Identification of Factors Determining Market Value of the Most Valuable Football Players

Abstract

Purpose: The problem of identifying the most important determinants of the market value of football players is quite well described in the literature. There are many works that try to identify these factors. Some of them are focused on variables to make a set complete and others are on models and methods. The aim of this article is to present the variables influencing the valuation and to build an econometric model valuing footballers playing on the forward position, taking into consideration the assumptions of the econometric modelling. Such an approach indicates managers as other sources for obtaining information.

Methodology: Econometric models were used to verify the hypothesis formulated in this research. The database was created on the basis of variables presented on the website www.transfermarkt.de that presents the values of the most valuable football players in the world playing on the forward position. The Gretl program was used in the research.

Findings: The literature review showed that there are many independent variables having an impact on the value of the player. There are also many different models used to valuate footballers’ performance rights. The results of estimation of models in the research indicated that such factors as Canadian classification points adjusted the market value of the team and dummy variables describing “goodwill” (only for the best players) had an impact on the market value of footballers’ performance rights.

Limitations/implications: Information about different factors having an impact on football players’ market value could support the investment decision process of football managers. Originality/value: The results were part of a study concerning economics of sport, particularly processes of management of football clubs and valuation of intangible assets.