Despite the millions at stake, logic doesn’t always prevail in football economics.
It was 1998 and the young Dutch footballer Rody Turpijn was watching his career fall apart. His club, Ajax Amsterdam, was letting him go. Turpijn had only one thing going for him: he was represented by Mino Raiola, an aggressive Dutch-Italian former pizza restaurateur who was becoming one of Europe’s biggest agents.
Raiola and Turpijn drove to a motorway hotel (the classic venue of football deals) to meet the chairman of the small club De Graafschap. Raiola kicked off by impressing the chairman with some gossip about Juventus’s Pavel Nedved. Then the chairman wrote on a piece of paper the salary he could offer Turpijn. The player was delighted: it was more than he had earned at Ajax.
But to Turpijn’s surprise, Raiola shouted: “Do you know what he earns at Ajax? This isn’t a serious offer! Come Rody, we’re not going to waste our time on this.” Raiola stood up as if to walk out, so Turpijn hesitantly stood up too. The chairman hastily persuaded them to sit down. Twenty minutes later, Raiola had negotiated a massive salary for a four-year deal. As Turpijn wrote years later in the Dutch literary magazine Hard Gras, that meeting secured his future “for just about the rest of my life”.
There’s a moral here: salaries in football aren’t always rational. In general they are: as Stefan Szymanski and I showed in our book Soccernomics, the more a club pays its players, the more matches it will win. The rule of thumb is that the club with the highest wage bill finishes top, and the club with the lowest, bottom. Averaged out over a ten-year period, wage spending explains about 90 per cent of the variation in clubs’ league positions. In short, most footballers earn what they deserve, at least measured by their contribution to winning matches. And yet economists have shown that startling irrationalities still survive in the market for players.
In England in the 1980s, the number one irrationality was racial discrimination. Put simply, a black player earned less on average than an equally good white player. No wonder, because this was an era when pundits like Emlyn Hughes explained the curious absence of black players at Liverpool and Everton by saying: “They haven’t got the bottle.” Some clubs refused to field black players because they thought they weren’t good enough, or because they thought fans wouldn’t accept it. As Szymanski shows, the clubs with more black players did better – adjusted for their level of wages – than clubs with fewer.
This discrimination disappeared by the early 1990s. Today, only black managers suffer discrimination. As of November 2015, the 92 English professional clubs employed just four black managers between them. Here are some other irrationalities that persist in football’s job market:
1. Certain positions are undervalued. Goalkeepers earn less than outfield players (according to a study by the German economist Bernd Frick), even though keepers have longer careers and make a very big contribution to results. By contrast, the highest-paid position is striker. In Italy’s Serie A between 2009 and 2014, forwards earned an average of €1.1m, midfielders €820,000 and defenders €700,000, says the new French book Sciences Sociales Football Club by Bastien Drut and Richard Duhautois. Perhaps this is simply because strikers are most likely to score and therefore end up on TV.
2. Compared with goalscoring, unseen work is undervalued. Bundesliga players who ran more kilometres than others didn’t earn more, a team of German economists led by Pamela Wicker has found. Wicker and her colleague Daniel Weimar showed, meanwhile, that running lots of kilometres increases the probability that your team will win.
One manager who does know the importance of running around is Arsenal’s Arsène Wenger. He points out that if your player runs 12km and his opposite number runs only 11, the difference will probably manifest itself in the last 15 minutes of the game, and that’s when your guy might pop up unmarked in front of goal. Indeed, in 2004 Wenger signed the unknown French teenager Mathieu Flamini from Marseille based largely on the remarkable stat that Flamini was running 14km a game.
3. Certain nationalities are overvalued. For decades the most fashionable nationality in the transfer market was Brazilian. As Alex Bellos writes in Futebol: The Brazilian Way of Life: “The phrase ‘Brazilian soccer player’ is like the phrases ‘French chef’ or ‘Tibetan monk’.
The nationality expresses an authority, an innate vocation for the job – whatever the natural ability.” A Brazilian agent who had exported very humble Brazilian players to the Faroe Islands and Iceland told Bellos: “It’s sad to say, but it is much easier selling, for example, a crap Brazilian than a brilliant Mexican. The Brazilian gets across the image of happiness, party, carnival.”
That image may not have survived Brazil’s 1-7 defeat by Germany in Belo Horizonte in 2014. Today the market’s most fashionable nationalities are probably Belgian and Costa Rican. Canny clubs will buy unfashionable nationalities – Bolivians, say, or Belarusians – at discounts.
4. Older players are overpaid, because clubs tend to be overly guided by players’ past performance. Fifa TMS (the bit of Fifa that deals with international transfers) analysed the pay of footballers who moved across borders to England, Germany, Italy, Brazil, Argentina and Portugal in 2012, and found, remarkably, that the average man earned his peak fixed salary at the ripe old age of 32 – by which time he was almost certainly past his best. Seniority is a terrible rationale for pay in football (and probably in other industries too). As any smart club knows, a player’s past performance is irrelevant. What counts is his future performance.
It’s particularly dumb to overpay older forwards. The average striker peaks by age 25, as Drut and Duhautois show – just think of Michael Owen, Robbie Fowler and Patrick Kluivert.
That’s why the £50 million that Chelsea paid Liverpool in 2011 for the nippy 26-year-old superstar Fernando Torres was a worse investment than the basic £36 million that Manchester United paid Monaco for the nippy 19-year-old unknown Anthony Martial. If Martial becomes a superstar his fee will rise to £58 million, according to Monaco. If so, he will have been worth every penny. So many footballers still aren’t. Although football clubs have become smarter, they remain a lot less rational than agents like Raiola.
Simon Kuper is an award-winning author and writes for the Financial Times