The FT today has a story about research by a Cass Business School professor who questions the high cost of footballers’ transfer fees makes financial sense to Premiership clubs.
Gilad Livne argues that new accounting rules mean that football managers will have to disclose all transfer fess on their clubs’ balance sheets. His research into 58 clubs shows that high transfer fee players “might not enhance profitability or cash flow”.
Of course, football fans would argue that their club’s share price isn&rsqou;t, shall we say, the most pressing dependent variable. Victories in a season, perhaps, would be a better indication of whether that big signing was value for money.
The excellent JunkCharts blog, which tracks dodgy visualisations of statistics in the news, notices just this kind of story, albeit about about the baseball clubs’s payrolls, in the New York Times. This one has the advantage of using the only dependent variable that anyone reading the sports page will care about.
But Junk Charts points out that the Times gets the statistics wrong: &ldquo there appears to be a general association between payroll and winningness”.
It would be interesting to see the same thing done for the Premiership. If Livne Livne is right, the requisite dataset of transfer fees may soon become available.