Professional Football Clubs’ “Behaviour” in the Market for the best or most expensive football players Ignacio Urrutia ( [email_address] ) Ángel Barajas ( [email_address] ) Fernando Martín ( [email_address] ) This paper has been funded by CSBM of IESE

INTRODUCTION From the seminal article by Rottenberg (1956) to the 1990s, the literature about the transfer market was not prolific at all. In the last decade of the Twentieth Century, econometric models began to be used for estimating transfer value from variables related to the features of players, of the buying and selling club and other control variables. The works of Carmichael & Thomas (1993), Carmichael, Forrest & Simmons (1997), Speight &Thomas (1997) contributed some evidences about the transfer prices. Dobson & Gerrard (1999) built a model which was developed afterwards by Gerrard (2001). Garcia del Barrio & Pujol (2006) maintain that the transfer for the best paid players are higher because they have a brand value. Nevertheless, there are still many issues to study about the transfer market and how it works.

From the seminal article by Rottenberg (1956) to the 1990s, the literature about the transfer market was not prolific at all.

In the last decade of the Twentieth Century, econometric models began to be used for estimating transfer value from variables related to the features of players, of the buying and selling club and other control variables.

The works of Carmichael & Thomas (1993), Carmichael, Forrest & Simmons (1997), Speight &Thomas (1997) contributed some evidences about the transfer prices.

Dobson & Gerrard (1999) built a model which was developed afterwards by Gerrard (2001).

Garcia del Barrio & Pujol (2006) maintain that the transfer for the best paid players are higher because they have a brand value.

Nevertheless, there are still many issues to study about the transfer market and how it works.

INTRODUCTION (ii) Normally the researches asked some questions about the price of the players, but not in the behaviour of the team. Real Madrid bought the last year to Pepe, the price was 30M €, is this logical? In this year Real Madrid sold Robinho 42M€, is this logical?

Normally the researches asked some questions about the price of the players, but not in the behaviour of the team.

Real Madrid bought the last year to Pepe, the price was 30M €, is this logical?

In this year Real Madrid sold Robinho 42M€, is this logical?

INTRODUCTION (iii) There are several ideas that we have assumed in the case of the most expensive players: The power of the negotiation is of the seller club. Only It is possible changes the equilibrium , If the seller club has some sports problems (f.e. Zaragoza), some economics economics (Leeds) or personal problems ( Beckham).

There are several ideas that we have assumed in the case of the most expensive players:

The power of the negotiation is of the seller club.

Only It is possible changes the equilibrium ,

If the seller club has some sports problems (f.e. Zaragoza),

some economics economics (Leeds)

or personal problems ( Beckham).

The roll of the most expensive player of the team

INTRODUCTION Our objective is to know the “behaviour” of the Professional Football clubs when they buy the most expensive players.

Our objective is to know the “behaviour” of the Professional Football clubs when they buy the most expensive players.

Question Research 1.- Are there different profiles for buyer clubs? If the answer is yes, what makes the difference? Age? Number of matches with the National Team? Experience?...

1.- Are there different profiles for buyer clubs?

If the answer is yes, what makes the difference? Age? Number of matches with the National Team? Experience?...

Methodology We have analysed the transfer market from 2000 to 2007. We have worked with a database with the 278 transfers which have a transfer price of over €10 million with no geographical restrictions. We have analysed the individual transfers taking into account the involved clubs and the leagues. A descriptive analysis has been carried out in order to know the main parameters of the transfer market along the period.

We have analysed the transfer market from 2000 to 2007.

We have worked with a database with the 278 transfers which have a transfer price of over €10 million with no geographical restrictions.

We have analysed the individual transfers taking into account the involved clubs and the leagues.

A descriptive analysis has been carried out in order to know the main parameters of the transfer market along the period.

Transfers of goalkeepers 00/07 13,00 13,00 1,00 18 - 22 30,03 90,10 3,00 23 - 25 11,00 22,00 2,00 26 - 29 17,65 35,30 2,00 Over 29 Ages 19,94 139,60 7,00 International 10,50 10,50 1,00 Promising player Status 18,76 150,10 8,00 Goalkeeper Average Investment Investment No. Transfers Position

Transfers of defenders 00/07 14,82 192,70 13,00 18 - 22 15,90 317,90 20,00 23 – 25 16,31 424,00 26,00 26 – 29 13,25 26,50 2,00 Over 29 Ages 30,00 30,00 1,00 Star 15,47 788,80 51,00 International 15,76 141,80 9,00 Promising player Status 15,56 961,10 61,00 Defender Average Investment Investment No. Transfers Position

Transfers of Midfields 00/07 18,26 347,00 19,00 18 – 22 18,89 661,20 35,00 23 – 25 22,23 844,80 38,00 26 – 29 15,76 78,80 5,00 Over 29 Ages 44,72 223,60 5,00 Star 18,95 1.572,70 83,00 International 15,06 135,50 9,00 Promising player Status 19,73 1.913,80 97,00 Midfield Average Investment Investment No. Transfers Position

Transfers of Strikers 00/07 17,78 515,75 29,00 18 – 22 18,74 693,25 37,00 23 – 25 18,32 714,65 39,00 26 – 29 22,31 156,20 7,00 Over 29 Ages 28,76 258,80 9,00 Star 18,32 1556,95 85,00 International 14,67 264,10 18,00 Promising player Status 18,57 2079,85 112,00 Strikers Average Investment Investment No. Transfers Position

Maximum Price per season 35,00 51,00 25,00 37,00 35,00 45,00 35,90 55,00 Striker 36,00 27,00 38,00 26,00 32,30 22,10 73,50 60,00 Midfield 30,00 16,00 27,00 30,00 18,00 46,00 36,50 20,00 Defender 13,50 0,00 0,00 13,00 22,50 0,00 54,10 11,50 Goalkeeper 2007 2006 2005 2004 2003 2002 2001 2000 Max. Price

Price average per season 17,25 16,93 16,68 20,04 18,82 20,47 18,50 20,50 Striker 16,83 17,33 17,29 16,29 20,89 16,07 26,62 22,46 Midfield 13,53 12,43 15,50 15,92 13,38 25,20 17,79 15,63 Defender 13,50 0,00 0,00 13,00 22,50 0,00 29,80 11,00 Goalkeeper 2007 2006 2005 2004 2003 2002 2001 2000 Price average

Transfers by Nationality (00/07) 278 62 29 27 30 22 21 46 41 Total … … 3 1 - - 1 - - 1 - Uruguay 3 1 - - - 2 - - - Rumania 3 - - - 1 1 - - 1 Cameroon 3 - 1 1 1 - - - - Bulgaria 3 2 1 - - - - - - Germany 4 2 2 - - - - - - Nigeria 4 - 1 - - 1 1 - 1 Ireland 5 3 1 - 1 - - - - Ivory Coast 5 - 1 - 2 - - 1 1 Check Republic 7 2 - 1 - - - 2 2 Serbia 18 4 3 - 2 2 - 4 3 Netherlands 20 5 - 2 4 2 2 2 3 Portugal 22 3 2 4 1 1 2 5 4 Spain 23 4 2 1 2 2 3 2 7 Argentina 24 3 2 2 2 - 6 9 - Italia 30 10 3 3 3 3 1 4 3 Brazil 31 6 2 1 5 2 1 8 6 France 32 6 2 6 3 4 2 4 5 England Total 2007 2006 2005 2004 2003 2002 2001 2000 Country

. Buyer Teams Ranking during the period 2000-2007 10 Corintians 42 52 PSG 21 11 Villareal 41 54,5 Borusia Dormunt 20 12 Sevilla 40 64 Olimpique Lyon 19 12 Bolton 39 98,7 Deportivo 18 13,5 Sunderland 38 112 Atlético de Madrid 17 14 PSV Eindhoven 37 123,3 Bayern Munich 16 15 Al-Saad 36 126 Roma 15 20 Portsmouth 35 140,5 Parma 14 21 Olimpique Marsella 34 142 Arsenal 13 22,9 Blackburn Rovers 33 147,9 Newcastle 12 24 Shakhtar 32 153,6 Valencia 11 24,6 Middlesbrough 31 175,7 Tottenham 10 26 Dinamo Moscú 30 191,7 Lazio 9 26,9 Aston Villa 29 201,3 Liverpool 8 27,5 Everton 28 253,9 Milan 7 27,9 Fulham 27 313,9 Juventus 6 35,2 Zaragoza 26 351,2 Barcelona 5 36,8 Leeds 25 385,7 Inter de Milan 4 40,5 Mónaco 24 398,1 Manchester Utd. 3 44,5 West Ham 23 555,5 Real Madrid 2 45 Florencia 22 581,5 Chelsea 1 Mill. € Teams Mill. € Teams

1 0 1 0 0 0 0 0 0 Atlético de Madrid 1 0 1 0 0 0 0 0 0 Valencia 1 0 0 0 0 1 0 0 0 Arsenal 2 1 0 0 0 1 0 0 0 Bayern Munich 2 0 0 0 0 0 0 1 1 Roma 2 0 0 0 0 0 0 1 1 Lazio 2 1 1 0 0 0 0 0 0 Tottenham 2 0 0 2 0 0 0 0 0 Newcastle 3 0 0 0 0 1 1 0 1 Parma 3 1 1 0 1 0 0 0 0 Liverpool 5 0 1 1 0 0 1 2 0 Milan 7 0 0 1 1 0 1 3 1 Juventus 7 1 0 0 2 1 0 1 2 Barcelona 8 0 1 1 1 0 4 0 1 Inter 8 3 1 0 1 0 2 1 0 Manchester Utd. 12 0 2 2 2 5 0 0 1 Chelsea 14 3 1 3 2 1 1 1 2 Real Madrid Total 2007 2006 2005 2004 2003 2002 2001 2000

Ranking of clubs according the average price paid for players each year. Liverpool Chelsea Real Madrid 2007 Inter Manchester Utd. Chelsea 2006 Real Madrid Milan Chelsea 2005 Manchester Utd. Barcelona Inter 2004 Real Madrid Barcelona Arsenal 2003 Milan Manchester Utd. Real Madrid 2002 Manchester Utd. Juventus Real Madrid 2001 Roma Lazio Real Madrid 2000 3º 2º 1º Year

[1] Number of season that the player has played in the highest Division 4.6 15.2 23.5 13.90 Tottenham 7.5 29.1 25.9 13.91 Bayern Munich 4.1 15.7 24.9 14.10 Deportivo 6.0 18.9 23.4 14.50 At. Madrid 5.2 18.5 24.3 14.79 Newcastle 6.0 10.8 25.3 15.07 Valencia 5.2 20.8 23.7 15.78 Arsenal 5.3 14.7 22.5 15.94 Liverpool 7.2 24.8 25.2 19.29 Inter de Milan 4.3 21.4 23.4 20.07 Parma 7.3 31.1 25.2 20.66 Barcelona 6.8 21.1 25.1 20.76 Chelsea 6.2 21.1 24.1 22.70 Manchester Utd. 6.3 25.1 25.5 23.08 Milan 8.4 41.9 26.4 25.24 Juventus 8.0 29.3 25.5 26.92 Real Madrid Average experience [1] Average international age Average Price

PSV Eindhoven 15 126 Roma 15 Sevilla FC 14 140,5 Parma 14 FC Porto 13 142 Arsenal 13 Juventus 12 147,9 Newcastle Utd. 12 Newcastle Utd. 11 153,6 Valencia 11 Olympique Lyon 10 175,7 Tottenham 10 Valencia 9 191,7 Lazio 9 Manchester Utd. 8 201,3 Liverpool 8 Chelsea 7 253,9 AC Milan 7 Real Madrid 6 313,9 Juventus 6 Arsenal 5 351,2 FC Barcelona 5 Inter 4 385,7 Inter 4 Liverpool 3 398,1 Manchester Utd. 3 FC Barcelona 2 555,5 Real Madrid 2 AC Milan 1 581,5 Chelsea 1 UEFA CLUB COEFFICIENT RANKING 2003/2007 Mill. € Club

Findings Only 42 teams concentrate the 278 transfers of the period. The total amount of money was €5,027.60 million. 23 teams bought players for more than €10 million each in 2007 (54 transfers for €884.14 million). Teams from East Europe and Asia (Shakhtar and Al-Saad) began to buy expensive players in 2007. Almost half of the buyer teams in 2007 were included among the 15 first clubs in the UEFA Club Coefficient Ranking 2003/2007.

Only 42 teams concentrate the 278 transfers of the period. The total amount of money was €5,027.60 million.

23 teams bought players for more than €10 million each in 2007 (54 transfers for €884.14 million).

Teams from East Europe and Asia (Shakhtar and Al-Saad) began to buy expensive players in 2007.

Almost half of the buyer teams in 2007 were included among the 15 first clubs in the UEFA Club Coefficient Ranking 2003/2007.

Findings There is a higher dispersion of seller clubs: 44 clubs sold expensive players in 2007. Most of them sold only one player. The Premier League and the Spanish League represented the 42.59% and 31.48% of the transfers respectively in 2007 (in monetary terms: 42.40% and 34.95%). From the seller outlook, England, France and Spain are the main sellers but with a lower weight (20.37%; 14.81%; 12.96% respectively). Russian, German and France clubs bought the older players.

There is a higher dispersion of seller clubs: 44 clubs sold expensive players in 2007. Most of them sold only one player.

The Premier League and the Spanish League represented the 42.59% and 31.48% of the transfers respectively in 2007 (in monetary terms: 42.40% and 34.95%).

From the seller outlook, England, France and Spain are the main sellers but with a lower weight (20.37%; 14.81%; 12.96% respectively).

Russian, German and France clubs bought the older players.

Findings Price paid for a star player is statistically significant but there is no significant difference between the price paid for international and promising players. There is no statistical significant difference in price paid for the different roles. That means that the price is independent of the role of the player. There is no significant relationship between the age of the player in the moment of transfer and his role. Nevertheless, the average age of transfer for goalkeeper is the highest (26.13), followed by defenders (25.04), midfields (24.90) and strikers (24.90). Strikers are transferred with a lower number of matches played with the National Team.

Price paid for a star player is statistically significant but there is no significant difference between the price paid for international and promising players.

There is no statistical significant difference in price paid for the different roles. That means that the price is independent of the role of the player.

There is no significant relationship between the age of the player in the moment of transfer and his role. Nevertheless, the average age of transfer for goalkeeper is the highest (26.13), followed by defenders (25.04), midfields (24.90) and strikers (24.90).

Strikers are transferred with a lower number of matches played with the National Team.

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