This is the TTT Research Lab page on Transfers. See the links below for various articles and papers on the subject.
Years ago I’d guessed that only 50% succeeded, but my subsequent analysis of thousands of deals in the Premier League era showed that not even half the deals proved worth the money.
The figure of 40% came from ‘TPIC’, the Transfer Price Index Coefficient I devised a couple of years ago. The Transfer Price Index’s conversion of all Premier League transfer fees to a current value (CTPP) enables comparison across the decades; after all, £7m was a record-breaking transfer fee in the mid’-90s, whereas now it’s seen as fairly average; using TPI brings it into line with current big-money deals. (For more on TPI, which I created with Graeme Riley, see here.)
If you look at the latest TPIC Top 50, more than half (54%) of the ‘best’ transfers between 1993 and 2014 had no prior experience of British and Irish football.
That means that over half of the ‘best’ buys in the past 21 years have been totally new to our game. Another two (4%) of those who had some prior experience were also foreigners (an Australian and an American, both goalkeepers), making for just 42% who represented England, Wales, Scotland, Northern Ireland and Ireland, even though players from these regions make up the majority of all signings since 1993, albeit by a small margin, at 55% to 45%. (I believe that only 35% of current Premier League players are English, but I’ve counted all ‘home’ nations, plus Ireland, as the same, as the football culture, climate and main language are largely identical. And 10-20 years ago, most transfers still centred around these nationalities.)
First of all, let me state that, beyond the tense rivalries of recent years, I harbour no grudge with Chelsea Football Club per se. Let me be clear: I am fully aware that it could just as easily have been Liverpool FC that Roman Abramovich purchased in 2003, and then, like any fan, I’d have enjoyed the decade of undoubted success that would have followed.
Back in 2003, neither Liverpool nor Chelsea were geared towards great success. Both clubs were outside the top three (4th and 5th) and well off the pace, managed by good but not exceptional bosses. Neither club was getting close to the £30m Manchester United had already spent on a single player; at the time, Chelsea and Liverpool could spend around £15m tops. That’s how much the Russian oligarch changed things.
One thing people always tell me is that Liverpool ‘won’t win the league with X manager’. Ten years ago I’d have gone along with this, as I still thought it football was all about having the right manager. But over the past decade it has been clear to me that Liverpool won’t win the league with any manager. I’ve written that before, but I’ve never had as much proof as I’ll lay out here. (And I’m always looking for better ways to explain it.)
The fact that Brendan Rodgers came close last season only raised the spectre of a 19th league title, and a 25-year wait. We got excited. But I believe that in this article I offer proof that Liverpool winning the title is far more difficult than when United ended their 26-year wait in 1993, or when Arsene Wenger ruled English football with his great Arsenal side. At the start of every season, no one should ever mention Liverpool winning the title as some kind of obvious possibility, just as no one mentions Nottingham Forest winning a third European Cup (although mainly because they never qualify for it anymore).
Duncan Castles writes on Bleacher Report about the dismal transfer record of Liverpool FC under Brendan Rodgers’ management. Part of the critic is the overly reliance on an analytic model in scouting that selected bad players or rejected good. For example, Castles points out that Liverpool rejected Sadio Mane on the ground that the model said he isn’t good enough for Premier League. Mane now plays for Southampton FC and is proving the opposite. Given that Goalimpact predicted Sadio Mane to be good enough a full year and 4 Mio. Euros before Southampton signed him, let’s check what Goalimpact tells us on the other transfers made. Here is the full roster. Rodgers’ transfers are marked yellow.
Topics: A snappier title? The beginning of the Transfer Price Index (TPI). Inflation and how it relates to football transfers. The average price of a transfer in the Premier League, using TPI. The Current Transfer Purchase Price and how it works. The top ten CTPPs. The Abramovich era and the impact on the Premier League’s competitive nature. Manchester United’s reaction to Chelsea. The problems with gross and net spend. Spending for success and the level of predictability, as well as the relationship with wage spending in the Premier League.
Topics: a review of the previous episode; Premier League compound inflation; analysing various transfer myths, including the idea that spending vast amounts of individual transfer fees guarantees success. The TPI Coeffcient and what it tells us about the best and worst signings in the Premier League era.
Topics: Competitive balance, and how the league is being squeezed; the Premier League is not the “most competitive league in the world”; breaking up the oligopoly; how much of the total spending comes from the top eight teams in the league; the lack of revenue-sharing or salary caps; the ‘Title Zone’; controlling the transfer market; wastage: how much of the value of the squad is not on the pitch at any one time?; Financial Fair Play; The Suarez Scenario… [sobering silence]; the future of The Transfer Price Index; the correlation between wages and transfers; full transparency in the transfer market.
On Saturday, Channel 4’s Economics Editor Faisal Islam tweeted:
“No one ever inflation-adjusts “record” transfer fees, do they? Sigh. #mata”.
Except, of course, we do.
In 2010 I joined forces with über-accountant and statistician Graeme Riley to create the Transfer Price Index (TPI), which converts football prices to ‘modern money’ (or what we call the Current Transfer Purchase Price) with its own inflation index. After all, standard inflation relates to the price of a loaf of bread, amongst other everyday things placed into a shopping basket. Football transfers occur outside of that economic bubble, existing within their own much bigger bubble (one that gets heartily blown, I might add, but rarely by West Ham).
Now, as we note in our 2010 book, Pay As You Play, it’s not a perfect model; any given transfer fee can be obscured by the parties involved, but we do the best we can, using reputable sources, to give a pretty good idea.
And obviously, wages are another factor which have to be taken into account; a lot of good work has been done on this in numerous studies, but ours was the first to find a connection between transfer fees and success. (Remember, if Liverpool sign no-one this winter they have still committed an additional £25m-30m to Luis Suarez over the remaining four-and-a-half years of his contract. There aren’t many clubs out of the Champion League for four consecutive seasons who can agree to pay a player £200k a week. Every club has to balance its transfer spending with its wage bill.)
With the TPI project we have showed that transfer fees, once inflated, can be used to show the correlation between spending and success. Whilst we hope to fully resurrect the TPI project at some point soon, and hopefully do another book, this is a small update relating to the questions raised this weekend.
There are two aspects on which I’d like to focus: first, the relationship between transfer spending and the Premier League television deals; and second, a rundown of the top 100 transfers in the Premier League era once adjusted for inflation.
(Note: we use the Premier League era for a number of reasons, not least the management logistics of a database that has already millions of data points; and also, the clear way in which money has played a larger part in the game since the change in 1992, ensuring an era of the Haves and the Have Nots. We appreciate that football existed prior to 1992, but that represented a rational cut-off point when working back.)
The dapper Portuguese, though unknown to most fans, is now probably football’s most powerful agent. He can earn millions in an afternoon. A defining image of this summer’s transfer market came from Monaco’s stadium: Mr Mendes, in his standard dark suit plus sunglasses, sitting with Radamel Falcão, using one of his many mobile phones to arrange the loan of the Colombian striker from Monaco to Manchester United. He also handled two of the summer’s three biggest transfers: Angel Di María’s from Real Madrid to United, and James Rodríguez’s from Monaco to Real Madrid.