Spend it Like Beckham

European Football is similar to American sports in a lot of ways, but one way that it is radically different is player transactions. In European football, the majority of transactions between teams involve a transfer fee. Essentially the players are traded for large sums of money rather than another player. At the moment, however, there is no exact process for evaluating the players. By using data from the last seven years, this study looks to improve the player valuation process by examining how player characteristics, experiences, as well as club characteristics affect the club’s demand for a new player. In the study, I find that football players are very similar to used cars in regards to imperfect information. “Homegrown” players are more costly than heavily transferred players. This study also looks at the recently implemented financial regulations that look to cut down spending and increase competitive balance. From the outside these new financial regulations appear to be working, but they may actually be creating a greater disadvantage for the smaller clubs. While many of the results of this study are significant, there is still a great deal of work to be done before any club uses this method to evaluate players