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Econometric Approach to Assessing the Transfer Fees and Values of Professional Football Players

Author

Listed:
  • Raffaele Poli

    (Centre International d’Etude du Sport, University of Neuchatel, 2000 Neuchatel, Switzerland)

  • Roger Besson

    (Centre International d’Etude du Sport, University of Neuchatel, 2000 Neuchatel, Switzerland)

  • Loïc Ravenel

    (Centre International d’Etude du Sport, University of Neuchatel, 2000 Neuchatel, Switzerland)

Abstract

Billions of euros are invested every year by professional football clubs for the recruitment of players. How do market actors decide prices? This paper presents an econometric model unveiling the key factors coming into play in determining fees on the transfer market for professional football (soccer) players. The statistical technique used to build the model is multiple linear regression (MLR), with fees paid by clubs as an independent variable. The sample comprises over 2000 transactions of players transferred for money from clubs in the five major European leagues during the period stretching from July 2012 to November 2021. This paper notably highlights the importance of taking into consideration the remaining duration of contracts binding players with the club to which they belong, a factor often neglected in the existing literature. It also shows that a statistical model can explain over 80% of the differences in the transfer fees paid for players. This paper reveals various applications of the approach developed for the football industry to both assess and predict football players’ transfer fees and values: transfer negotiations, club sales or purchases, bank credit, fund raising, financial planning and communication, legal disputes, etc.

Suggested Citation

  • Raffaele Poli & Roger Besson & Loïc Ravenel, 2021. "Econometric Approach to Assessing the Transfer Fees and Values of Professional Football Players," Economies, MDPI, vol. 10(1), pages 1-14, December.
    • Handle: RePEc:gam:jecomi:v:10:y:2021:i:1:p:4-:d:709536
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    References listed on IDEAS

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    1. Egon Franck & Stephan Nüesch, 2012. "Talent And/Or Popularity: What Does It Take To Be A Superstar?," Economic Inquiry, Western Economic Association International, vol. 50(1), pages 202-216, January.
    2. Bernd Frick & Franziska Prockl, 2018. "Information Precision In Online Communities: Player Valuations On Www.Transfermarkt.De," Working Papers Dissertations 37, Paderborn University, Faculty of Business Administration and Economics.
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    Cited by:

    1. Francesca Pancotto & Giorgio Addessi & Nicola Auteri, 2024. "Soccer Bubble: Is There a Speculative Bubble in the Price of International Soccer Players?," Journal of Sports Economics, , vol. 25(5), pages 535-556, June.
    2. Maxence Franceschi & Jean‐François Brocard & Florian Follert & Jean‐Jacques Gouguet, 2024. "Determinants of football players’ valuation: A systematic review," Journal of Economic Surveys, Wiley Blackwell, vol. 38(3), pages 577-600, July.
    3. Rafael Kujo Monteiro & Rodolfo Coelho Prates & Leonardo Matsuno Frota, 2023. "The determinants of player transfers in Brazil: the role of expectations in the football market," Applied Economics, Taylor & Francis Journals, vol. 55(26), pages 2964-2977, June.

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