Measuring the monetary risk involved when spending in the transfer market.

As the final transfer window in the 18/19 season has now closed, this review will look back and assess the business conducted by clubs in the transfer market this season. This review will follow the same format and rules as our previous summer transfer window review, which can be read here: http://thetransferlist.co.uk/index.php/home/updates/1819-summer-transfer-window-summary

Leagues

Premier League clubs were once again the most inefficent in the transfer market as they conducted £250.13m worth of business with a variance of -£110.43m. However, none of the top four leagues were efficient in their transfer dealings in the January transfer window. La Liga clubs were involved with the least amount of business in terms of value, with transfers totalling £92.97m. We recorded the variance of these transfers to be -£51.93m. Bundesliga clubs completed transfers totalling £126.84m with a variance of -£15.61m. Similarly, Serie A clubs conducted £163.85m worth of business, with a variance of -£13.78m.

When adding these results to the figures that we calculated after the summer transfer window, Bundesliga clubs were the most efficient in the 18/19 season with a total variance of -£1.88m. La Liga clubs dropped to second place after the January transfer window, recording a total variance of -£25.9m. Serie A and Premier League clubs remained in 3rd and 4th place respectively, with a total variance of -£184.12m recorded for the Italians. The Premier League fell significantly behind the other three major European leagues, with a cumulative variance of -£678.88m over the 18/19 season.

This reinforces the point that we presented in the previous review; despite having the most lucrative TV deal in world football, Premier League clubs have been outperformed in recent years by Bundesliga and La Liga clubs in European competition.

Clubs

Most efficient: Borussia Dortmund

The current Bundesliga leaders completed two transfers during the January transfer window; the purchase of Leonardo Balerdi from Boca Juniors and the sale of Cristian Pulisic to Chelsea. As the purchase of Leonardo Balerdi produced a negative variance, the sale of Cristian Pulisic is the sole reason for Borussia Dortmund having the greatest efficiency. Therefore, this is the transfer that will be focused on, especially as the player also commanded the largest 'overspend' of the window.

Cristian Pulisic was sold to Chelsea for £57.60m, a player that we valued at just £9.83m. This lead to a positive variance of £47.77m, but why was our valuation so much lower than the eventual transfer fee?

Firstly, the American is not being tested enough at international level. At the start of the season, the USA ranked 22nd in the FIFA World Rankings after they failed to qualify for the 2018 World Cup. Simply, this is not a high enough standard for a player of Pulisic's quality. Therefore, despite accumulating 23 international caps by the age of 20, international appearances contributed little towards Pulisic's value.

However, with many promising young American players such as Zack Steffen, Weston McKennie, Timothy Weah and Tyler Adams breaking into the US national team, there is potential for the nation to improve in the coming years. This in turn would significantly increase Pulisic's value and so this future potential is likely to have been considered by Chelsea before purchasing the player.

Secondly, at just 20 years old, Pulisic is still 5 years away from entering his peak years. Whilst this is promising when considering qualititative factors such as his average level of performance, this also means that there are significant risks associated with the player's development. It is likely that Chelsea purchased Pulisic in the hope of developing him as a player, however, there is no guarantee that his performances will ever improve. In addition, random factors such as injuries may significantly hinder his development. Therefore, this is accounted for as a risk within our model and reduces a players valuation.

To summarise, whilst Pulisic's current value is considerably lower than the fee Chelsea spent to acquire his services, after considering the player and his nation's potential for development, Pulisic's value is expected to increase. When also considering qualitative factors such as his marketability and level of performance, this purchase may turn out to be a shrewd purchase by Chelsea, so long as Pulisic develops as the club and his nation hope and isn't significantly hampered by injury during his career.

Least efficient: Chelsea / Milan

Chelsea's aforementioned purchase of Pulisic led to the Blues being recorded as the least efficient team in the January transfer window. When adding this figure to those recorded after the Summer transfer window, Chelsea were also the largest 'overspenders' in the 18/19 season, overtaking Juventus who were discussed in our previous review. However, as two of Chelsea's four major transfers have already been discussed (the purchase of Kepa was analysed in our Summer transfer window review), second placed Milan will be discussed instead.

Milan completed just one transfer during the January transfer window, the purchase of Krzysztof Piatek from Genoa for £31.5m (the deal for Lucas Paqueta was completed during the Summer transfer window). For this transfer, we calculated a variance of -£30.91m as we valued Piatek at just £0.59m.

This low valuation is due to the fact that Piatek has only been playing in a top European league for six months. Last season, Krzysztof was relatively unknown outside of his native Poland. Prior to the 17/18 season, Piatek had only once scored over 10 goals in a season. During the 17/18 season, Piatek went on to score 21 goals for Cracovia, yet this was only enough to place him third in the scoring charts whilst Cracovia finished tenth in the league. However, this was enough for Genoa to take a punt on the young Pole, signing him for £4.05m.

Piatek made his debut on the second gameweek this season, scoring against Empoli in a 2-1 win. He went on to score 8 goals in his next 6 appearances which was enough to earn a call-up to the Polish national side. Since then, Piatek has scored 4 goals in his next ten appearances and currently sits as the leagues 4th highest scorer, behind Cristiano Ronaldo, Fabio Quagliarella and Duvan Zapata.

To summarise, Piatek's valuation was so low in relation to his transfer value as he has been one of the breakout stars of the 18/19 season. Therefore, he remains an unknown quantity. If he continues his current form, Milan may have finally found the striker that they have lacked since the sale of Zlatan Ibrahimovic to PSG back in 2012. However, with no prior experience in Europe's top leagues or at the highest international level, this deal represents a huge gamble by the Rossoneri.

 

 


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