inflationary factors?

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