The Economics Of Football Players

August 29, 2017 in Daily Bulletin

The Economist checked in on the 2017 market for football players:

  • Manchester City, an English club, has spent €179 million on defenders – this is more than the defense budget of 47 countries.
  • Clubs and their egomaniac billionaire owners would like to spend even more, but in a bid to curb runaway inflation leagues have “financial fair play” rules which require them to limit their losses.
  • One French team paid €222 million on Neymar, a forward – over double the previous record for the price of a player.
  • He’s a good player – betting markets estimate that he single handedly boosted the chances of his team winning the Champions League from 5.5% to 9%.
  • But prize money and ticket sales from winning the trophy don’t justify a hundred-million-dollar investment.
  • Part of Neymar’s appeal is his brand. He has more Instagram followers than Nike, the supplier of kit for the team. When the time comes to renegotiate the deal, the club will have the upper hand against Nike.
  • The club is owned by Qatar’s sovereign wealth fund and the investment is a signal that the troubled country remains rich and confident.

Read more on The Economist.