PLATFORM AND MODELS


THE FOOTBALL EXPERT PLATFORM

 

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

 

They focus on objective evaluation processes, free from the biases that appear to affect the football market, where image building and personal aggrandizement threaten to overcome economic fundamentals, and to combine with irrational exuberance to generate speculative phenomena, bubbles and instability.

 

PlayRatings has developed a digital platform for football fans providing advanced analysis on economics and performances of players, teams and leagues

 

INNOVATIVE

COGNITIVE APPROACH TO ASSESSMENT AND EVALUATION FOR THE FOOTBALL INDUSTRY

EFFECTIVE

BEST IN CLASS IN FORECASTING TRANSACTION FEES IN THE TRANSFER MARKET

OBJECTIVE

INDEPENDENT SOFTWARE-BASED ESTIMATES AND EVALUATIONS

EXCLUSIVE

BASED ON PROPRIETARY MATHEMATIC ALGORITHMS AND ECONOMIC MODELS

COMPLETE

OVER 144K PLAYERS, 6K TEAMS, 200 LEAGUES, 80 COUNTRIES

UPDATED

REAL-TIME UPDATE WITH OVER 3 YEARS BACKLOG

COLLABORATIVE

USER INVOLVEMENT TO TURN COLD DATA IN ENGAGING CONTENTS

 

MODELS

ECONOMIC AND PERFORMANCE ANALYSIS

STATISTICS & INDICATORS

ESTIMATES & VALUATIONS

ADVANCES SIMULATIONS

Transfer market stats

Value and performance rankings

Teams and leagues market stats

Performance comparisons

Advanced search engine

Players value real-time estimation

Players rating

Value trend analysis

Value components in-depth   analysis

Investment risk analysis

Player price simulator

Price risk estimation

Negotiation thresholds

Potential buyer forecast

Legend league simulation

 

THE ECONOMIC MODEL

From an economic standpoint, each player is a unique product and his value is a convex function of price and market size (the number of viewers and the fans who follow him).

Higher quality is reflected twice (through price and market size) and more than proportionally (because of convexity) in the value created through price and quantity.

A transaction to buy the rights on a particular player typically depends on a “twin” transaction, whereby a different player of the same role was sold.

The purchase of a new player thus essentially substitutes for and hopefully improves upon the performance of the player that has been sold. Similarly, when a club sells a player, it will generally engage in a “twin” transaction by buying a substitute player.

Considered as an asset that contributes to the value of the club, a player is a form of «consumption capital», i.e. an essential factor of production, and, at the same time, a consumable item. Its value thus depends jointly on performance and popularity.

Unlike the general case in cost benefit evaluation, the NPV of soccer players depend on well defined «without the project» situations.

These are described by the changes that buying or selling a player are associated with and, in particular, with a single «twin deal», or the substitution of one player with another one.

 

PLAYER’s VALUE

PROPOSITION 1 The maximum cost (WTP) that a club should be willing to pay to acquire a player, as the sum of his contractible transfer price and salary present value, is the net present value of the expected net cash flow from his performance plus the capital gains (or losses) from his sale, minus the net loss (or gain) from the sale of the player he is expected to substitute.

PROPOSITION 2 Under the conditions of Proposition 1, the minimum price a club will be prepared to accept (WTA) will be the net present value of the difference between the net revenues forgone by selling the player plus the capital gains (or losses) from both the present and the expected future sales.

PROPOSITION 3 An agreement between the owning and a purchasing club (OC and PC respectively) at any one time τ will be possible if and only if the PC’s willingness to pay for the player’s rights is greater than the OC reservation price.

PROPOSITION 4 An equilibrium price is a weighted average of the purchasing (PC) and the selling club (SC) reservation prices, the weights being a measure, respectively, of PC and SC bargaining power.

 

PLAYER’s SALARY

The player’s transfer price and salary will both depend on the selling versus the buying club market power (number of bidders that would like to buy the player) and on the player’s bargaining power versus the buying club.

The higher the seller market power, the lower will be both the transfer price and the player’s salary.

A higher player’s bargaining power (BP) creates two effects: a negative one on the transfer price, since the surplus for the buying club will be lower, and a higher one on his salary, since his share of the surplus will be higher. The net effect is quadratic and is first positive and eventually negative. A higher BP will thus cause a lower salary.