Football Science

“Brand Transfers”: The Hidden Worth of Players

Today I want to tell you the story of three players - David Beckham, Cristiano Ronaldo, and Ronaldinho. All of them have been the subject of mega-money transfers, one real (Beckham’s transfers to and from Real Madrid), and two rumoured - Ronaldo’s £75m transfer to Real Madrid, and Ronaldinho’s £200k per week deal with Manchester City. A lot of people seeing these figures probably don’t see how such huge sums of money are justified for Ronaldo, let alone the two declining veterans, but for my second post here I’m going to show you how these figures are more than justified.

After Manchester United signalled their willingness to sell Beckham back in 2003, Real Madrid stumped up £25m to edge out Barcelona for his services, and in a four-year stint with them he played in 150-odd matches, scoring around 19 goals - a decent if not spectacular record. But Beckham’s real value for Madrid wasn’t just in his performances, but in merchandising.

During his four years at Real, Beckham’s presence boosted their income from shirt sales and merchandise to £300m, a spectacular 137% increase. A study by researchers at the University of Catalonia has estimated that Beckham’s departure has already cost the club between £24m and £30m over the last year. Some of that money has flowed into the coffers of LA Galaxy, with replica Beckham shirts selling at a phenomenal rate since his move. 300,000 shirts shifted in the first six months of his MLS career alone, which according to my back-of-the-envelope calculation represents is an increase in turnover of $25m. Add to that the increase in attendances at matches in which Beckham plays, and sales of other associated merchandise, and it’s quickly clear that the LA Galaxy mega-deal is far from the insanity that some thought. It’s a commercial decision that makes sense when you realize that the money is being paid for the Beckham brand, not just his performances on the pitch.

The case study in economics that is David Beckham neatly ties in with this summer’s biggest transfer saga, the attempts of Real Madrid to bring Cristiano Ronaldo to the Bernabeu. Reports suggest that Real - a club that has been struggling financially lately in part due to the loss of the Beckham brand - would be willing to part with £75m plus £10-15m a year for Ronaldo’s signature. Over a 5 year contract that would work out at something like £25m per annum, but if the best player in the world can draw the crowds and their wallets, the deal could virtually pay for itself. It’s conceivable that they could not only make their money back from merchandise, but even sell the then 28-year-old for a profit. Whether they would do that of course I don’t know, but the point is that they’re not just spunking money up the wall - there is a sound business logic underlying this.

And of course it’s this same logic that applies to Thaksin Sinawatra’s attempt to lure Ronaldinho to Manchester City. Suggestions of a £200k per week contract sound crazy for a player who appears to be past his best, but that ignores the revenue that a Ronaldinho shirt would generate, and the crowds that he is capable of drawing. In City’s case, there is more at stake, as the club attempts to push itself up to the top table of European football, and compete seriously with the English “Big Four” and the top European clubs. For City, not only would signing Ronaldinho generate revenue, but it would act as a statement of intent - a message that the club is serious both as a football club, and as a business venture.

Regardless of the rights or wrongs of it, football success and business success go hand in hand these days. The bold - even visionary - transfer of David Beckham to Los Angeles has uncovered a new trick that a number of the more astute players in the world football market have very quickly cottoned on to - for an elite minority of players, their spectacular value lies not just in their success on the pitch, but in their ability to generate revenue off it. Beckham’s move was the first of a new breed of “brand transfer”, a business move defined not so much by the vast sums of money paid, but by what is being paid for - the brand. The possible moves of Cristiano Ronaldo and Ronaldinho this summer would be the 2nd and 3rd examples, and if their moves prove to be as financially lucrative as Beckham’s, then we could see much more of this tactic in the future.

Posted in Economics, Transfers | 2 Comments »

The Truth of Beckham’s Contribution to England

Here’s a question for you: who created the most assists in England’s doomed Euro 2008 qualifying campaign? I’ll come back to that later.

Fabio Capello’s choice of David Beckham to captain the England side against the mighty Caribbean footballing superpower that is Trinidad & Tobago has certainly raised a few eyebrows, not least because many doubt whether he can still make any contribution to the team. Personally, I beg to differ.

During the 45 minutes that he played of the U.S.A. game, Beckham created two goals, both from free-kicks. The first was disallowed, while the second was England’s opener, ensuring that they went into half time with a lead, and without a hail of abuse from the temperamental Wembley crowd. This was a bigger contribution than Bentley made, and a far bigger contribution than Lampard (yes, he was playing).

Armchair pundits have a nasty habit of jumping to conclusions based on one or two games, so let’s look at England’s dismal Euro 2008 qualifying campaign. At the top of this article I asked you who scored the most assists for England, but it was a trick question. Actually three people tied with 3 each - David Beckham, Gareth Barry, and Jermain Defoe. Now okay it was pretty obvious I was going to throw Beckham in there, but you really weren’t expecting those three.

So let’s make a table of assists and goals. I’ll include all the players who created assists, and for comparison I’ll add Lampard and Gerrard, and the three primary contenders for Beckham’s place: Bentley, Lennon and Wright-Phillips. it looks something like this (source: ESPNSoccernet):

David Beckham managed to get three assists in just two games, one of which he started on the bench. People generally cite Joe Cole as an example of one of our creative, attacking talents, but even he managed only one goal and two assists in three times as many games. Bentley and Lennon were nowhere (although in fairness Bentley was only played once), while SW-P managed to grab just two goals in 8 games. Gerrard gave us three goals, but Lampard nothing. Statistics aren’t everything, but when we remember the performances it’s hard to escape the conclusion that J. Cole, Barry, Gerrard and Beckham were and are our four best midfield players. And for Beckham to be in that elite group having played just twice is one hell of an achievement.

It’s easy to criticize Beckham, and call him a has-been, but he’s still one of our most productive players. He’s obviously not a captain for the future, but our players in Trinidad & Tobago will benefit from his experience, and from his skill. Capello’s choice is not a bizarre one, nor should it be particularly difficult to understand - the fact that the press are so bemused by it says more about their obsession with the captaincy and its ultimate fate, and their inability to cope with or understand Capello’s lack of concern over the issue.

Critics say that Beckham has lost pace, lost his edge, that it’s time for other talent to shine through. Who? Bentley has yet to impress, Lennon emerged in the Euro 2008 qualifiers with a scarcely audible whimper, and the curse of Wright’s offspring is that he is so incapable of providing what Beckham effortlessly produces when he plays - surgical crosses that slice through world-class defenses. Whether you believe it’s by his own talents, or through the failings of others, Beckham remains England’s best right midfielder.

But Beckham doesn’t just provide what his challengers fail to produce, he provides what England seem to inept at - the killer pass. A pundit recently referred to England’s apparent difficulty breaking down the opposition in open play by commenting that we are in danger of becoming a “set-piece team”. Without Beckham’s free-kicks, we may not even be that. At 33, Beckham won’t be a force for England much longer, and if the likes of Bentley can’t rise to the challenge, we could have a rocky few years ahead of us.

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Welcome to FootballScience

FootballScience is the new sister site of the popular science blog, The Lay Scientist. It’s purpose is to take a scientific look at football, tackling some of the myths, misconceptions and poor reporting around football by presenting the clear facts behind football news. I’ll also be tackling some of the scientific research done on the beautiful game.

Martin

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