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Football Would Be Better If Players Made More Money

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He cries for football.
He cries for football.

Footballers make a lot of money. Far too much money, says general opinion - the huge salaries they're commanding has been blamed for, amongst other things, high ticket prices, ludicrous player egos, a total lack of moral fibre, the collapse of the British Empire and the loss of Gustavus Adolphus at the Battle of Lützen. It's not really a surprise that players get such venom regarding their wages, since many of them earn more in a fortnight than 95% of the population earn in a year. Those are the sort of numbers that makes people cranky.

In light of popular sentiment, then, this statement's going to be remarkably unpopular: There's a decent argument to be made that footballers are in fact underpaid, and underpaid to the point that they're being exploited by the clubs. (That odd sound you just heard was hundreds of people clicking the 'x' button on their browser). Bear with me. I can explain.

The first thing we have to deal with is the conceit that footballers shouldn't get paid vast sums for, essentially, playing a child's game. This sounds reasonable, but is actually slightly odd - you have to hold a pretty strange set of beliefs to think that, say, the very best footballers shouldn't earn good money, but the very best artists shouldn't. Or that professional money manipulators are somehow more worthy of a high income than those whose job it is to kick a ball around in entertaining fashion. If people are paying to watch football (and they are), if money's going into the game... well, then players deserve some of that. How much do they deserve, though?

It's important to bear in mind just how difficult it is to become a top-level athlete. It's a highly sought after job only available to those born with a combination of absurd talent, supreme dedication and luck. For every player who's made it as a superstar, a thousand tried and failed, most washing out entirely and a few hanging around as professionals somewhere on the rung. Most pros make very good money, of course, but it's important to point out that most who choose football as a career will not.

And that's very important, because for many, pursuing that dream closes off other doors. Gone is the chance for a university education, at least in Europe, and technical skills aren't much easier to come by when you're trying to make it big in the world of football either. The reason most players come off as uneducated boors in interviews is because we've demanded a level of perfection in their play which precludes them from doing much else but devote themselves to their work. So when there's an injury, or a washing-out, there's not a whole lot for players to fall back on. The combination of risk and talent demands substantial compensation for the very best players.

But that's not an argument for higher wages - it's an argument for not having lower wages, which are completely different things. Now that I've hopefully convinced people of the need to have some sympathy for players, let's take a look at a purely economic argument for the idea that clubs aren't compensating players enough.

The clue lies in player transfers - specifically in transfer fees. When we looked at the Luka Modric situation a few days ago, I pointed out that Modric's contract is such that he's worth a lot more to Tottenham Hotspur under his current deal than he's worth to Chelsea under his new deal, because he's only being paid £45,000* per week. But no matter how you slice and dice it, he's still worth a substantial amount of money to Chelsea (and, of course, an even bigger amount to Spurs). What does that imply?

*Initially I had mistakenly put down £30,000 a week, because I'm an idiot.

Players under contract have a certain inherent value to a team. They produce on the pitch, drive merchandise sales and have some resale value that changes based on how they've been playing recently, how they project and how much time is left on the deal. You can convert that into single number (don't ask me how, of course, because nobody knows), which we will call r. The wages part is easier - a club makes a commitment to keep a player around for x years for y amount of money, then we add an overhead to get c. Simple.

The value of a contract to a team, then, is just r minus c. We can make a very simplistic transfer fee model with that data, namely:

Where x is the number of total transfer, which is some large finite number. Some trivial algebra gives us the result that r is always greater than c, and by a goodly amount to boot, because there are never negative transfers and there are no non-transferable players. Except possibly Adrian Mutu.

(As an aside... realistically, this is all that a transfer fee is - how much one team is willing to pay another to break a contract between the player and his original team. Due to the contract terms and length, there's not a direct relationship between on-field production and transfer fee. The correlation between the amortised fee and the player's wages together will always be much closer to said player's worth, which means that the Jordan Henderson deal might not have been so bad (cheap wages) and the Fernando Torres purchase looks even worse.)

We'd expect r to be greater than c to account for overheads and the like, of course. Football teams need to maintain stadiums,.backroom staff and reserve players, so there's a huge overhead there, and a quick scan of teams books shows that most teams are losing money, and most of the money is being spent on players. But the gap between r and c implied by the huge transfer fees that are being bandied about is way above and beyond any overhead we'd expect.

It's tempting to portray this as some sort of amazing trickle-down effect of great benefit to football as a whole. Small clubs unearth great players and sell them on, using the money they never paid to said player in order to invest in their youth team, facilities, etc. And yeah, that's all great, until you realise that that doesn't actually happen, and instead you just see the feeder clubs like Porto and Udinese registering silly profits - and then banking them. Because they can. It also serves to concentrate so many top players at so few clubs that half of them don't even get to play football anymore. Will we ever see Nuri Sahin again? Don't count on it.

Players are the ones doing the entertaining and taking all of the risks. Why are we (as a collective) on the owners' sides here? After all, fans don't really benefit from lower wages and higher transfer fees. In absolutely no world ever does a football team base its ticket price on its costs - it'll set prices at what it thinks people are willing to spend. And yet, players are cast as villains. It's bizarre.

We have a system which appears to systematically exploit players (and yes, you can be exploited even while being paid well, especially when your career is realistically only fifteen years long), and one which concentrates too many star players on too few good teams. If every single player was paid what they're worth to a team, what would we see?

We'd see some player movement, of course, but it would be in the form of Bosman free transfers - there'd be no incentive to spend a tonne of money on a player who's basically only going to cover his overhead costs. So, we'd get far fewer player for cash transfers. What does that mean?

It means football is better. But I've skipped a step, so I'll show my work. Here's an illustrative anecdote. A hypothetical club (we'll call them 'Real Madrid') has a superstar midfielder. A new coach arrives, and attracts some excellent young talent, and with the players wanting to move they are duly dispatched to this wholly imaginary team. But now you have two or three elite level talents competing for one spot. Even in a squad rotation system, the players will each be featuring less than if you split them up.

So what happens under our scenario where players get paid fairly? First of all, superstar midfielder makes significantly more money at 'Real Madrid', and the up and comers are also getting more in their clubs (but less than they would at 'Madrid', due to TV deals, etc). Each player sees out their contract and becomes a free agent at the end of it. Suddenly, 'Madrid' have very little incentive to stockpile superstars. Perhaps the young talent goes elsewhere, perhaps it stays with their original league and team. But no matter what, there's a net increase in talent and an improvement in competitive balance.

Isn't that what we really want? I know it's strange, coming from a Chelsea fan, but I think the game would be much better served if the elite teams actually had some competition. The world is a better place with Alexis Sanchez starting for Udinese rather than being an impact sub for Barcelona. Russian football is far improved if Yuri Zhirkov never leaves - and Chelsea would hardly have been diminished if Zhirkov had never come to the Blues (not to say I don't love him, of course). Football without transfers sounds like a lot more fun. Even if Chelsea would win less.

So, the next time you feel like hammering a player for wanting more money, remember that they're not getting paid nearly what they're worth - and that football would be a much better spectacle if they were getting their fair share of the money being poured into the game.