THE CORRELATION BETWEEN PLAYER VALUATION AND THE BARGAINING POSITION OF CLUBS IN THE ENGLISH PREMIER LEAGUE (EPL)

Year 2016, Volume: 8 Issue: 1, 209 - 225, 01.06.2016

M.J. Swanepoel J. Swanepoel

Abstract

Soccer is perhaps the most loved game in the world, filled with passion both on and off the field. Literature suggests that the English Premier League (EPL) is one of the most sought after championship in soccer. The study investigates the relationship between player valuation and the bargaining positions of clubs in the English Premier League (EPL). A comprehensive literature analysis illustrates that the bargaining positions of clubs should consider factors such as previous seasons’ financial performance, league performance, managerial change and prestige of playing. A quantitative research approach using causality was used to determine the influence of the bargaining position on players’ valuation in the EPL. The sample of the study comprises EPL transferred players (n=409) during the period summer 2012 and winter 2015 transfer windows. In determining the results; correlation analysis and analysis of variance (ANOVA) were conducted on the data. The results of the correlation analysis indicate a strong association between the bargaining position of the buying and lower association between the bargaining positions of the selling club in the influence of player valuation. In the analysis of the results of the ANOVA the strength of a relationship had a variance span from non-existent, too weak, to very strong. The ultimate conclusion of this study based on the results is that valuation of EPL players are often influenced by the bargaining positions of buying clubs. The study contributes to the body of knowledge on valuation of EPL players proving that it is demand-driven, therefore the bargaining position of buying clubs is the determinant

Keywords

English Premier League, valuation, transfers windows, bargaining position

References

• BBC Sport. rights. http://www.bbc.com/sport/0/football/31357409. Accessed on 9 Dec. 2015. (2015).
• BBC Sport, Premier League TV BBC. (2015). Premier League: Transfer window proves richest ever at
• £870m. http://www.bbc.com/sport/football/34118289. Accessed on 9 Dec. 2015.
• Bowen, G.A. (2009). Document analysis as a qualitative research method.
• Qualitative Research Journal, 9(2), 27-40. Bryson, A., Flick, B. & Simmers, R. (2013). The returns to scares talent:
• Footedness and player remuneration in European soccer. Journal of Sports Economics, 14(6), 606-628. Carmichael, F. & Thomas, D. (1993). Bargaining in the transfer market: theory and evidence. Applied Economics, 25(12), 1467-1476.
• Carmichael, F., McHale, I. & Thomas, D. (2010). Maintaining market position:
• Team performance, revenue and wage expenditure in the English premier League. Bulletin of Economic Research, 63(4), 464-497. Clark, J. (2010). Back on Track? The Outlook for the Global Sports Market to , PriceWaterhouseCoopers, May, London.
• Corbin, J.A. & Strauss, A. (2008). Basics of Qualitative Research (3rd ed.).
• Thousand Oaks, CA: Sage. Correia, C., Flynn, D., Uliana, E. & Wormald, M. (2015). Financial Management. th Edition. Cape Town: Juta & Company Ltd.
• Creswell, J.W. (2003). Research Design: Qualitative, Quantitative, and Mixed
• Methods Approaches (2nd ed.). Thousand Oaks, CA: Sage. Deloitte (2016). Deloitte Football Money League group/articles/deloitte-football-money-league.html. Accessed on 22 Jan. 2016. http://www2.deloitte.com/uk/en/pages/sports-business
• Deloitte Sports Business Group. (2015). Commercial Breaks - Football Money League. Manchester.
• Deloitte. (2008). Annual Review of Football Finance: Sterling Silverware. Manchester: Deloitte.
• Depken, C.A. & Rajasekhur, R. 2010. Open market valuation of player performance in cricket: Evidence from Indian premier league. http://dx.doi.org/10.2139/ssrn.1593196 . Accessed on 9 Dec. 2015.
• Drucker, P. (1954). The practice of management. New York: Happer & Row.
• Elliott, R. (2014). Brits aboard: A case study analysis of these British footballers migrating to the Hungarian Soproni Liga. Soccer & Society, 15(4), 517-534.
• Fouche, J. & Barnard, J. (2013). Financial Management: Turning theory into practice. Cape Town: Oxford University Press.
• Gerrard, B. (2010). Analysing Sporting Efficiency Using Standardised Win Cost:
• Evidence from the FA Premier League, 1995 – 2007. International Journal of
• Sports Science & Coaching, 5(1),13-35. Gerrard, B. (2010). Analysing Sporty Efficiency from the FA Premier League,
• – 2007. International Journal of Sports Science & Coaching, 5(1), 13-35.
• Gerrard, B. (2001). A new approach to measuring player and team quality in professional team sports, European Sport Management Quarterly, 1(3), 219-234.
• Greulich, K. (2013). Transfer costs of human capital in the English Premier League. pdf. Accessed on 9 Dec. 2015. http://business.pages.tcnj.edu/files/2013/07/Greulich-thesis
• Hauke, J. & Kossowski, T. (2011). Comparison of values of Pearson’s and Spearman’s correlation coefficients on the same sets of data. Quaestiones Geographicae 30(2), 87-93.
• Morrow, S. (2013). "Football club financial reporting: time for a new model?",
• Sport, Business and Management: An International Journal, 3(4), 297-311. Mail & Guardian. https://www.theguardian.com/football/premierleague. Accessed on 12 Mar. 2016.
• Nesje, T. & Ufs, K.T. (2015). The Price is Right? A study of EPL clubs’ behaviour in the transfer market. Masteroppgave i Økonomi og Administrasjon,
• Hİgskolen i Oslo og Akershus, Fakultet for samfunnsfag. Oslo. Oberstone, J. (2009). Differentiating the top EPL football clubs from the rest of the pack: Identifying the keys to success. Journal of Quantitative Analysis in Sport, 5(3), 1-27.
• Oxford English Dictionary. (2006). Oxford: Oxford University Press.
• Parker, D., Burns, P. & Natarajan, H. (2008). Player valuations in the Indian
• Premier League. Frontier Economics, 1-17. Premier League. (2016). http://www.premierleague.com. Accessed on 17 Aug.
• Pujol, F., Garcia-del-Barrio, P. & Elizalde, J. (2007). ESIrg Report on Media
• Value in Football: The English Premiership Extends its Supremacy. Universidad de Navarra. Puth, M., Neuhauser, M., & Ruxton, G.D. (2015). Effective use of Spearman's and Kendall's correlation coefficients for association between two measured traits. Animal Behaviour, 102, 77-84
• Rebekić, A., Lončarić, Z., Petrović, S., Marić, S. (2015). Pearson’s or spearman’s correlation coefficient – which one to use? Poljoprivreda, 21(2), 47-54.
• Rosen, S. & Sanderson, A. (2001). Labour Markets in Professional Sports. The Economic Journal, 111(469), 47-68.
• Sloane, P.J. (1969). The Labour Market in Professional Football. British Journal of Industrial Relations, 7(2),181-199. Statista. capacity/. Accessed on 2 Mar. 2016.
• Swart, J.J., Swanepoel, M.J & Surujlal, J. (2014). A critical analysis of government spending on sport: Mass participation and school allocation. African
• Journal for Physical, Health Education, Recreation and Dance (AJPHERD), October 2014 (Supplement 2:2), 251-265.
• Szymanski, S. (2001). Income Inequality, Competitive Balance and the Attractiveness of Team Sports: Some Evidence and a Natural Experiment from
• English Soccer. The Economic Journal, (111) 469, 69-84. Szymanski, S. (2007). The Champions League and the Coase Theorem. Scottish
• Journal of Political Economy, 54(3), 355-73. Totalsportek. (2016). 2015 Premier League Financial Report Of All 20 Clubs –
• Released. http://www.totalsportek.com/money/premier-league-financial-report-of-all- clubs/ . Accessed on 22 Jan. 2016. Transfermarkt. league/startseite/wettbewerb/GB1. Accessed on 15 Mar. 2016. http://www.transfermarkt.com/premier
• Tunaru, R., Clark, E. & Viney, H. (2005). An Option Pricing Framework for
• Valuation of Football Players. Review of Financial Economics, 14, 281-295. Tunaru, R.S. & Viney, H.P. (2010). Valuations of soccer players from statistical performance data. Journal of Quantitative Analysis in Sport, 6(2), 1-21.
• Van den Berg, E. (2011). The Valuation of Human Capital in the Football Player
• Transfer Market: An investigation of transfer fees paid and received in the English Premier League. (Master thesis) Erasmus School of Economics. Vik, P. (2014). Regression, ANOVA, and the general linear model: A Statistics
• Primer. Sage Publications, Inc. California. Welman, C., Kruger, S.J. & Mitchell, B. (2005). Research methodology. 3rd ed.
• Cape Town: Oxford University Press.