Are there still bargains in soccer? Is Leicester City this year’s Southampton?


Part I – Overview

World soccer has for the last 20 years been increasingly dominated by the bevy of giants with inexhaustable wallets of global  billionaires from the Agnelli family’s Juventus and Berlusconi’s Milan teams in Italy through Florentino Perez’s Real Madrid (shoutout to the infamous Atletico Madrid ex-president Jesus Gil y Gil), the various American conglomerates that own EPL’s largest teams, Roman Abramovich’s Chelsea and the new PSG owners.

Given that there’s no salary cap in soccer, it would seem like a foregone conclusion that these biggest clubs in the world would be able to pillage all of the less fortunate teams for talent. That by and large has been the case with numerous excellent developmental academies masquerading as professional soccer teams (Ajax, Porto, Sevilla, Benfica, various smaller French teams, and sadly my beloved Borussia Dortmund) churning out many of the top players for the upper echelon of teams, th usbriefly getting their moment in the sun for a season or 2, only to inevitably sink back into the ocean. 

This Bloomberg article with the telling headline THE BEST SOCCER CLUBS WANT PROVENT PLAYERS, NOT HOME-GROWN TALENT does a nice job of laying out in detail the shifting focus from developing players to just outight buying them.

 

In this age, where clubs are worth well over 500 million $ (again according to transfermarkt here) and have their own channels featuring full length u-16 matches and the best goals from 8 year olds can be viewed instantly all over the world,

 

perhaps it’s reasonable to wonder  whether cheap, young talent is just too HARD to find. Especially, when the biggest clubs can just sign them at 7,  8-9 years of age.

With so many teams making exorbitant sums from merchandise sales and global TV contracts, world soccer has perhaps never been more competitive in the business sense. Major League Soccer, which has never been a particularly exciting or relevant league has just signed a TV deal for $720 million, while the English Premier League deals by Sky Sports and newcomers BT Sport were 8 (domestic) or 13 (international) million, as per the Washington Post.

So, is soccer doomed in some sort of big fish-little pond scenario?

The answer is not as simple, as one might think. While surely there are leagues like the Bundesliga, where despite the flashes of the now publicly traded Borussia Dortmund (view the ownership structure here ) in the  90s and since 2010, Bayern’s triumph is  but a fait accompli. Or, the Spanish La Liga, where it’s a two horse race between Real and Barca (with apologies to the 2000 Valencia, 2005-08 Sevilla and last few year’s Atletico Madrid teams – all examples of great talent development and successful bargain hunting). On the other hand, there is the EPL, where 6 teams have won since the inaugural 1992-93 campaign, and there are always 5-6 teams competing for the title. It is also not a coincidence, that 5 of the 10 most valuable clubs are English according to Transfermarkt, and one can suspect this sort of parity as one of the reasons behind the massive popularity of the league worldwide. Gone are the halcyon days of the 90s Italian Serie A, as it has perhaps become the polar opposite of the EPL, since political and match fixing/ referee scandals (AC Milan, Juventus, Inter) and/or bankruptcy (Parma) have demolished the popularity and image of the league. In this post-apocalyptic wasteland, it’s literally anyone’s title to win year-to-year (although Juventus have been dominant) – a bizarre sort of parity that I’m sure the Italians would love to change. 

 

Part 2 – Going Forward

So we have seen  the ever-changing nature of ownership and fortunes, now let’s review some interesting developments and teams that seem to defy the odds of limited budgets and exceed expectations.

Many of Arsene Wenger’s Arsenal teams would qualify, before the Frenchman started drinking too much of his own KoolAid, and forgot that much like in the NBA and the NFL, nobody is perfect at picking out talent. Or in other words, sometimes you land Patrick Vieira and Thierry Henry, other times it’s Andre Santos and Kim Kallstrom. Sadly, in Wenger’s case this situation was compounded by ownership empowering him his own bizarre Martingale strategy (a gambling system of continually doubling the stakes in the hope of an eventual win that must yield a net profit.), as he kept increasing the stakes and whiffing on more and more players. I mean, can you name the last great bargain signing Wenger has made? (Alexis Sanchez, and Mesut Özil don’t qualify, as they were change of scenery guys that blossomed at Arsenal).

Maybe we are being too harsh on poor ole Arsene, as the rest of the managers/clubs are either not willing (since Real, Man. City, Chelsea and formerly AC Milan could just overpay 2-3 years down the line) to scour the thrift shops of international soccer, or have been equally unsuccessful.

For a more successful and different approach, we can look at Juventus last year, as the club rode their excellent bargain bin shopping strategy of used parts (Pirlo, Tevez, Morata, Simone Zaza etc) all the way to the Uefa Champions League final and an easy Serie A title win.

In this year’s EPL, the joy ride and rejuvenation of Claudio Ranieri’s Leicester City with stars like Riyad Mahrez, and feelgood story of the decade Jamie Vardy, has been well documented. Vardy,  who essentially played non-League football until 2011 was signed for 1 million pounds in 2012 by Leicester City. Oh btw, he has 14 goals in 14 games this year and just broke the EPL record for most consecutive games with a goal with 11. He is basically the consensus player of the year, and at age 28 is valued at 6million Euros according to Transfermarkt. Riyad Mahrez, who is probably the runner up with 7 goals and 6 assists, signed for 500k Euros in 2014 from French 2nd division side Le Havre. At just 24, he is currently (under)valued at 11million.

On Saturday, when they took the field against Manchester United, MU had 17 players valued higher than Mahrez’s current value of 10-11 million! The other staggering tidbit was that MU spent over $100 million on 5 players (Schweinsteiger, Schneiderlin, Depay, Darmian and Martial) and have scored 20 goals this year in the EPL, while Leicester’s duo of Mahrez have scored 21 for $1.5 million.

If you are looking for a comparison for the Foxes, look no further than Southampton, historically a transient between the EPL and the Championship, who made a surprise run all the way to 2nd at one point, and finished 7th last year and 8th the year before, despite selling Luke Shaw and Schneiderlin ( to MU), Adam Lallana, Nathaniel Clyne and Lovren (to Liverpool) and Calum Chambers (to Arsenal) for a combined $175 million! (details here)

The ending of Leicester City’s season is yet to be written, but the Foxes are tied for 1st place with Man.City after 14 games, despite the fact that MCFC are worth 5x more than LCFC. In some sense, they are playing with house money at this point, as Ranieri’s boys and ownership have already proven that their remarkable season is for real.

What do you think? Who is in your best bargain XI?Let us know in the comments.
 

 

 

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