[DISCUSSION/SUGGESTION] Player Valuation and the Transfer Market

[Harper]

No apologies for the length (there is a summary at the end).

Over the past several versions of FM (and with a big dose of recency bias), my experience in the transfer market has been frustrating.

When I want to sell a player, I rarely get a transfer offer that meets or exceeds what the game presents as the player's value. When I offer a player to clubs, the offers I receive are significantly lower that either the value portrayed by the game or my asking price (regardless of it being higher, lower, or equal to the value indicated in his profile). Even more frustrating, those offers are non-negotiable. On top of this, I rarely receive offers from the biggest clubs listed as interested on the player's transfer status page as having interest. There never seems to be any interest of poaching my talent from either my domestic or continental rivals. Transfer listing immediately results in low-ball offers. There isn't any feedback on what the board's valuation is.

EDIT 1: Some of this could be improved by a suggestion I made previously. Communicating with players and agents prior to contract and transfer offers, in order to have that player's agent discreetly seek out potential moves without broadcasting the player's availability. The idea I set forth below doesn't necessarily resolve the issues I outlined above. Many of the problems I have selling a player may purely be my mental block. When I see that my third or fourth choice England-capped midfield has a value of £56M, I expect to get a decent return (over time and performance based, if necessary). When the only offers I receive are non-negotiable £15M with significant wage contribution from bottom-half PL teams and championship promotion challengers, I shrug those off. Maybe that £56M is the market value I describe below. Maybe all I'm really asking for is the club accountant's value of the player so that I can overcome my own mental block. /EDIT

There are a few things that I think could improve feedback in the game: book value, market value, and market analysis.

Book Value allows the manager, me, to make a transfer decision that at minimum is not a detriment to the club's finances, and therefore, minimally acceptable to the board.

This is strict arithmetic; BV = (T / Y) + (B + C - F):

• BV = Book Value (BV) equals
• T = Transfer fee
• Y = Years of service to
• B = Remaining loyalty bonus
• C = Estimated commercial impact
• F = Loan fees received.

BV = (T / Y) + (L + C - F)

Selling academy players might result in a larger profit than selling transfer busts, as those academy players have have no transfer fee.

Market Value is an indication of how the player is valued by the public at large. Market value is imprecise and impacted by the ability of your recruitment team and director of football to gauge the market.

I don't quite know how to calculate this, or maybe this is what is already done and presented in the game. 

A player's market value may be inflated by:

• Statistics / Match Ratings, weighted with a recency bias
• Reputation
• Greater than 18 months remaining on contract,
• Recent Transfer Fee Comparisons
• First Team squad importance (first team playing time and contract value is a proxy for this), 
• Competition(s) he plays in -domestic, continental, and international,
• Competitions won (weighted with a recency bias),
• Awards won or been short-listed for, and
• Characteristics
  • Loyalty
    • Desire to stay at club
  • Professionalism
    • No leaks to press
    • Remains competitive in games

On the other hand, market value maybe adversely impacted by:

• Fewer than 24 months remaining on contract
• Injuries 
  • severity of injuries (length out of action)
  • unable to reclaim spot
• Characteristics
  • Professionalism (might be applicable to regens only)
    • Press leaks,
    • Disruption of squad harmony,
    • Training bust-ups,
    • Reduced competitiveness in games
  • Ambition
    • Demonstrated or rumored interest from larger clubs
    • Failing to replace key players sold by the club
• Playing Time
  • Lack of first team action (at club or on loan)
• Lack of experience
  • Youth players with no top flight, first team experience have lower market value
• Reputation
• Statistics and poor Match Ratings

I do not believe that release clause(s) would factor into the increasing or decreasing the market value. When market value approaches or exceeds release clause values, this is an indication that the club should offer new terms. As market value approaches or exceed the release clause value, clubs may trigger the clause before new terms can be offered.

Market Analysis provides information about the opportunities to sell a player in the upcoming transfer window. The report is tied to the quality of your recruitment department and director of football. 

The report comes in two formats: general overview and player specific report.

The general overview is a report that summarizes demand in the upcoming window.

Ideally, this would identify clubs anticipated to be active in the market or have known weaknesses, what position(s) they are searching for, estimated budget, and approximately what level of talent required -first team, depth, short-term or long term replacement.

In that report, it would identify which of my players fit the bill. Perhaps my backup looking for more playing time is their starter.

The game currently provides information about what a club is looking for. However, this only occurs when you are placing a transfer offer for their player, seemingly as a mean to encourage the rare player exchange. My proposed market analysis report collates the information provided at individual transfer offer screens into a centralized hub. This could also be a recurring news item during the transfer window that updates with transfer activity and domino effects that may occur.

The player specific report is a counter-part to the current transfer recommendations we can request from our DoF. When a manager requests a market analysis for a player, and the report comes back a few days, weeks, month(s) later (depending on analyst knowledge, ability, and availability), identifying clubs which might be good landing spots for the player. This could be clubs that are looking for improvement, replacement (immediate or long-term), squad competition and or depth at that position.

This is a discreet search, one that doesn't trigger a "bargain hunter" type bid from clubs that happens when a player is transfer listed or offered to clubs. It might allow the manager to determine likelihood of a bidding war. A press leak might unsettle the player or see the player indicate a desire to stay at the club.

Summary

Book value represents the minimum value a player should be sold for from business perspective. Market Value is the perceived maximum a player is worth.

Having these values inverse (market value less than book value) is possible, and obviously not great for the club. Selling a young player for significantly less than book value might upset the board and receive poor reactions from the board for transfer activity. Selling significantly lower than market value, or having a player in his prime run down his contract, would lead to poor reactions from the fans.

Market Analysis identifies opportunities in the market and dependent on the recruitment team's abilities and coverage.

Edited April 10, 2020 by Harper

[FlorianAlbert9]

Surely FM could improve a lot, I don't know how different is their model from yours, that seems a good work  I would add the amount of money a club had to your equation 'cause for example a club with 500millions could reject easier a 50millions bid than a club with 10millions.

(I have to say that it's possible get big money from AI, for example I sold many young valued less then 1million for even 40million)

[Harper]

2 hours ago, FlorianAlbert9 said:

Surely FM could improve a lot, I don't know how different is their model from yours, that seems a good work  I would add the amount of money a club had to your equation 'cause for example a club with 500millions could reject easier a 50millions bid than a club with 10millions.

(I have to say that it's possible get big money from AI, for example I sold many young valued less then 1million for even 40million)

Added this bit

Some of this could be improved by a suggestion I made previously. Communicating with players and agents prior to contract and transfer offers, in order to have that player's agent discreetly seek out potential moves without broadcasting the player's availability. The idea I set forth below doesn't necessarily resolve the issues I outlined above. Many of the problems I have selling a player may purely be my mental block. When I see that my third or fourth choice England-capped midfield has a value of £56M, I expect to get a decent return (over time and performance based, if necessary). When the only offers I receive are non-negotiable £15M with significant wage contribution from bottom-half PL teams and championship promotion challengers, I shrug those off. Maybe that £56M is the market value I describe below. Maybe all I'm really asking for is the club accountant's value of the player so that I can overcome my own mental block.

Edited April 10, 2020 by Harper

[Jorge666]

Yeah I agree, very annoying, I started with 1860 Munich and somehow convinced the board to sign erkan eyibil for 2.5m took him up to bundesliga 2 and his stats went up tremendously, got about 8 goals and 12 assists and an average rating of about 7.3 all season, he wouldn't renew his contract at 1 year because he wanted more wages than I could offer so with 10 months left on his contract I begrudgingly sold him for 2.6, his "value" at the time Hertha Berlin even offered 2.6 and asked me to pay his entire wages!! If I had wanted to buy him (the vultures started looming as soon as he rejected the contract) if I'd wanted to buy him they'd have demanded £10m i guarantee it, I think "it's plan" was to just take my star player for free when his contract ran out or force me to sell him for nothing now, off topic maybe a feature to ask your player where is his loyalty would be a good addition... 

[Yuko]

This direction is a must since the game has introduced and uses Financial Fair Play.

This is one of the catalysts of why transfers are much more frequent in this era, and not the agents' growing power; that came due to this. 

 

It might sound complex to most football fans but the idea of book value, amortization cost and all the necessary stuff about players as club assets and the whole FFP thing needs to be implemented somehow. I'm pretty sure it's a coding issue and the developers can find a way to slide it in. 

 

For example if I buy a player for 20m with a 5 year contract, that pretty much gives him a 4m amortization cost per year. To keep things simple, his book value will fall to 16m as the 4m was 'used' by the club. Now I have to sell this player for 16m to 'break even' and avoid a capital loss or not incur capital gains. But on FM you see clubs signing players for 20m, maybe a 4 year contract, then selling them the next summer for 10m. That pretty much hands them a 5m capital loss, which works against their FFP cause. 

FM needs to implement this if we want to have a more realistic transfer market and proper FFP obedience. And it shall either reduce the amount of unnecessary big money transfers that we see with players going for 40m, not being used almost at all by their new teams and then being offloaded for 15m, which is a huge capital loss. In real life, we see clubs use the loan market a lot more, have options after 1 or 2 seasons at the amount that the capital loss will fall to zero. 

An example is Gonzalo Higuain from Napoli to Juventus and then his loan deal to Milan. Transfer cost was 90m, his contract was 5 years long. That means he has a 18m amortization cost per annum. He moved to Milan on loan with a 18m fee (season book cost) and a clause of 36m at the end of the season. This would have broken even the transfer for Juventus. Anything less than this amount would have been a loss. And now that Higuain is back to Juventus, his cost per annum remains 18m unless he extends his deal. That would make the amortization cost lower as his new book value divided by years of contract. 

So since Higuain costs 18m per year to Juventus, they are restricted by this and cannot really buy someone else unless they manage to reduce this cost, either by extending his contract (which will have other budgetary issues) or by selling him. Or by loaning him out with a fee paid by the other club. 

In FM terms, this means that if my transfer budget as Juventus manager could have been 300m since my cash stack seems healthy enough, it should fall to 60m since I have to incur the amortization costs of Cristiano Ronaldo (roughly 30m per year), Higuain (18m per year) and many more, since I cannot add that much more to my amortization costs. Buying a player for 60m and a 5 year contract means that I will incur a 12m amortization cost this season, which is all I can afford due to my already high costs. The good thing being Juventus is that I can afford to make capital gains by selling one of the players signed on Bosman deals. Thatt's 100% capital gains. But if I sell Cristiano Ronaldo for like 15m because his salary is too high, I'll get hit by a significant capital loss, which I may have to weigh compared to what freeing his salary allows me to do.

So it's complex as you can see, but also necessary and well, game changing. 

 

I'm pretty sure an accountant can paint the picture with more precision than I did, but that's the gist of it. And it's the most crucial aspect of the transfer market activity of football in the last 6-7 seasons. 

[Harper]

Third aspect that I thought of while responding to another post is an internal "Projected Value"

Each player has a blue sky (high), cloudy sky (average), stormy sky (low) projection for the value through the end of their contract.

Blue sky; projects maximum anticipated fee (not necessarily greater than previous fee)

• Player grows in ability and reputation as projected by coaching/recruitment team
• performs on the pitch as a key player (over performs expectations), and
• remains relatively injury free, and

Cloudy sky: median, most likely anticipated fee

• everything is fine, player improves, plays well, retains value, general market value for the player.

Low sky; projects minimum anticipated fee

• Player regresses or does not improve
  • Bad scout prognostication?
• Does not perform
  • Bad tactical fit?
• Hampered by Injuries
• Does not fit squad dynamics/does not adapt to country?

[Luke Hume]

Reviewed so locked.