We love City, and marvel at the club's sporting quality, but must also acknowledge that MCFC is a business. The difference between top tier athletic organizations and other valuable businesses is that the primary asset of a sporting operation is a relatively small group of valuable employees/performers - the players. For the duration of this piece, I will discuss such players in terms of commodified assets, bought, held, and sold to enrich their bosses - in short, a stock market where players are the currency.

In world football, players are acquired in three basic ways: signed as free agents, developed through youth programs, and - the focus of this article - purchased on the Transfer Market. The MLS has an amateur draft, like most North American sporting organizations, but this an exception to a near-universal rule.

Players registered to a FIFA-sanctioned club are eligible for transfer domestically and internationally. In short, a player’s contract is not absolute - with the consent of the club and the athlete, the “rights” to the player are sold to another club, which is then able to negotiate a new contract, as the player’s prior deal with the selling club is null and void.

With no draft picks or an explicit salary cap (however, Profit and Sustainability Rules and Financial Fair Play do impact these decisions) transfers hinge on the “fee” - the cash compensation which the acquiring team offers the seller in exchange for the rights to a player. Much is made of such sales, for good reason. Clubs can quite literally spend themselves into points deductions and financial sanctions. Conversely, smart sales and bargain acquisitions can turn a club around. Brighton has worked itself into European contention by selling promising talent to “big clubs” and turning around to buy solid pros from lower profile Continental teams with those funds. The difference between sale profits and outgoing transfer fees is a club's “net spend” - a simplistic concept that gets far too much attention, in my opinion.

Case in point: From 2017-2020, Bayern operated at a net spend loss of 100 million Euros.

Moneyball journalists recoil in horror. “Sell!”, they cry. “This is not sustainable!”

However, this spending spree brought in Alphonso Davies, Lucas Hernandez, Benjamin Pavard, and Kingsley Coman, among others. Their biggest sale was Douglas Costa, who was nearing the end of his top-flight career. They won the league in all three seasons and the UCL in 2020. I imagine they were happy with the outcome of their financial management. And, not ignoring the business side of things, shouldn't we look at how the extra income generated by such consistent results offsets the expense of transfer fees?

So, believing that the bottom line of the basic transfer balance sheet is not a true indicator of a club's business acumen, I'm trying to conceptualize player transactions in another way.

If, like Bayern in my example, a club spends to add quality while also keeping what they have, their net spend will quickly go negative. Does this mean the club is run badly? And while a club that consistently makes more than they spend on the transfer market will be profitable, can this be tied to sporting success?

Well, here are the most profitable sellers on the transfer market among current big-5 league clubs, from 2015-2024 (€ million). Simply, they have made far more selling players than they have spent bringing in new ones. All balances are from the Football Observer’s “Global Economic Analysis of the Transfer Market.”

SL Benfica € +816 M

AFC Ajax € +473 M

RB Salzburg € +401 M

LOSC Lille € +391 M

Sporting CP € +345 M

AS Monaco € +305 M

FC Porto € +296 M

SC Braga € +279 M

Dinamo Zagreb € +255 M

PSV Eindhoven € +250 M

AZ Alkmaar € +224 M

FC Nordsjælland € +219 M

KRC Genk € +211 M

Udinese Calcio € +208 M

Atalanta BC € +206 M

And on the other hand, the biggest markets “losers” each have major successes or massive improvement over the same timeframe:

Manchester United € -1304 M

Chelsea FC € -1209 M

Paris St-Germain € -991 M

Arsenal FC € -795 M

Tottenham Hotspur € -711 M

Manchester City € -703 M

Milan AC € -633 M

Newcastle United € -626 M

FC Barcelona € -601 M

Al-Hilal SFC € -556 M

West Ham United € -548 M

Juventus FC € -526 M

Aston Villa € -521 M

Bayern München € -442 M

Al-Nassr FC € -384 M

Yeah, they buy more than they sell. Does that equate to bad management? Not if you are in the business of winning and willing to look at income streams apart from player sales. So, I'm attempting to find another approach, one that frames player acquisitions as investments, with some players expected to lose sale value, but help win games along the way, and others meant to be “flipped” - more valuable to the club as an asset to sell than an on-field performer.

The very existence of these proceedings and the ideas that underlay them casts the players as commodities. It is a stark, perhaps even dehumanizing, reality. A player is a corporate asset, and with peak careers being relatively brief, a depreciating asset at that.

Clubs gain and lose fortunes through transfers, but also on a player who sticks around. A star who was brought in for $50 million when he was 24 will not sell for the same price when he leaves at 31. “Value” in terms of the club's investment simply vanished as he aged and became less desirable as a transfer target. Poor performance accelerates the process. Real Madrid laid out 100 million for Eden Hazard only to watch it evaporate in less than four seasons as his injuries and poor form lead to his retirement and therefore no sale to recover the investment.

But here is where good management and a club’s ambition come into the equation. If Hazard had played at his top level for those four years and starred in Champions League wins, no one would complain. Similarly, we paid 65 million for KDB and will certainly not get that back when he goes, whatever the circumstances. But that is a very gradual loss considering he has been here 9 years and amazing for the vast majority. Also; Istanbul!

This train of thought is what led me to the following analysis. I want to look at how successful a team is in terms of getting value for the money, and acquiring players who succeed in the long term, or at least, like Julian Alvarez, might yield a big profit after proving to be worth more than their purchase price.

The Hazard debacle and Chelsea's acquisition of Marc Cucurella are examples of what we don't want. Brighton being tough negotiators and Todd Boehlys free spending attitude drove the fee for Cuca to 65 million, but just three 3 seasons later, he's valued at 31. We can safely call this a poor play in the Market, as we see a significant, rapid loss of value. Worse, the operation has yielded an average performer on the pitch, so the loss is difficult to justify in sporting terms. (Cuca has a 7.0 Opta rating in 48 EPL appearances thus far.) They also sold Ian Maatsen, who was homegrown and successful on loan to Dortmund, because they believe they have found their full time LB in Cuca. They did get 43.5 mil for Maatsen, but overall, that's a net spend loss of over 20 million, to import a player over keeping a homegrown option at the same position. Is cuca 20 million dollars better? (To answer my own question: not really. Maatsen had a 7.3 Opta and 4 goal contributions in just 16 starts with Dortmund, and was a nailed-on starter from the Burnley team that got promoted.) And the “transfer math” makes it worse. Ian was homegrown, and valued at 37 mil; a number likely to go up since he's 22 years old. Chelsea could have him on the books, creating unrealized dividends. Instead, they have a net spend of negative 20 million at a single position, an asset that's shed half its value in just two calendar years, and an adequate player. This, besides the benching and subsequent de-valuing of Ben Chillwell, yet another established option at the same position. In fairness, his injury record does factor in greatly.

Regardless, it’s not great business. I'm hoping to find that MCFC does better. I'll be looking at the whole squad, not just the moves at one position. I just needed an example and took the chance to speak poorly of a rival in the process. I am who I am, is what I'm saying.

All this preamble, I hope, explains the 3 categories I looked at:

• Purchased player SHIFT - current senior players acquired on the market, how they've gained or lost value and over how long
• FLIP VALUE - total gain/loss on players bought/promoted and sold relatively quickly. I set the time frame from 2020 to the current season.
• HOMEGROWN VALUE - combined value of academy players now in the senior team

But before I get to my beloved spreadsheets, a word on “valuation” - the concept at the core of this math. We see it virtually every time we glance at a click-bait headline: “Club X makes move on $65 million phenom!” “Manager tipped to drop $31 million rated keeper by Pundits!” These price tags are the player valuation. Simply put, this number is a general agreement on what a certain player is worth as a transfer target. The consensus top 10 are about what you’d expect:

1 Jude Bellingham, 21, €180m

2 Erling Haaland 24, €180m

3 Vinicius Junior, 24, €180m

4 Kylian Mbappé, 25, €180m

5 Phil Foden, 24, €150m

6 Bukayo Saka, 23, €140m

7 Florian Wirtz, 21, €130m

8 Jamal Musiala, 21, €130m

9 Rodri, 28, €130m

10 Lamine Yamal,17, €120m

This is not what these guys are paid, or what transfer fees they have cost their clubs thus far. It is a starting point for a buying club if they open negotiations to acquire this player right now.

Several factors impact this rating. Ability is obviously at the top of the list and requires no explanation. Age is perhaps second most important. Rodri is the oldest in the top 10 at 28, and 30-year old Harry Kane is the oldest in the top 20. Clubs will pay more for a player with the potential to be around for a long time. The remaining contract the player has with the selling club is also key; if you have a 20 goal-a-season striker who is 25 and signed for three more years at 120k a week, you must measure the value of that against the potential income of selling him. Basically, are you competitive now, with him, or more in need of the funds generated by his sale? It will take more money to pry such a player away from his club.

There is also a bias towards goal-scorers; Rodri is the highest rated “defensive” player on the list, but had 17 goal contributions and 4.8 shot-creating-actions per game last year. Would he be this high if not for that aspect of his game?

Intangibles such as reputation, marketability, and potential also factor in. Lamine Yamal has a strong Euro performance and 45 LaLiga appearances on his resume. Clubs would be paying 120 million for the player he will become, not the one he is. And as supporters of an EPL club, we’ve heard of the “English tax” - the extra cost Premier League teams expect to pay for a genuine Englishman - such an acquisition helping reach the homegrown quota and the marketing potential of a “local boy.” Declan Rice, our eyes are on you.

And there is always the chance of simple, cagey negotiation and good timing. City got Haaland for a third of his valuation because they paid a release clause the second it was permissible. On the flip side, Barca paid 142 million pounds for Coutinho because they were desperate to pry a perceived superstar away from Liverpool, who in turn kept upping the ante.

So, in short, valuation is what the sporting world in general believes a player is worth as a transfer target. It’s not his automatic price, but it is a conversation starter, and often the number referred to when the announcers talk about a “billion dollar squad.” The process of valuation is complex and ongoing, with potentially enormous fiscal consequences for huge businesses. It has gotten so that there are dedicated valuation companies that a club may consult to get a baseline value, and even the world's leading financial consultants offer valuation services. Mercer Capital Group has a dedicated player valuation department, for example.

With all of that hopefully established, here’s how I break down the current City Squad (fees and values in millions of Euros, from transfermarket.com):

Purchased Players

Note: I'm ignoring Gundo’s year in Barca. It was a free transfer both ways, so it doesn't impact the math enough to justify the hassle.

And here are the “rated”players currently with the first team, having come through the City youth program. Players with few appearances or still in the developmental squad might not yet have a consensus valuation.

Lots here to digest. First, most of our “losers” - players who have shed value - are veterans whose value declined as they aged but they still perform; Kev, Walker, and Stones. Essentially, assets which City leveraged on the field rather than in the market. We will resell them at a loss, see them leave on a free, or watch them retire - but we certainly got our money’s worth. It is however indicative that a squad refresh is imminent. Regular starters at the end of their prime, as indicated by their market shift. Still, the squad is worth 51 million Euros more than was spent to assemble it, despite the “losses” incurred by keeping the old guard around.

Nunes is an exception, as a premium buy who is currently playing back-up minutes. A little soon to yell “flop” but I’d like to see him put in a few shifts while Rodri is injured and pump up his value, just to be on the safe side. If he isn’t going to feature, the best case scenario is for him to be a valuable asset for sale.

The elephant in the room is Grealish. He is now valued at 56 million Euros less than we paid for him. With Kalvin Phillips currently on Ipswich’s books, Jack represents our biggest loss by far. However:

1. His current valuation of 62 million is nearly equal to what his actual market value (65 million) was when we bought him.
2. His goal contribution numbers, though lower than what many of us hoped for, are not far off what he was producing at Villa. 34 G+A in 133 appearances for City, versus 73 in 213 for Villa. That’s 0.26 per game and 0.34 respectively.

These numbers bring us back around to the intangibles that impact transfer prices. We went about 50 million over the consensus market price for a player. Bad business? Maybe. He was essential in finally winning the CL, so some would say that alone is worth it. But I’m being analysis-brained here, so let’s look beyond that.

He was his old club’s best player by a fair margin. It would take a compelling offer, over market, to pry him loose. Accepting was a good idea by Villa, as the agreed fee has financed a lot of their reinvention into a European-level contender. Jack is also eminently marketable, as a model, DJ, national team regular and a Pop culture celebrity with a generally positive public image. Expect to pay more for such players. Real Madrid spent 59 million Euros (inflation adjusted) for David Beckham, and he was older at the time than Jack is after three championship seasons - not to mention he was publicly known to be seeking an exit after falling out with his legendary manager. Jack also counts towards the “Homegrown Quota” imposed by the league, which demonstrably ratchets up the sale price of UK-born players within the EPL. Finally, Pep was known to greatly desire the transfer, which likely gave Villa the impetus to raise the price even further.

Personally, I believe it was a good buy, both because of the success since he’s arrived and how efficiently the team operates when he is on the field. I’d argue, without scoring that often himself, he makes the attack and transition-game hum in a way that few others can replicate. (There’ll be a future post to support this claim; demand the numbers from your pundits!).

A similar situation with Josko Gvardiol. He was a red hot commodity after his 2022 World Cup performance and a strong showing with Leipzig in the 22/23 Champions League. Lots of clubs were interested, so he became the center of an eBay-style bidding war. Being still just 22 years old and with his recent form, he could make up the deficit in future valuations.

Young, high-profile additions such as Josko and Haaland drive the squad's value up. Even newer talents, like Savio, project to do so in the future. With these offsets to the declining sale value of our aging core, our purchases are worth more than we paid for them. With new valuations happening monthly, this indicates that our transfer targets largely perform on the field, and should financial circumstances demand player sales, we will be in a strong bargaining position.

Couple this with the incredible value of the homegrown contingent and both City’s business acumen and talent development shine. 222 million Euros worth of talent that cost the club room, board, and coaches’ salaries.

Looking at the homegrown players together with those purchased, we have strong assets to either put on the field or transfer out as revenue. Veterans who gained value here, like Akanji, are obviously useful as players right now and offer potential revenue in a near-future sale. A new, rising “stock” like McAtee can improve for a few seasons here - and if never quite hits the standard to be a regular, he will only gain sale value in the future.

This is the path Ferran Torres took, which brings me to the final metric, the “flips.” Some guys come in and don’t quite fit, think they can get more playtime elsewhere, or just want something their club can’t promise. Such a situation needn’t hurt a team, especially one with City’s reputation for nurturing talent. My Flip Transfers are players that City bought and resold within the period of 2020-2024 or academy players making their senior debut and being sold inside the same timeframe.

MCFC kills it here. Gomez was a case of aim small/miss small. The rest are terrific business, including Palmer. 47 million Euros for an essentially-unproven player; we may have missed out on his on-field production, but we also sold a commodity for funds that will eventually finance the replacement for depreciating assets. The Stock Market metaphor works better if you think about it that way.

All of this sounds good, I hope, but it's pretty meaningless without context. Accordingly, I picked two teams for comparison; Bayern Munich and United. Bayern, as I think they have a profile similar to City’s: perennial domestic success and a recent UCL win, with cash on hand to make big transfer moves. United because they are in the midst of a long run of what is widely perceived as bad transfer business, thus making for an interesting contrast to City and the Bavarians, both currently having good runs in the market.

Purchased Players

City, take notes. Bayern does great transfer business. The current first team has only Neuer as a substantial loss, and he has been around forever, playing at a high level. There are lots of players who haven’t shed value yet, offering a great squad or assets for sale. Basically, the squad refresh on City’s horizon has already happened. They replaced the aged-out generation of Lewandoski, Robben, and Ribery with valuable, younger players.

Bayern also has more free agents in the squad, with Goretzka and Laimer especially racking up minutes. City has only back-up goalkeepers acquired on frees. A player who costs nothing but his salary can be released at no loss or sold as straight profit, regardless of what he yields at the time, and adds squad value at no cost.

A last note on this chart - good lord, Musiala is a rewarding piece of business. They took a 200k flier on a lightly regarded Chelsea youth player, who is currently worth 130 million. He accounts for 36% of the squad value vs. transfer fee surplus that Bayern currently enjoys. They can keep him around and get incredible play, or sell him and finance a full year of transfer business. I hope the scout that recommended him got a bonus. Those scouts also found some quality for the youth program.

Speaking of Matthijs, Man United paints a somewhat different picture than the two previous clubs:

Purchased Players

The combined losses on Antony, Casemiro, Maguire, and Mount equal 228.65 million. That money is just gone, as none of them seem likely to demand a release price much above their current valuation. Making matters worse, the losses are rapid, and not stretched over long periods of good play. Shaw and Lindelof also shed significant value, but have been around a long time. Onana has been good at times, but a keeper in a poor defense is going to lose value, owing to the optics of unflattering scorelines. In all, the club has lost a quarter of a billion dollars on transfer value alone, due in no small part to player underperformance.

Making this number worse is a tendency to radically overpay for these underperformers. Antony’s eye-watering 95 million Euro fee was paid at a time when he was valued at 35. His drop to 20 wouldn’t have seemed so bad at that price. But Ten Hag wanted him, and United was looking for an attacker in a sellers’ market. Casemiro was valued at 40 when United spent 70.65, and Maguire was worth 50 when they dropped 87 for him. Reputation drove up both fees, with the Homegrown Tax and National Team reputation also factoring in Maguire’s case.

On a much brighter side, the United Academy is terrific. It has provided three first team regulars and several quick sales to offset the other, poorer business. Three Academy grads as regulars is impressive, and creates value that can be leveraged in the future. The Academy output would be absolutely elite if Mason Greenwood was a better person.

That is not to say the Flipping has been good here. Van de Beek and Varane were both purchased at premiums and moved on from quickly, at near-total losses. Varane was good when he played but was often injured, whereas VdB played 748 minutes for United over 5 EPL seasons, scoring twice. For these two players, United lost the equivalent value of William Saliba. Given the relatively quick turn-around on these losses, it seems MUFC doesn’t so much flip assets that don’t work out as they absorb losses on bad decisions. Again, this is somewhat offset by Academy sales, but the club has still lost 67.35 million on in-and-out transfers. Succeeding in only one of the three metrics here perhaps explains why the biggest spending, highest -salaried club in the world hasn’t fielded an elite squad in some time.

Anyway, I hope this has provided a little more insight into the business of transfers beyond the (I feel) under-descriptive math of single-season Net Spend. By stretching the numbers out over a longer term and separating different aspects of the business, I intended to provide a fuller picture of how some clubs achieve and maintain a stronger position over time. MCFC has done great, but a time of tough decisions is coming as several assets are near the end of their market viability. It sucks, but that’s the business. Ask Kun and Fernandinho; legends who were dropped like rocks when they weren’t up to the standards City demands.

Not that I believe my system to be flawless, but I will close with this. Factoring in the realized gains and losses of player transactions with the proscribed value of current assets, United has lost 127.8 million Euros due to player decline, overpayments, and questionable acquisitions. This is before operational expenses and player salaries. In the last five years, they have finished 3rd, 2nd, 6th, 3rd, 8th and are currently 14th, winning an FA Cup and an EFL Cup along the way. Bayern is at a positive 447.55 million Euros by the same metrics, is currently first, with four league titles and a third place finish, a Champions League, a Club World Cup, a UEFA Supercup, and three German Supercups along the way.

… and as for the Noisy Neighbors, they are currently second, with four EPL titles and a second place, their first ever UCL, a Club World Cup, the UEFA Supercup, an FA Cup, an English Supercup and the ultra-prestigious Carabao Cup. In all of this, smart management has resulted in a 416.8 million gain on player value alone, before a dime (or whatever the Euro equivalent of a dime is) of TV money, endorsements, or merchandising. To that, I say, “Come on, City!”