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Mad money

Mad money
Horse trading, in its strict literal sense, refers to the buying and selling of horses. Once upon a time traders gathered at fairs and sold and brought horses in the dozens. Due to the difficulties in evaluating the merits of a horse offered for sale, the sale of horses offered great opportunities for dishonesty, leading to use of the term horse trading  to refer to complex bargaining or other transactions. It was expected that horse sellers would capitalise on these opportunities and so those who dealt in horses gained a reputation for underhand business practices.Many first-time horse purchasers have little experience with the equine industry and are thus vulnerable to the use of deceptive and unfair practices by the more knowledgeable seller. 

There were often situations where inexperienced horse purchasers are duped into buying ill or otherwise defective horses. It would be unfair to compare football players to horses but that’s how the transfer market treats them. There are aging warhorses like Robin Van Persie who are sold for less than four million,their heydays of glory on the wane and their form patchy and there are young and rising stars like Raheem Sterling who go for ten times that price. 49 million or 490 crores. To give an idea of how huge that sum is you could buy: 10 yachts with that money, 245 million Freddos,1.4 million copies of the video game FIFA 15,362 Lamborghini Spyders or you could buy Raheem Sterling. That’s right. It’s tempting to look at the transfer – a £49 million pound fee, and conclude that everybody has won in the deal. City get a good player who might become a great one, Liverpool get a giant pile of cash, and Raheem Sterling gets the move he wanted. And that’s fair enough, up to a point.

Once upon a time 49 million got a team a legend like Zinedine Zidane, now it gets a £49 million for a winger with no end product! This in a nutshell explains the craziness of the football transfer market. How can so many managers, directors, major soccer clubs get so much wrong in the transfer market?

That is what this piece purports to explore. The Premier League is the pinnacle of world football. Nearly 15 percent of the men who played in the 2014 World Cup play professionally in the Premier League, easily more than any other league in the world. Four English teams – Arsenal, Chelsea, Manchester United and Manchester City – have World Cup players numbering in the double digits.
A study by CIES football observatory revealed the world’s most expensive players. Not surprisingly Lionel Messi reigns the roost. The transfer values are calculated using an exclusive algorithm developed on the basis of over 1,500 fee paying transfers occurred since 2009. The variables included in our exclusive econometric model refer to player performances (matches, goals, dribbles, etc.), their characteristics (age, position, contract duration, etc.), as well as competition level and results achieved by their teams (clubs and national sides). Despite these complex calculations clubs get things wrong.

The topic of footballing flops is a subjective one. Fans of a club rarely like admitting their team has bought a lemon or sold their best player. Liverpool fans have still not got over the fact that they sold Luis Suarez, for he was the player who helped them in their ascent to the top last to last season. Owners and managers like it even less. There have been so many terrible transfers over the past decades, that odds are that the club you support has seen its share of transfer flops.  In most cases, these flops failed to live up to past performances or expectations placed upon them. A ace poacher striker who stopped scoring goals, a player who had an amazing World Cup only to follow it up with mediocrity and lethargy, trapped in stardust a la Wayne Bridge , a player who dominated one league only to vanish when transferred to another.

Liverpool found out the hard and expensive way that a player’s performance at one club doesn’t necessarily carry over to a new club. Andy Carroll was purchased in January 2011 following the departure of striker Fernando Torres. The Reds had $80 million from the sale of Torres and sought to find a replacement immediately. They bought Andy Carroll from Newcastle for $57.4 million. The big English striker had 11 goals in 20 appearances for Newcastle in the 2010/11 season. Over the next two-and-a-half seasons with Liverpool, he only managed 11 goals in 58 appearances. In 2013, Carroll made a permanent move to West Ham United for a fee of around $24 million.

But as the Premier League’s big boys prepare to splash the cash, they do so with a level of consideration that simply did not exist five years ago. UEFA’s Financial Fair Play era is well under way and the regulations are forcing clubs to make decisions that heavily condition their approach to the transfer market.

According to official rules,the 2015-16 season heralds the start of the next UEFA monitoring period, in which the amount clubs can acceptably have lost over the previous three years (provided the ownership is capable of covering the cost) falls from 45 million euros to 30 million euros. This means that from the summer of 2015, clubs will have significantly less freedom to increase their spending without also growing their overall revenue from player trading, TV money, matchday income or commercial agreements. In other words only Big clubs can even think of buying the heavyweights in the market.

This has already happened in the case of Manchester United. The football club followed by the maximum number of fans in the Asian region. he seven-year shirt sponsorship deal with Chevrolet worth almost 50 million pounds per season announced in 2012, combined with a mammoth £750 million, 10-year kit deal with adidas set to start next term and a likely return to the Champions League, have put United in comfortably the strongest position to splash out again this summer as Louis van Gaal seeks to bolster a rejuvenated but unbalanced squad. With the signing of  Morgan Schneiderlin and veteran Bastian Schweinsteiger Manchester United hope to do just that.

Beyond this week’s haphazard replacement of second choice goalkeeper Petr Cech with Stoke’s Asmir Begovic and the loan of Radamel Falcao, Chelsea are yet to enter the market with the ferocity of Manchester United or Liverpool. Clearly, unlike those pretenders to Chelsea’s title, there are fewer gaps to fill and little need for either panic buys or major surgery, but more fresh talent should have been pinpointed by now. The transfer market will notice some age old cyclical trends this summer. Defenders and Goalkeepers will be brought cheap, even though rock solid defences are what win the league, as Chelsea will attest to. Strikers will be brought for exorbitant sums and as football fans like to joke Arsene Wenger will remain Arsene Wenger.

Interesting times ahead.

Major transfers so far and probable ones too

Mario Mandzukic has completed his move from Atletico Madrid to Juventus after penning a four-year deal with the Serie A champions for a transfer fee of 19 million pounds

Peter Cech has left Chelsea for Arsenal. The veteran shot stopper cost 14 million pounds

Bastian Schweinsteiger has signed up for Manchester United for a hefty 20 million pounds

Memphis Depay also moved to Old Trafford from PSV Eindhoven. Depay was persuaded by Louis Van Gaal to make the move

Roberto Firmino signed for Liverpool. The Brazilian striker will turn up at Anfield for a whopping 41 million

Liverpool have made a £32.5 million bid to trigger the release clause in Aston Villa striker Christian Benteke's contract

There's a "high chance" Paul Pogba will move to Barcelona if Joan Laporta wins the upcoming presidential election. If it happens and whenever it happens, it will be the biggest transfer in Barcelona's history

Real Madrid coach Rafael Benitez was tight-lipped on transfer target David de Gea, preferring to discuss his plans for Keylor Navas.Real are desperate to sign Madrid native De Gea following the loss of iconic goalkeeper Iker Casillas to Porto, but Manchester United are refusing to part with the Spain international unless their demands are met.

The club announced the deal for the former Porto man on Wednesday afternoon.

Top transfers

With the exception of Raheem Sterling, in the top 10 positions of the ranking are only players under contract with teams and not free agents. All figures are in Pounds:

The transfer values are calculated using an exclusive algorithm developed on the basis of over 1,500 fee paying transfers occurred since 2009. The variables included in our exclusive econometric model refer to player performances (matches, goals, dribbles, etc.), their characteristics (age, position, contract duration, etc.), as well as competition level and results achieved by their teams (clubs and national sides).

Lionel Messi (Barcelona) : 220 million €
Cristiano Ronaldo (Real Madrid) : 133 million €
Eden Hazard (Chelsea) : 99 million €
Diego Costa (Chelsea) : 84 million €
Paul Pogba (Juventus) : 92 million €
Sergio Agüero (Manchester City) : 65 million €
Raheem Sterling (Liverpool) : 53 million €
Francesc Fàbregas (Chelsea) : 62 million €
Alexis Sánchez (Arsenal) : 61 million €
Gareth Bale (Real Madrid) : 60 million €
Nikhil D Thiyyar

Nikhil D Thiyyar

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