There is nothing like an over-valued footballer
The transfer window in European football just closed. All-off season long football scribes and analysts have had a field day roasting club managers and executives alike. The reason for their unusual affection is the supposedly inflated transfer fees paid for some of the players this time round. They have questioned the financial prudence of the men in charge - in handing out sums which far exceeded the 'true market value' of these players. A statistic often referred to has been the increase in total transfer spends from around 300 million pounds last year to approximately 500 million this time round.
I have a few words of advice for the men from the media. Do your homework properly. The balance sheet of a club includes two columns – earnings and expenses. So, while you are raising the roof about the expenses, throw some light on the earnings as well. Clubs have never been richer. As football scales new heights of global popularity, revenues from television rights and sponsorship deals are going through the roof. Big clubs like Real Madrid are set to make more than 100 million pounds annually from television deals alone. Money from ticket sales has also been growing exponentially as clubs continue to hike ticket prices (taking advantage of the demand –supply mismatch caused by the burgeoning fan-bases). So, as earnings continue to grow rapidly, why worry about increasing transfer budgets.
The people in European football would also do well to follow the financial news in some other sports like Formula One, baseball, basketball and the American version of football. For those of you who gasp at the ‘inflated’ amounts paid out for footballers, read this. Baseballers Alex Rodriguez and Derek Jeter signed 10 year contracts for 252 and 189 million in 2001 (try estimating the value of their new contracts in 2011). Drivers Fernando Alonso and Kimi Raikkonen get annual payments of 40 million and 51 million respectively. Here’s a complete list of largest sports contracts. There isn’t a single footballer on the list (not even David Beckham). And Football happens to be infinitely more popular than any of these sports. Blame the men who run the game for not making enough money out of it (to pay for transfers and contracts).
Finally, I would like to know the exact valuation methods used to calculate the so-called ‘right value’ of these players. Talented footballers are an extremely rare breed. The fans, who fill the coffers of the clubs, pay to watch these ‘over valued’ players. Someone is yet to devise a method to calculate the value of rare items. Rare items are auctioned to the highest bidder. I would like to see similar criticism for every item auctioned by the likes of Sotheby’s and Christie’s. There is nothing like the inherent value of a player. His efficacy for a club is contingent on numerous factors beyond his control – the system the team plays, the other players in the team and his role in the system. A player’s failure is merely indicative of his inability to play in the role given to him and not an inability to play the game itself. Blame the manager for not giving him the right role and not for the money paid for his transfer.
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I have a few words of advice for the men from the media. Do your homework properly. The balance sheet of a club includes two columns – earnings and expenses. So, while you are raising the roof about the expenses, throw some light on the earnings as well. Clubs have never been richer. As football scales new heights of global popularity, revenues from television rights and sponsorship deals are going through the roof. Big clubs like Real Madrid are set to make more than 100 million pounds annually from television deals alone. Money from ticket sales has also been growing exponentially as clubs continue to hike ticket prices (taking advantage of the demand –supply mismatch caused by the burgeoning fan-bases). So, as earnings continue to grow rapidly, why worry about increasing transfer budgets.
The people in European football would also do well to follow the financial news in some other sports like Formula One, baseball, basketball and the American version of football. For those of you who gasp at the ‘inflated’ amounts paid out for footballers, read this. Baseballers Alex Rodriguez and Derek Jeter signed 10 year contracts for 252 and 189 million in 2001 (try estimating the value of their new contracts in 2011). Drivers Fernando Alonso and Kimi Raikkonen get annual payments of 40 million and 51 million respectively. Here’s a complete list of largest sports contracts. There isn’t a single footballer on the list (not even David Beckham). And Football happens to be infinitely more popular than any of these sports. Blame the men who run the game for not making enough money out of it (to pay for transfers and contracts).
Finally, I would like to know the exact valuation methods used to calculate the so-called ‘right value’ of these players. Talented footballers are an extremely rare breed. The fans, who fill the coffers of the clubs, pay to watch these ‘over valued’ players. Someone is yet to devise a method to calculate the value of rare items. Rare items are auctioned to the highest bidder. I would like to see similar criticism for every item auctioned by the likes of Sotheby’s and Christie’s. There is nothing like the inherent value of a player. His efficacy for a club is contingent on numerous factors beyond his control – the system the team plays, the other players in the team and his role in the system. A player’s failure is merely indicative of his inability to play in the role given to him and not an inability to play the game itself. Blame the manager for not giving him the right role and not for the money paid for his transfer.
1 comment:
This is an interesting insight... But I did hear that many of the smaller clubs in the English premier league have huge amounts of debts and have taken huge gambles... though I must admit it's been quite a while since I've watched the football scene. I agree with you that they are not overpaid and the managements have to take responsibility for the demand-supply mismatch. Not a single footballer in the top sports contract list is quite a revelation.
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