Q&A


ON THE PLAYRATINGS’ PLATFORM

 

Why are PlayRatings estimations different from others?

PlayRatings estimates:

- are based on a proprietary, econometrically based, computational algorithm

- cover most of the active professional football

- are all updated weekly

- are independent

The methodologies applied by PlayRatings to the football industry, according to the best economic practices, international accounting standards and UNIEN ISO 9001:2008 requirement, are based on the twofold principle of efficiency and fairness. They focus on objective evaluation processes, and aim to correct for the economic evaluation biases typical of the football market. These biases depend on the role of image and reputation and threaten to overcome economic fundamentals and combine with market sentiment to generate speculative phenomena.

 

What PlayRatings does estimate?

PlayRatings executes every week more than 53 economic analysis for each of the 145,000 players, 5 indicators for each of the 400 leagues and 6,000 teams, plus additional 30 aggregate economic analysis. The records cover a three years period.

Among others, these estimations include the player’s expected Market Price, his Residual Value for the club he is playing for, the Potential Value for a buyer and the player’s Rating.

 

How player’s value and market price are estimated?

All the evaluations reported on PlayRatings’ platform don’t reflect expert or other personal opinions, but are generated by a computational algorithms based on an advanced proprietary economic model.

Due to this structure, the estimates are not affected by memory gap, wishful thinking or any other bias.

In particular: Residual Value, Renewal Value and Potential Value are estimated through an economic model on the base of player’s performances and characteristics, teams and market economics, contracts and other legal terms. They don’t take into consideration the actual transfer fees payed to sell or buy a player.

Conversely, the expected Market Price forecasts are based on the same input data but consider the transfer fees in the player’s history and also the market characteristics and pricing dynamic and trends.

 

How many players are monitored by PlayRatings?

PlayRatings executes every week more than 53 economic analyses for each of the 145,000 players, 5 indicators for each of the 400 leagues and 6,000 teams, plus additional 30 aggregate economic analysis. The records considered cover a three years period.

How much information does PlayRatings manage?

Every week PlayRatings imports 47 billion input data to perform more than 8 billion estimations. Currently the data base works on more than 1.7 trillion data items covering a period of 3 years of statistics.

 

What is the update frequency?

All estimations are updated weekly and in some cases more than weekly.

 

Is PlayRatings linked to any of the football market stakeholders?

PlayRatings has been realized by OpenEconomics S.r.l., an Italian independent private-owned company bringing to the football market an advanced expertise in economic modeling.

OpenEconomics is compliant to UNIEN ISO 9001:2008 for mathematic and environmental models for the economic evaluation of investment policies, programs and projects.

 

Why PlayRatings?

PlayRatings is a project realized and owned by OpenEconomics S.r.l. In line with the recent directives from UEFA, OpenEconomics tries to give timely, concrete and rational answers to the growing needs in the football industry for efficient programming tools and regulations. These tools not only aim to improve economic and financial performance, but also to help the clubs, as well as all other companies in the sector, to achieve workable goals of self-sustainable and transparent management.

 

What is PlayRatings’ main goal?

PlayRatings’ main goals is to contribute to the wellbeing of the football industry, of the professionals and ultimately of the people who experience football as a passion.

To this aim, the methodologies that OpenEconomics applies to the study of the football industry, according to the best economic practices and international accounting standards, are based on the twofold principle of efficiency and fairness.

They focus on objective evaluation processes, and aim to correct for the economic evaluation biases typical of the football market. These biases depend on the role of image and reputation and threaten to overcome economic fundamentals and combine with market sentiment to generate speculative phenomena.

What methodologies are used in the economic evaluations?

PlayRatings uses a proprietary economic model realized by OpenEconomics S.r.l. The economic model represents the football company as a miniature economic system in a dynamic economic equilibrium, and builds estimates by applying the principles of the Human Capital theory, the Real Options theory and risk analysis, as well as using advanced statistics, econometrics and economic tools.

 

What is the business model of PlayRatings?

PlayRatings’ revenues are generated by advertising and by providing economic analysis to media, broadcasters, financial institutions, football clubs, agencies and other professionals in the football industry.

As owning company, OpenEconomics doesn’t receive donations or sponsorships from football clubs, players, agents or any other subject involved in any competition. The company is not involved in betting activities.

In some case, OpenEconomics may receive compensation for its ratings and certain analyses for which OE always gives immediate and open notice.

OPENECONOMICS KEEPS CERTAIN ACTIVITIES OF ITS BUSINESS UNITS SEPARATE FROM EACH OTHER IN ORDER TO PRESERVE THEIR INDEPENDENCE AND OBJECTIVITY OF THEIR RESPECTIVE ACTIVITIES. AS A RESULT, CERTAIN BUSINESS UNITS OF OE MAY HAVE INFORMATION THAT IS NOT AVAILABLE TO OTHER OE BUSINESS UNITS. OE HAS ESTABLISHED POLICIES AND PROCEDURES TO MAINTAIN THE CONFIDENTIALITY OF CERTAIN NON-PUBLIC INFORMATION RECEIVED IN CONNECTION WITH EACH ANALYTICAL PROCESS.

 

 

ON PLAYERS’ EVALUATIONS

 

What is the meaning of the Market Price of a player?

Market Price (MP) equals the net present value of a contract with standard duration for the most likely purchasing club in the cluster matching the current level of player's performance. Market Price (MP) estimates the most likely price in case of transfer. Market Price is also the standard value conventionally used by PlayRatings in all aggregated tables and ratings

 

What is the meaning of the Residual Value of a player?

The Residual Value (RV) of a Player gives an estimate of the value generated by the existing contract between the club and the player until the end of his legal binding obligations, including the value of the option to renew the contract which is generally associated with it( even though it may not be legally binding). The Residual Value (RV) is the most likely discounted net value that a player's sports performance can generate for the current club. The Residual Value is therefore also the minimum price that a club should be willing to accept to terminate in advance the contract with the player, that is, the minimum transfer price that compensates the club for the waiver. The Residual Value estimate is updated weekly. The remaining duration of a contract strongly affects the Residual Value. Therefore, unless the contract has been signed or renewed recently, it does not reflect the real Market Value of a player economic revenue deriving from the performance of the player during the remaining duration of the contract. Each player is always associated with a single Residual Value

 

What is the meaning of the Renewal Value of a player?

The Renewal Value (RW) of a player quantifies the value for the current team in case of renewal or extension of the current contract. The Renewal Value is equal to the current value of a standard duration contract for the exploitation of the player's sports performance by the team he is currently playing for. This value is also the value that the player would be expected to generate for the team if his contract were extended today with a standard duration. The Renewal Value (RWV) is updated every week

 

What is the meaning of the Potential Value of a player?

The Potential Value (PV) is the discounted net value of a new contract between a club and a player in case of transfer. It expresses the economic value that the player's sports performance is able to generate for the club that acquires the rights for a standard duration contract (inversely proportional to the player's age). The Potential Value also detects a maximum threshold for the price that a club should be willing to pay to buy the player. Since this value varies according to the specific buyer, PlayRatings allows its users to simulate multiple scenarios, based on the setting of two key parameters: (1) the buyer’s team and, (2) his intensity of use in the new team. It should be noted that none of these estimates aim to predict the transfer price of the player (exchange price), but only to establish cost thresholds for the negotiation. Therefore, the RV and PV estimates ultimately suggest a range of consistent values ​​(free from market distortions) within which value creation can occur for both the buyer and the seller. Outside of this range, our model predicts that one of the two clubs is likely to experience an economic loss. It should be noted that any uneconomic decision (if associated solely with the transaction in question) may also correspond to an explicit and informed choice of one or both parties within a broader and / or long-term market policy. To estimate the Potential Value of a player, the user must first select the buyer team and then measure the expected usage intensity (in the "bench" - "holder" range)

What is the difference between the Transfer Price and the Market Price, the Residual Value and the Potential Value?

The actual Transfer Price is the fee agreed between the seller and the buyer for the transfer of a player with a residual contract duration as a result of a negotiation. It doesn’t include the cost of the player’s salary.

The Market Price (MP) estimated by PlayRatings forecasts the most likely price paid for the player in case of transfer to a different club. It doesn’t include the cost of the player’s salary.

The Residual Value (RV) estimated by PlayRatings represents the minimum price that a club should be prepared to accept to terminate the contract with a player before its termination date, thus foregoing the net revenues from the player's performances for the residual duration of the contract.

The Potential Value (EV) estimated by PlayRatings represents the maximum price that a club should be willing to pay to buy the player for a standard period contract . It does not include the cost of the player’s salary.

 

Why does the Potential Value change with to the buyer ?

In the case of a player’s transfer, the buyer willingness to pay changes according to many variables. The economic relevance of the buyer and the future performances of the player are the two most important variables affecting the Potential value of a player for the buyer. Each player generates different values depending on the team he plays with. Richer teams usually imply higher player’s values. The other main variable is the expected performance of the player in the future.

 

What is the interpretation of the Ratings ?

The rating of a player suggests the level of economic and financial risk associated, considering three fundamental variables: (i) the level of historical performance, (ii) the player’s effectiveness compared to the rest of the team and, (iii) his growth prospects. Like a financial rating, each letter represents the level of the respective component. For example, a Rating ABA means that the player is at top of his performance scale (A), has an average effectiveness against his team (B) and has a high potential for future growth (A).

 

Why do some important players have such a low Residual Value?

The residual duration of a contract strongly effects the Residual Value (RV).

In some case, important players have a short residual duration of the contract that determines a Residual Value lower than expected, even zero if the contract is almost expired and the option to renew it has low or zero value for the club.

 

What is the meaning of the Performance value component of a player?

It is the value component related to the player's sport performance during the last three years. More recent performance has higher weight. The estimate is updated every week.

 

What is the meaning of the Effectiveness value component of a player?

It is the value component related to the performance/cost ratio in relation with the average performance/cost ratio in the same team. The estimate is updated every week.

 

What is the meaning of the Availability value component of a player?

It is the value component related to the player's availability = (played matches) / (season matches). The estimate is updated every week.

 

What is the meaning of the Contract value component of a player?

It is the value component related to residual duration of the contract. The longer is the contract, the higher the value. The estimate is updated every week.

 

What is the meaning of the National value component of a player?

It is the value component related to the presence of the player in the national team. The estimate is updated every week.

Age: (AG) is the value component related to the player's age (and indirectly to his experience). The younger the player, the higher is the value because of the potential increase or decrease in the sport performance during the contract in relation to the age. The estimate is updated every year.

 

What is the meaning of the Reputation value component of a player?

It is the value component related to the player's reputation. The higher is the reputation, the higher is the value. The estimate is updated every week.

 

What is the meaning of the Prospect value component of a player?

It is the value component related to the player's potential growth. It is estimated using Real Option theory and Monte Carlo simulation, using data from the player’s historical performance. The estimate is updated every week

 

What is the standard duration of a contract in the simulation for a buyer?

The standard duration of a contract is inversely proportional to the player’s age.

5 years contract duration up to 25 years

4 years contract duration between 26 and 29 years

3 years contract duration between 30 and 32 years

2 years contract duration between 33 and 34 years

1 year contract duration over 34 years

 

How does the renewal salary adjustment work?

Typically, the renewal of a contract increases the player's expected value (Opportunity Value), also depending on the fact that, by renewing the player under contract, the club doesn't have to pay the purchase price for a substitute.

The assumption of PlayRatings is that the club is available to transfer to the player part of this Opportunity Value in the form of a salary increase. The amount of value transfer to the player depends essentially on the two parties (the club and the player) bargaining power. Net of contingent and specific elements, RSA usually depends, on one side, on the level of the player versus comparable players of his same role. On the other side, RSA is related to the economic and performing rank of the club (Club Cluster). The potential wage adjustment (the main item of negotiations for the renewal, together with any buyout clauses) is expressed as a percentage.

 

Is it possible to have players with negative values?

Yes. For instance, if a player doesn’t play any match he just generates a cost for the team, and if his prospect value is sufficiently small, the club should be willing to terminate the contract at zero price.

 

How does the Performance Index work?

The performance index of a player is based on standard formula mixing multiple performance components. The estimate is based on the current season and includes the following performance components:

MINUTES PLAYED, GAMES PLAYED, GAMES STARTED, SUBSTITUTE ON, SUBSTITUTE OFF, ASSISTS, OWN GOALS, GOALS (PENALTIES), MISSED PENALTIES, PENALTIES TAKEN, GOALS CONCEDED, CLEAN SHEETS, YELLOW CARDS, RED CARDS.

Al the data are updated to the last match played.

 

How does PlayRatings compare performance and values of players and teams in different leagues?

Clearly, score a goal in the Premier League has not the same difficulty and value than scoring a goal in the second division of a minor league. PlayRatings captures this difference in the estimation of performances and values thank to a Global Index putting in relation among them both leagues and teams. The Global Intex acts as an adjustment multiplier in all estimations, including the market price forecasts.

 

How does the Club Global Index works?

The Football Global Index estimated is a ranking system designed by PlayRatings for men's football. It is based on three dimensions: (1) performance, (2) economics and (3) popularity. The performance component includes the past 4 years (with decreasing impact for older results) and includes national and international performances. The economic component reflect the club capability in terms of revenue generation. The popularity component is built on the amount of followers of the team on the social media networks.

 

ON THE AGGREGATED INFORMATION

 

How does the value of a player reflect on the Team's and/or the League's value?

The value of a Team considers only the value of the players and doesn’t considers other tangible or intangible assets (like the brand, the stadium, and others).

The Team Value equals the sum of the Market Prices (MP) of all the players playing for the team. The estimate is updated every week. The Value of a League is the cumulative value of all the Teams competing in that League.

 

Is the Team Value reflected in the club official Balance Sheet?

Current accounting practices generally do not allow the potential Market Value of the players to be fully reflected in the club’s official balance sheet.

 

How does PlayRatings identify the emerging players?

Every week PlayRatings selects from the database a list of relevant players that are experiencing the highest increase in terms of Market Values (MV).

This selection aims to identify among 145,000 players in the database the emerging ones with the higher potential.

 

 

ON THE REGISTRATION

 

Why should I register?

Registration is free and allows to access to exclusive contents and games, and also to better interact with the platform. It also allows users to improve the information available, add contents to the player’s pages (like videos and images), become the manager of a page and contribute to the platform in many other ways.

 

Is registration free?

Registration is completely free.

 

Can I open multiple accounts?

Yes. Each account is associated to an email. To open multiple accounts you have to use different emails.

 

I found and error on the website. Can I suggest a revision?

Yes, please do it. Enter the page and click on the report button.

 

I like the platform. How can I collaborate with PlayRatings?

You can became the manager of a page related to a team or a player by contacting us by email at info@playratings.net

 

 

USE OF DATA, ADDITIONAL INFORMATION AND COLLABORATION

 

I’m an amateur user. Can I use PlayRatings’ data?

PlayRatings’ Website and the App are distributed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International license (CC BY-NC-ND 4.0). Attribution: You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.

NonCommercial: You may not use the material for commercial purposes.

NoDerivatives: If you remix, transform, or build upon the material, you may not distribute the modified material.

No additional restrictions: You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.

Exception and limitation: You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation.

Warranties: No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.

Breaches: Any breach of the aforementioned clause may be tantamount to a violation of applicable intellectual property rights within the European Union and other applicable laws. The Provider and any other party authorized on his behalf reserves the right to seek damages to the fullest extent permitted by law against any party directly or indirectly responsible for such a breach.

For a full explanation please refer to the Terms of Use http://www.playratings.net/terms.php

 

I’m a professional media operator. Can I use PlayRatings’ data?

No content (including ratings, economic-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, for professional use without the prior written permission of OpenEconomics S.r.l. or its affiliates (collectively, OE).

If you are a journalist or a professional media operator and you are interested in using PlayRatings contents, please contact us by email at info@playratings.net.

 

I’m a football market professional. Can I use PlayRatings’ data?

You can use PlayRatings’ contents for professional evaluations. You can’t modify, reverse engineer, reproduce or distribute any content in any form by any means, or store in a database or retrieval system without our prior written permission.

If you are a football market professional and you are interested in using PlayRatings contents, please contact us by email at info@playratings.net.

 

I’m a football player on PlayRatings platform. Can I manage my own page?

You can use PlayRatings’ contents for professional evaluations. You can’t modify, reverse engineer, reproduce or distribute in any form by any means, or store in a database or retrieval system without our prior written permission.

If you are a football player and you are interested in using PlayRatings contents, please contact us by email at info@playratings.net.

 

I’m a football player on PlayRatings platform. I disagree on my evaluation. Can I change it?

You can’t change the evaluation from the platform but you can contact us by email to discuss on the assumptions and the evaluation methodology.

 

I’m a team manager. How can I better understand the evaluation criteria?

If you are a football manager and you are interested in using PlayRatings contents, or the additional tools not present on the platform, please contact us by email at info@playratings.net.

 

I’m a player/agent/team. Can I receive a report on a player with more details than those on the platform?

For more details please contact us by email at info@playratings.net.

 

Is it possible to simulate the effect of a player’s sale or acquisition on the Team’s value?

Yes, it is possible. But it needs an additional tool of analysis that is not yet present on PlayRatings.net.

 

 

For more details please contact us by email at info@playratings.net.