I’m a great fan of The Football Terrace, hosted by Terry Flewers, a Man United fan. His channel is a general football channel, and not just focused on Man U, however, he continually makes a sound point vis a vis football transfers.
Football transfers are prices, and prices are subject to inflation.
It’s that simple.
If people have more money to spend, then product prices can rise.
Worth is always subjective and based on what buyers and sellers are willing to agree with.
Van Dijk will cost £75m, which is a world record for a defender. However, this is why I believe he is worth it:
-
Inflationary effects
One of the causes of inflation in an economy is money supply factors. Without using too much economic jargon, this just means that if there is more money in an economy, then people may be more willing to spend, and thus prices go up to take advantage of this. It’s like if a new high-end apartment block opens up in a poorer area of town. There may be more goods and services to take advantage of this, like new shops, stores, or other amenities. It’s the same principle here. More money means higher rates and more opportunities.
Another example, and perhaps a peculiar one, is “tourist prices”. If a Westerner visits a third world country, s/he may be charged at higher rates even if the individual isn’t wealthy. It’s the perception, (whether accurate or not) of wealth that ensures things from taxi rides, to bar drinks, or souvenirs, are more highly-priced. The principle is still the same. More spending power relates to a higher price.
-
More income streams
As the world’s most popular sport, football is riding the wave of increased global sports commercialism. This is not exclusive to football, but all sports in recent decades have caught this bug. The Mayweather/McGregor fight is an example since it got big box office and billing.
So with bigger TV rights deals, sponsorships, prize money, and wealthy owners inputting funds, it’s a no-brainer where this inflationary pressure is coming from.
-
Worth is subjective
When Dele Alli joined Spurs from MK Dons, he cost £5m. Maradona, when he was the world record transfer signing, cost the same. Now, Alli is talented, and few would question that. But Maradona patently is an all-time footballing legend. Alli may never reach Maradona’s level, and only Ronaldo and Messi can make claim to that of current players.
But what is that? Maradona joined Napoli many years ago, and times, prices, and the transfer market have changed since then? Well, this is why transfer prices have increased since factors have altered. We’ve seen that the world record fee has grown over time, and if anything the massive leap within a year from Pogba to Neymar highlights the level of money and purchasing power in contemporary football. More money does command higher prices.
I firmly believe we will see a £1 billion player in the near future. He may currently be a schoolboy, playing grassroots football somewhere for all we know. But present trends do not look like abating any time soon, and as value changes, the world’s first £1 billion could result.
-
False weighting
I believe this notion that players are not “worth it” comes from a false weighting of prices. All prices, for virtually all products, are set by demand and supply factors, or the acceptable profits/losses that a firm will accrue. A can of Coke in 1995 cost less than it does today. The reasons are as aforecited.
A price only reflects the present realities of the market or the buyer and seller’s needs. That’s it. Transfer registrations are products, and as items for sale thus have associated prices. A price is just a label to identify how much to transfer something from party A to party B. Again, that’s it. It may seem formulaic, but then it’s pretty much the principal facet at play.
Both Soton and Liverpool, of course, play in the Premier League and understand the footballing market. They are subject to the prevailing TV firms, media, agents, and footballing authorities, and have agreed on a fee based on the current circumstances in this market. This is the only thing that makes van Dijk “worth the fee”.
Rio Ferdinand cost £35 million in the early 2000s, and yes, van Dijk may not have reached his level yet. But then had van Dijk been playing in the early 2000s, he may have cost the same. Or slightly more, or less. Rio was cost at the factors pertaining to the early 2000s. Sir Alex knew that, as did Leeds United. Liverpool, Klopp, FSG, van Dijk, Pellegrino, and the owners of Southampton, all know this now. To cite conditions, markets, and retired managers’ effects from long ago is to raise a fallacy.
Fans, media, and pundits alike perpetuate this thinking by not seeing every transfer in its current context. All markets are fluid, and this is why it’s said economics is not an exact science. It really is not. There are so many variables that can affect how ANY market functions. Take Brexit. In May 2016, the pound sterling was doing fine versus the US dollar. Yet from June 2016 onwards, due to the Leave vote, it fell by a large margin. Only now has “the Cable” started to recover and restabilise. Football markets should be seen in a similar manner, as dynamic entities reacting to new, emerging, and present realities.
I admit this piece may read like an essay. I’m not an economist, nor a financial analyst. However, as a football fan, and long-time student of economics and business topics, it makes perfect sense why transfer reg. prices are rising at the rate we’re witnessing now.
So yes, in summation, Virgil van Dijk is worth it. This is an astute signing by Liverpool since it will surely aid their defensive set-up. He may even wax lyrical, like his Roman poet namesake.
marblehallstv 