Valuations

[Day]

Player valuations have been a hot topic on the forum recently with Lawrence, Ince, Hughes, came across this and thought I would share with you all.

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As an industry, one of our biggest challenges is determining value in the transfer market. Valuations are often done on gut feel, or skewed by recent deals (which in turn are often done on gut feel, and so on). We also know that having a smart starting point can have a strong impact on the final price.

The first thing to remember with valuations is that, in practice, no player has a single ‘market value’. That’s because any one player has vastly different values to different buying clubs – not to mention the fact that the seller has their own considerations to make.

Take Romelu Lukaku, who was sold to Manchester United from Everton this summer for a reported £90m including add-ons. The market conditions dictated this price, but we can imagine how different circumstances might have led to a different valuation, based on changing buyer power:

In scenario A, imagine Manchester United had given Zlatan Ibrahimovic a two-year deal in 2016, and that the Swede had performed all season without a major injury. Here, the need for Lukaku is lower, as is the upside from signing him, leading to a deflated valuation. In the absence of other buyers, perhaps Everton do not sell.

Then consider scenario B. If Manchester United’s other strikers – Anthony Martial and Marcus Rashford – had underperformed in 2016-17 and suffered injuries, the impact Lukaku could have on Manchester United’s performances – and therefore revenue – is much more significant. According to our model, Whereas Lukaku might earn United an extra 5 points a season over a fully-fit Rashford, he might earn them 7-8 over a half-fit and underperforming Rashford, as United would need to call upon other even more inexperienced options.

Finally, scenario C. Imagine three or four other Premier League teams also have a need for a top-class striker, and the supply in the market is more limited. This creates demand for elite players like Lukaku, which drives up his value – particularly when the buying clubs are rivals. This doesn’t mean his value is necessarily distorted, but it may reach a stage where his price exceeds his value to Manchester United and they end up turning down the deal.

Each of these scenarios create very different outcomes. While impossible to account for all market conditions, Acquisition offers a more nuanced approach to player valuations and helps clubs get a sense of where the market would typically be against their own valuation. Player valuations will always be some combination of art and science, but it helps to go beyond a black-and-white view and take a more considered approach.

Follow: @OmarChaudhuri

[Will Hughes Hair]

I think we need a vote on this.  Is it

1. bobbins
2. stating the bleeding obvious
3. a rational explanation of why we got pennies for Will Hughes and have never signed Ibrahimovic

[Day]

14 minutes ago, Will Hughes Hair said:

I think we need a vote on this.  Is it

1. bobbins
2. stating the bleeding obvious
3. a rational explanation of why we got pennies for Will Hughes and have never signed Ibrahimovic

Sometimes the bleeding obvious is not always obvious and a little reminder of why calmer heads are needed when it comes to valuations.

[ramsbottom]

20 minutes ago, Will Hughes Hair said:

I think we need a vote on this.  Is it

1. bobbins
2. stating the bleeding obvious
3. a rational explanation of why we got pennies for Will Hughes and have never signed Ibrahimovic

2 & 3

[JAT]

Arsene Wenger has had a lot of stick in the last 12 months but players valuation has always been his strong point. Keeping Arsenal competing in the Champions League for 10 years without masses of capital being pushed into the club from investors.

Am I right in thinking he studied economics?

[Rab a dab doo]

A player is only ever worth what the buying team is willing to pay. Simple 

[SKRam]

24 minutes ago, Rab a dab doo said:

A player is only ever worth what the buying team is willing to pay. Simple 

There's a Brazilian smirking in Paris today thinking just that 

[t'oldu]

£140   for a shirt.....................does he get a percentage of that too!!??

 

[G-Ram]

They're worth what someone is prepared to pay 

Lukaku price increased because more that one club was after him

Coutinho price will increase because Liverpool know Barca have just received £200m

clubs like monaco have been delaying mbeppe transfer waiting for naymar to go psg to increase the selling price based on what naymar has just gone for

inflated prices will filter down as selling clubs look to sign replacements 

football is dead  

[archied]

Wenger has been slated this week with regards to his letting players contracts run down and his view that they will perform far better for arsenal this year to up their value to arsenal or another club ,,,,, 

i think he is ahead of his time with his thinking in terms of transfer fess will disappear and players will move or stay at end of contracts ,,, it's the way forward / the future ,, we can't keep going up and up ontransfer fess ,bloody 200 mill for a player???? 

Problem is arsenal cannot do it unilaterally and something would have to be worked out for lower league clubs to survive but it has to come at some point