Scientists say there’s value in the market but overpaying is the new normal

Neuchatel, a Swiss town of just 30-odd thousand people, might not mean a lot to soccer fans. Those with a love of lesser European leagues might recognize local side Neuchatel Xamax as twice winners of the Swiss Super League in the late 1980s and one of the coolest-sounding names in club soccer.

But since the club were declared bankrupt in 2012 and forced to work their way back up the ladder from the regional leagues, they are not the reason why people are paying attention to what’s happening on the shores of Lake Neuchatel. Instead, it is the work of the CIES Football Observatory that is putting the town on the map.

The International Center for Sports Studies (CIES) is a joint venture between FIFA and the University of Neuchatel founded in 1995, with the aim of “overcoming the complexities of sport in today’s society and improving how it is governed and managed across all sports.” The Football Observatory was established a decade later, publishing annual reports of its analysis, which, since 2015, have been replaced by monthly reports on the game.

The latest, No.27, reveals the Football Observatory’s findings on the greatest gaps between fees paid and values estimated for the summer of 2017. Using an algorithm they have developed to “scientifically estimate fair transfer values,” which takes into account age, contract length, goals, domestic league matches, points per game, the division and international appearances to determine a player’s worth, they have analyzed the most recent window’s transfers. It makes for interesting reading.

It will surprise no one that the Football Observatory found that the vast majority of this summer’s business was for vastly over-inflated fees. The lack of surprise continues with the news that Kylian Mbappe’s move from Monaco to Paris Saint-Germain saw the biggest gap – his new owners agreed to pay 87.4 million euros ($104 million) more than his 92.6 million euro estimated value.

By that token, his compatriot Ousmane Dembele looks like a good deal: Barcelona’s 147 million euro man cost only 51.2 million euros more than his 95.8 million euro estimated value. These were by no means the only offenders when it comes to paying over the odds, though.

Of the 20 transfers the Football Observatory listed, 17 of them were deemed to have been overpriced and buying clubs paid, on average, 30 percent more for a player than their worth. That is music to the ears of those who say there’s no value in the market and ammunition for critics when any of the players on the list underperforms.

However, there were three transfers this summer where the clubs paid less than they were worth: Liverpool saved 19.4 million euros on Roma’s Mohammad Salah, Sevilla saved 17.4 million euros on Manchester City’s Manuel Nolito and Chelsea saved 15.2 million euros on Roma’s Antonio Rudiger. There are relative bargains to be had but these are the exceptions that prove that transfer fees are way out of hand.