Chelsea: €58M for Kaká

Chelsea would have to fork out €58 million for Kaká: that`s the price evaluation put on the Brazilian by a university, which has solemnly calculated what Chelsea (and Real Madrid) ought to pay for him.

At University of Navarra, a group of researchers in economics, sport and 'intangible` has created a methodology to estimate the transfer price of footballers.

According to this study, a 1% increase in a players media value translates into a 0,5% increase in price. We are surprised at this conclusion: we would have assumed that the price elasticity of a player`s media value would be higher. Other factors entering into the methodology are the media value of the buying and selling club, and the age (presumably according to a bell curve distribution) and nationality of the player, according to factors that are easy to imagine. Surprisingly, what is not mentioned is what should be the most basic factor in determining the value of a player: length of time left on his contract.

The converse of this methodology is that, when a big club willingly sells a player, this translates into a devaluation of the transfer fees, as such a sale is an indication that the player does not satisfy the big club`s sporting requirements. When that sale, however, is against the club`s wishes, it will push up the price as an indication of the player`s value on the pitch.

As for the nationality of the player, the methodology suggests that should the player and buying club be of the same nationality, the price will go down. This clearly does not apply in England, where the supply of English players has become so limited that any transfer involving an English club and an English player sees a significant increase in transfer fees. However, apparently South American players plying their trade in Europe tend to be under-evaluated those that are of African origin obey a different logic.

This methodology explains why the big clubs end up entering into competition for a rather limited number of players, and that all involved end up pushing the value of transfers, if only because the fact that a big club is interested in a player will hike up that player`s media value.

Applying this methodology to a concrete case, the researchers conclude that, should Chelsea want to buy Kaká, they would have to pay €58 million. He would be €3 million cheaper for Real Madrid, with the difference explained by Madrid being a rather more well-known entity than Chelsea, and Chelsea (as a destination in England) slightly less attractive than Madrid.

For those who have borne with me until the end of this piece, I should point out that this is a purely hypothetical exercise: there is no indication whatsoever that Chelsea are interested in Kaká. But, if they were, his price tag has, conveniently, already been calculated.

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