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The Transfer Market (06/06/2015 09:51)

 Hello everyone!

 

I've not had time to write blog posts for a good while, but I thought I'd quickly share some numbers on what the transfer market is up to these days - as many of you have noticed, player value is no longer an accurate gauge for how much a player will sell for, especially for higher quality, older players. Here's a few plots illustrating what the situation is:

 

These show how much players are being sold for across different ages (x-axis) and quality ranges (line darkness). The outer 4 plots split these into the 4 different positions, and the large centre plot shows this averaged across all four positions.

Most lower-Q players sell for around value, and younger players of all Q rarely go for >150% of value (though bear in mind these prices don't include credits that may have sweetened the deal). But it's really clear that players in their early 30s - up to mid 30s for keepers - are considered far more valuable by managers than their ML price suggests. These players can sell for 2-3x the list price (even 4x for elite goalkeepers), especially those in the top class Q bracket of 94+.

One of the reasons is likely the extended retirement age for outfield players, making those in their 30s more valuable than before. Another factor is that there are fewer top players in this age bracket, since this generation arrived with ball control set to 50, and without the benefit of the new elite youth academy boost so they're on average 3-4Q behind the latest generation. The rarity of experienced, high Q performers pushes the price up a bit.

But this only goes so far as an explanation. 

Why is there such a huge price inflation for players in general, and high Q players in particular?

 


 

Well, the main reason is that the game allows transfer fees to be determined by the market (with a few restrictions), but fixes player wages very low. So richer teams can stockpile very high quality players without incurring much of a wage bill. In other words, with a large cash reserve, you end up spending very little of that maintaining your high Q squad, and have lots then to spend on players to add to it. This is what's driving the prices up, and causing the richer/rebuild teams to hugely outspend the second-tier ones. As a result, you end up with all the expensive players congregating in a few very high Q squads, and it's impossible to compete without investing several billion dollars yourself.

This is different to real life. For most football clubs, player wages are by far their biggest expenditure, not transfer fees, and are the main limiting factor preventing a rich club buying up every great player. As an example, Manchester City paid an average of £12.34m in transfer fees for each first team player over the past few seasons. Meanwhile, the average annual wage they're paying those players is £5.33m. So in other words, a player's transfer fee in real life is, on average, equivalent to something like 2-2.5 years of wages for a large, rich club.

So what is this ratio in Manager League? Well, using ml-tools to get Q, age, and trasfer fee details for the last 2 seasons - and knowing the (fixed) salary costs for a player of a given Q in ML - we can calculate the same ratio. It's 32.8 - that is, a player's transfer cost in ML is, on average, worth more than 30 seasons of their wages.  

 

In Manager League, wages are 14 times cheaper than in real life ... or transfer fees are 14 times more expensive.

 

The effect of this of course is that the rich teams don't spend very much of their budget on wages. This means that they can afford to stockpile a lot of very high Q players - and spend all their savings bringing those players in, inflating the prices.

The knock-on effect is that to reach the upper echelons of the game, managers need to stockpile a similarly huge pile of cash, to get access to those elite players. Generally, this means spending many seasons developing and selling players, until they have enough money to buy their own competitive team. And it also means very few managers can be competitive at a time, since a single team can easily afford the wages of many elite players (leaving fewer available for other teams).

 


 

How do you fix this situation? Well, a complex approach would be to model player contracts in the game. If instead of treating players as commodities, they had a choice over where to move, you would allow the market to determine wages in the same way as it determines transfer fees and the two should rebalance.

A simpler route would just be to increase wages. There are two (related) reasons why this should help:

a) It should soak up some of the excess cash that's driving transfer price inflation; redirecting it out of the player pool. Teams with many high Q players would have less spending power, but lower level teams should have more, thanks to decreasing player prices.

b) It should prevent one team from being able to afford to stockpile 15-20 superstars, since the wages would be too much. This makes more of the elite players available to other sides, meaning fewer Q96-98 teams, and more competitive Q92-95 ones. Teams spending big would still have the edge, naturally, but it might no longer be necessary to spend 10 seasons rebuilding just to compete in the top division for a few seasons.

 

 

Here's a rough suggestion. In yellow, current ML salary costs (for a season, assuming 20 players) for different qualities. Even the very top teams currently spend only $100-150m a season on wages, i.e. around half the transfer cost of a top player. Under the suggested wage structure this would increase up to four-fold for a Q96 side, but very little for a Q80 team, making it more of a challenge to retain large stockpiles of top players all at the same time. This should lead to lower transfer prices, and more balanced sides with a mix of superstars and lower Q squad players - rather than 15 identikit cardboard cutout superstars all at the same Q.

 

Anyway, just something to ponder while you're being outbid for that Q93 36-year-old midfielder...

 

 

 

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This blogger owns the team The Wonderstars. (TEAM:154471)
MKManager79 wrote:
12:06 18/07 2015
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Awesome analysis and suggestion in my opinion, but I suspect those elite teams will not like it as much ;) 

MKManager79 wrote:
12:13 18/07 2015
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My second thought is that there will be a lot of teams fighting against going bankrupt if the wages get too high.

Trần Vĩ Quangg wrote:
21:04 25/09 2019
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  Respect Bro!

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