Hi Martin. Loved the return, and in general the analysis of this piece. I have a personal request, how does Barcelona act when it comes to paying or overpaying on premiums? And how harmful do you think overpaying is? I actually think it's very harmful, and more harmful than what many people realise because it hurts roster construction and flexibility. And even the safe gaps of resale value makes you lose needless time and doesn't work out. Thoughts?
One should not be too troubled by overpaying per se. If a player is young and talented (=strong resale potential), paying above market value is not necessarily a problem. In theory, the club is not just buying current ability; it is also buying future value. Part of that premium can later be recovered through performance, resale value, or both.
I think it becomes more concerning for clubs with fewer resources, because every premium paid reduces flexibility elsewhere in the squad.
Thanks for the reply Martin! That makes complete sense, which is why I think expensive valuations for uber-talented players Diomande are good risks irrespective of the outcome.
One more thing, how would you evaluate Gordon's signing to Barcelona (alleged tbh) of 70 million + bonuses which might take it to 80-85?
Personally, I'm not a fan of it in spite of his good fit, his talents, and the reasons you said above because of my same thoughts which are exacerbated because of Barcelona's financial issues. Also, my beliefs are mainly inspired by Seth Partnow's thoughts in his interview with Owen Phillips on the F5 substack: https://thef5.substack.com/p/shooting-the-summer-breeze-with-seth , the question about about hardballing NBA teams. Even overpaying good players (not transcendent) doesn't sit well for me, especially with a club like Barca who has to be nigh perfect with their decision makings (imo). Am I over-concerned about this?
He's entering his prime, I don't find the €70M shocking.
Having said that, it's just interesting that they won't stick with Rashford who seemed to gel well with the team. I guess United want a lot of money for a player who is 28 years of age.
It's a weird one, but would not be too concerned about it :)
Really nice analysis. It would be interesting to see without intranational transfers as I think that would help show how much big fish in small ponds distort these numbers. Would obviously heavily affect PL numbers but would like to see for Ligue 1 and how much PSG accounts for the premium
The buying club’s spending power is definitely a variable that drives the premiums up (the literature confirms it). When I do the break-down by teams, I would investigate the issue.
Hi Martin. Loved the return, and in general the analysis of this piece. I have a personal request, how does Barcelona act when it comes to paying or overpaying on premiums? And how harmful do you think overpaying is? I actually think it's very harmful, and more harmful than what many people realise because it hurts roster construction and flexibility. And even the safe gaps of resale value makes you lose needless time and doesn't work out. Thoughts?
Thank you for your comment!
I took a look and here's the overpaying figure for La Liga with Barcelona and Real Madrid overimposed (https://drive.google.com/file/d/1u4G4LUguW08UGJDSXKoLQd2MFxydd6Mo/view?usp=sharing).
One should not be too troubled by overpaying per se. If a player is young and talented (=strong resale potential), paying above market value is not necessarily a problem. In theory, the club is not just buying current ability; it is also buying future value. Part of that premium can later be recovered through performance, resale value, or both.
I think it becomes more concerning for clubs with fewer resources, because every premium paid reduces flexibility elsewhere in the squad.
Thanks for the reply Martin! That makes complete sense, which is why I think expensive valuations for uber-talented players Diomande are good risks irrespective of the outcome.
One more thing, how would you evaluate Gordon's signing to Barcelona (alleged tbh) of 70 million + bonuses which might take it to 80-85?
Personally, I'm not a fan of it in spite of his good fit, his talents, and the reasons you said above because of my same thoughts which are exacerbated because of Barcelona's financial issues. Also, my beliefs are mainly inspired by Seth Partnow's thoughts in his interview with Owen Phillips on the F5 substack: https://thef5.substack.com/p/shooting-the-summer-breeze-with-seth , the question about about hardballing NBA teams. Even overpaying good players (not transcendent) doesn't sit well for me, especially with a club like Barca who has to be nigh perfect with their decision makings (imo). Am I over-concerned about this?
He's entering his prime, I don't find the €70M shocking.
Having said that, it's just interesting that they won't stick with Rashford who seemed to gel well with the team. I guess United want a lot of money for a player who is 28 years of age.
It's a weird one, but would not be too concerned about it :)
Really nice analysis. It would be interesting to see without intranational transfers as I think that would help show how much big fish in small ponds distort these numbers. Would obviously heavily affect PL numbers but would like to see for Ligue 1 and how much PSG accounts for the premium
Here are some figures -> Premier league (https://drive.google.com/file/d/1VET5PnUF6-M6130xJ5kA4doWumoTPmFb/view?usp=sharing) and Ligue 1 (https://drive.google.com/file/d/14PkJEZbCqx_k2kk0K530ZKtkUCmjFWtl/view?usp=sharing)
The buying club’s spending power is definitely a variable that drives the premiums up (the literature confirms it). When I do the break-down by teams, I would investigate the issue.