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Showing posts from August, 2017

Irrational Market: The problem with valuing the Neymar transfer

Irrational Market: The problem with valuing the Neymar transfer Note: I am aware that the transfer fee of £200 million was set by Barcelona as a release clause and so was not determined on the market at the time by PSG. I am also aware that the value of the release clause was set in a large part as a fee thought too high to really pay and to prohibit a move before the end of Neymar’s contract and not solely as Barcelona’s idea of the worth of Neymar. However, this article will assume largely that the estimation of £200 million as the value of Neymar’s release clause was chosen as a value of worth and not with a prohibitive element. At the time of writing, Brazilian footballer Neymar is the most expensive footballer in the world following his transfer from FC Barcelona to Paris Saint Germain for €222 million (£200 million). This fee breaks the previous record of €105 million (£89.2 million) paid for Paul Pogba by Manchester United in 2016 and as this new record is more th

Pricing Football Transfers: The market is flawed

Pricing Football Transfers: The market is flawed Football transfers have been increasing the maximum asking price possible for a footballer since the beginning of the professional era in the early part of the last century. It is not expected that transfer prices would decrease since due to inflation the price of few things have decreased from the last century to now. However, football players exist in a market that has become increasingly flush with money due to revenues from television and the cost of a football player now is far in excess of what would be expected under inflation. Football transfer fees are difficult to estimate in terms of being a good deal because there is little that is sure. Football and form is fragile and a good player in the past is not guaranteed to be so in the future. Furthermore, young players frequently fall short of expectations. A football transfer has to capture the current worth of the player, the worth of the potential of the player (w