Reflective Exercise: Selling footballers: the economic viewpoint
1
What are the economic arguments on whether a football club
should keep rather than sell an important player?
Scenario
Hope City is a Premier League football club playing in Europe next season. It has
had enquiries from a well-known Spanish club for its star player and a figure of £34
million has been mentioned. This player came to the club through its own youth
programme and is now captain of the team. He currently has a number of years to
run on his contract. The club has to be managed as a business. It needs to decide
what to do. Assume for simplicity that the wage bill remains the same whatever the
club does.
Section 1: Setting the framework for investigating this question
Take a note of your responses in your own hard copy
a
b
c
d
e
A. What is the cost to the club of keeping the player?
Which of the following are true? More than one may be.
The value of the next best alternative player in the squad.
The cost the club incurred in developing the player through its youth
programme.
The highest offer the club can get for him on the transfer market. (It
should explore whether £34 million is the highest offer it can get.)
The opportunity cost is the goals and any merchandise sales the club
generates by the player.
What the player would be worth in his next best alternative
occupation.
B. How would you work out whether or not to keep the player?
Which of the following are true? More than one may be.
a If the club has major cash flow problems and urgently needs more
funds it should sell the player, but if it doesn’t it shouldn’t sell him.
b Assess the costs and benefits to the club of selling the player.
c Explore the likely ways in which the club could spend the highest offer
and assess whether the cost of keeping the player more than
outweighs the benefits he brings to the club (such as his contribution to
the team’s success, merchandising sales, etc.).
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Copyright: Embedding Threshold Concepts Project
14/08/07
This project is funded by the Higher Education Funding Council for England (HEFCE) and the Department for Employment and
Learning (DEL) under the Fund for the Development of Teaching and Learning.