Transfer prices and basic Economics

[Jezzard 16]

1) Why does the closer that you play to your opponents’ goal increases your price significantly? Eg, Payet, Mahrez, etc. Why is someone who can create 20 chances a season worth a lot less than someone who can tap them in? It’s possibly because there are fewer strikers on the pitch so more of a club’s budget goes per player in this area than in midfield….but why then not spend more money on players that spend more time on the pitch as midfielders can play in more positions? Another example, Redmond v McCormack….AND Redmond’s demand comes from the Premier League where clubs have just received a huge windfall; McCormack’s from relegated clubs who missed out.

2) Why is a player entering the last year of their contract’s transfer value significantly reduced? Okay I know if I can get a product for free in a few weeks, I’ll backward induct the price to pay less now. However, this assumes multiple products, or in the case of a single product, a single buyer. If we assume all else equal Redmond is a 5m better than McCormack, why do Norwich sell Redmond for 11m to Southampton? Surely someone will come along to offer 12m, then someone else 13m as they’re still getting a saving on the 16m or so.

3) Why are clubs so scared about letting players leave for free at an end of a contract they….let them leave for free with one year left on their contract. E.g. Ricky van W, Vadis. At most on wages these guys would cost us 3m for one season, and as they’ve never played at a low level it should be worth a go (and Vadis is bloody good). Had we signed McCormack for 10m, pay agents 1m, pay him 1m per year and sell him for 1m in 3 years, that would cost us over 4m per season.

4) Why wait until the end of the transfer window to sign a player? E.g. NCFC every year. i) If we do sign someone they’ve missed 10% of the season. ii) managers talk about the importance of pre-season so it takes another 10% of the season to get the player to fit into the system. iii) Why not pay a premium to get the player for a full season? And it may be not be a premium as the cost may rise as other clubs know we’re desperate, they’ll know how much money we have due to our failed bids of around 10m and the monies received for Brady. Buy first, sell later. But then… in a ‘look at me’ move Pep Guardiola freezes out perfectly good keeper Joe Hart with the with one week left in the transfer window, with the assertion that he needs a ‘ball playing’ keeper. Due to playing this out in public, he has one target with just days left in the transfer window, Bravo from direct Champions League rivals Barcelona. WIth Man City’s unlimited wealth, Barcelona can charge a lot more than 15m (and not that many Euros more)…they don’t. Maybe his age? This is one thing that clubs do generally account for well.

5) How do transfer windows fit in with freedom of labour laws? It clearly restricts changing your employer to only certain times of the year, and only allows you to work for two employers during that year. Why has this never been challenged?

Okay so most of these examples apply to Norwich as I mainly only (fortunately and unwillingly) follow the transfer travails on one club, and I think we’re very prone to the above. But it seems these themes run across football. Do successful businessmen (or businessmen from China or other recently fast growing economies who become wealthy from hey, let’s go from a terrible economic system to one slightly less terrible but there’s 1.3 billion people here so just by doing this it means we’ll get 100s of billionaires and sons of billionaires) trying to apply business rules to football when 1) it’s still a sport with a necessary hierarchy with fixed market size – 3 teams get relegated no matter how well your business performs; we can’t have 7 Champions league qualifiers. 2) there’s no product differentiation – I’ve still got to play football not and can’t take my business to the less developed rugby sector 3) there’s no market differentiation –I’ll arbitrage and send my team to compete in the Eredivisie as I can more easily qualify for the Champions League there.

It almost as though clubs act as though there‘s a set and agreed price list for every player and this is never to be adjusted to meet supply or demand.

[Buh 0]

Tl;dr

[daly 500]

[quote user="Buh"]Tl;dr[/quote]

????????

[daly 500]

[quote user="Buh"]Tl;dr[/quote]

????????

[king canary 7,577]

@daly

It stands for ''Too long, didn''t read.'' Buh is just being a knob as per usual.

Re the OP-

The key factor in most transfers is leverage- take Redmond for example.

We''re a stable but not rich club and one of our key players has only one year left on his contract, having reportedly turned down a new deal. We''re not in the position to gamble and potentially miss out on £11m when that player could leave for nothing (of whatever fee a tribuneral would set) next season. Particularly as we have other areas of the squad that need investment and that £11m could help with that.

Southampton (and any other interested club) know this and know they have the leverage. They know we want to sell as we don''t want to lose Redmond on a free and they know he isn''t likely to pen a new deal. So they can bid lower than they would if he had two years remaining as the leverage is all with them.

Re the point about selling players like VOO and Ricky- simply put there is no point wasting £3m on two players we are unlikely to play, especially if we can then use that £3m to pay new players the manager actually wants. However the selling club still has to pay the player certain bonuses that they would have been due in the contract if you sell them early so this often means the transfer fee gets written off if the buying club agrees to cover those payments to the player. There is no point in us selling VOO for £300k if we still owe him £400k of bonuses- get the buying club to cover those in part and the player to write some of them off and just wipe off the transfer fee.

[daly 500]

Interesting

[Lessingham Canary 99]

On the assumption that the op is being genuine in questions, my take is;-

1/ Players in these positions with required skills are much fewer in numbers, better the scoring ratio''s etc the higher the price.

2/ Clubs have a decision to make, run the contract down and get nothing or take a cut on the previous higher quoted value.

3/ Generally to recoup their initial investment or at least a portion of. (transfer fee, wages etc)

4/ Some negotiations take much longer than others, just because we hear of a player moving, doesn''t mean that talks have not been going on behind the scenes for weeks even months, guess some clubs are better at keeping it quiet, imo.

5/ They have contracts, to protect the club and a player, a bit like anyone else, provisions will be put into a contract.

Last paragraph, I will ignore, my head hurts now !!

[John C 0]

Saw the thread title and assumed it was today''s lecture topic from Purple. I had my A4 pad and pen to hand ready to take notes.

[Hank shoots Skyler 2,094]

@daly

It stands for ''Too long, didn''t read.'' Buh is just being a knob as per usual.

_______________________________________________________________________________________________________________________________

Shock

[lappinitup 629]

[quote user="John C"]Saw the thread title and assumed it was today''s lecture topic from Purple. I had my A4 pad and pen to hand ready to take notes.[/quote]What did you call yourself when he served you that ace?

[John C 0]

[quote user="lappinitup"][quote user="John C"]Saw the thread title and assumed it was today''s lecture topic from Purple. I had my A4 pad and pen to hand ready to take notes.[/quote]What did you call yourself when he served you that ace?[/quote]

Sorry Lappin, don''t understand what you are saying.