Neymar is the talk of football transfer town. French club Paris Saint-Germain cares little where the mercurial striker goes so long as he goes and they get something substantial—cash, players, or both—in return. But only a handful of clubs can offer something substantial for the world’s most-expensive footballer. His two apparent suitors, Spanish clubs Barcelona and Real Madrid, also have expensive players who have ceased to fit into their plans. For all three clubs, money matters—and it doesn’t.

That’s because they have a stash of it. So, in their financial construct, how much they spend on players, and the footballing return they get, matters less than it does to even clubs a notch below them, let alone several notches below them. PSG paid 222 million euros for Neymar two years back, but is now sitting on an asset that has plateaued in value.

Players are to a football club what a manufacturing plant is to a steel company: assets. How do the elite footballing clubs compare on player asset value? How much of that asset value is acquired by the club and how much is incrementally created at the club? These two attributes give a measure of how different elite clubs approach player acquisition, and they make for interesting reading across the top 12 clubs in Europe.

Transfermarkt.com, a portal on footballing information, gives data on the market value of players. As of August 13, the squad of Manchester City had the highest player market value, of 1.27 billion euros. This is what the club would expect to realise if it decided to sell all the 25 players in its squad. The 12th ranked club, Arsenal, has a player market value of 675 million euros—nearly about half of that of City.

Here’s where it starts to get interesting. City is the equivalent of a company that is endowed with financial resources, and is more focused on maintaining its clout and less in player value appreciation. In this set of 12 clubs, it ranks only ninth when one looks at the share of appreciation in player value in its total player market value.

About 309 million euros, or 24% of City’s market value, came from appreciation in the market value of its players over their purchase cost. By comparison, 60% of the market value of the current Tottenham Hotspur squad comes from appreciation in player value. This is, in a sense, value created by the club, and it can monetise it for itself.

At present, none of the top five clubs that paid the most to assemble their squads—Manchester City, PSG, Barcelona, Manchester United and Real Madrid—are leaders in player value appreciation over purchase cost. None feature in the top five by the highest share of player appreciation in their total player market value.

It’s the clubs that lie half a notch beneath them that are leaders in creating value. It’s led by Tottenham Hotspur, followed by Bayern Munich, Chelsea, Liverpool and Atlético Madrid. Tottenham, for example, is valued to be sitting on 593 million euros of appreciation on paper (against its squad cost of 391 million euros) and Liverpool 527 million euros.

Such clubs are fertile poaching ground for the super-clubs above them, the latest blockbuster move being Eden Hazard from Chelsea to Real Madrid. The likes of Tottenham, Liverpool and Bayern are also relatively more sensitive to player cost and value, and operate in a different financial construct than the clubs above them.

One measure of this is how much premium a club is willing to acquire players from the open market. For its current buys, PSG paid an average premium of 15 million euros per player—much of it on Neymar and Kylian Mbappe—over the then-estimated market value of its players. City is in a similar range. At the other extreme is a Bayern Munich, whose current squad was collectively bought at a discount to their then-market value and it also spent about one-third of what City spent to buy players.

Transfermarkt assesses a player’s value at three points in time. Two of them are purchase cost and current market value, as captured above. In between these two points, it also assesses a player’s market value after he joins a club. This is generally above the purchase cost, the bump being the result of a promotion.

The ability to add more value to this metric is precious. City has added an average of 29 million euros per player. Similarly, Tottenham has added an average of 21 million euros. The difference is while City did that on a transfer spend of 872 million euros, Tottenham did on 368 million euros—a superior return. Each is a juggernaut, and they roll in different ways.

Data source: Transfermarkt.com

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