Business Metric: Ed has fleeced the Glazers

[TheLord]

What is the best metric for judging 'good spending' clubs? I know there is no perfect solution, and there will always be a lot of debate on whether players are worth the money spent. A composite metric that incorporates a large number of variables would probably be very accurate but is very difficult to calculate.

One easily computable metric is the difference between the total market valuation of all the players and the net spending of the club - the business metric. This is a good surrogate for assessing the 'economic side' of transfers - the higher this value, the better the overall deals. For example, if United buy Sancho for £108m today, and United want to sell him next summer, we'd still be able to recoup every penny and more. So even though the net spending increases enormously, the business metric remains relatively unchanged. If Liverpool buy Salah for £40m and transform him into a £100m player (current valuation), that is better still. But if a club buys a player for £50m and is forced to sell him for a measly £20m in two years' time, it is a disastrous transfer.

This metric is extremely easy to compute and is a much better index than gross spending or net spending, in my opinion. For calculation purposes, a 10-year period seemed reasonable (2011-2020). Only the top seven big PL clubs were included in the calculation.

The new Business Metric

Net spending in the last 10 years (a)	The current market valuation of the squad (b)	The new "business metric" (b-a)
Manchester City: £867m Manchester United: £814m Chelsea: £410m Arsenal: £380m Liverpool: £335m Everton: £271m Tottenham Hotspur: £135m	Liverpool: £986m Manchester City: £933m Chelsea: £832m Manchester United: £719m Tottenham Hotspur: £697m Arsenal FC: £582m Everton FC: £441m	Liverpool: + 651m Tottenham: + 562m Chelsea: + 422m Arsenal: + 202m Everton: + 170m Manchester City: + 66m Manchester United: - 95m (minus!)

United are the only top PL team that have spent more in the last decade than the total current valuation of our players, which means our players valuations’ have depreciated significantly in recent years. Players like Pogba, Maguire, Fred, Lindelof cost a lot of money to buy, but their stocks have since plummetted. Our spending is even worse than Manchester City's. City’s squad is more valuable than ours despite similar net spending. Liverpool have done the most amazing business in the last decade, buying inexpensive players and transforming them into expensive assets (Salah, Mane, etc). Chelsea get a lot of stick for spending extravagantly, yet they have a superior business metric than even Arsenal or Everton! Liverpool, Chelsea, and Spurs are not as wasteful as United or City.

Our overall ranking in the PL is much lower than #7 shown in the table, but I have only included the traditional top PL clubs (Wolves, Leicester, etc. are excluded).

We have wasted a walloping £0.75 billion more in building our squad compared with Liverpool! Forget one, we could buy seven Jadon Sanchos with that money. Ed has fleeced the Glazers!

 

[Teja]

Nice to have numbers, but it's been pretty obvious that our transfers have been shambolic. I think we've gotten better though, curious to know what the numbers are like over the past three years for example.

 

[NoLogo]

I have been saying this for a while but we are one of the very few clubs where players actually get worse over time. We need to review our training methods and staff and take a long hard look at what other teams do to improve players.

It also couldn't hurt to take a look at players we actually baught and sold during that time frame. I doubt we would fare much better but I since the numbers from transfermarkt are just guesswork, some actual hard numbers couldn't lend some more credence to this metric.

 

[TheLord]

Nice to have numbers, but it's been pretty obvious that our transfers have been shambolic. I think we've gotten better though, curious to know what the numbers are like over the past three years for example.

I haven’t done the maths, but I don’t think we have improved significantly in recent years. I don’t know of a single “expensive” sale in recent times, nor of a single “inexpensive” purchase whose value has surged. We made have made losses in every single high profile sale (except academy) - Romelu Lukaku (lost 9m), Ángel Di María (lost 10m), Henrikh Mkhitaryan (lost 8m), Memphis Depay (lost 16m), Daley Blind (lost 1m), Shinji Kagawa (lost 7m).

I don’t think we have made a sizable profit on any player this decade. How that is even possible is beyond me. You have go back to the Ronaldo sale in the last decade to find any sizable profit. Every other top club in the PL has done better in this regard. I don’t know if I missed any player, but those are startling stats.

 

[Annihilate Now!]

What is the "current market valuation" based off?

Also worth noting that two of our top 5 players that we could get the most money for (which in my mind is Pogba, Martial, Rashford, Martial and Bruno) were free/homegrown

 

[Ali Dia]

All those clubs have a DOF/CEO who leads. We’ve flopped between Fully backing managers one month and sacking them a few months later. Much more player power here. The club is way behind from the top on down. The academy is our one saving grace

 

[TheLord]

What is the "current market valuation" based off?

Transfermarkt.com valuations.
May not be perfect, but I don’t think there’s a better reference.

Also worth noting that two of our top 5 players that we could get the most money for (which in my mind is Pogba, Martial, Rashford, Martial and Bruno) were free/homegrown

Pogba and Bruno were expensive recruits. But yes, if a club can develop elite develop players from scratch (like Greenwood), the business metric would be better for that club.

 

[Jibbs]

Just goes to show how shambolic our management and decision making have been.

 

[Crustanoid]

It would be good to get this out onto Twitter - every bit of info that spells out Ed's failures should be widely visible

 

[Bobcat]

Good read, but i would recommend another metric (if you can find it), market valuation in 2010, because not all the clubs started out on equal footing.

Not that it would make Ed look any better though, because i bet we would be top in that ranking in 2010 and would make Ed look even worse

 

[Bubz27]

Nice to have numbers, but it's been pretty obvious that our transfers have been shambolic. I think we've gotten better though, curious to know what the numbers are like over the past three years for example.

Is Maguire worth more than £80m? AWB more than £50m? James more than £20m?

Our signings have been more successful on the pitch than previous years, but I'm not sure, according to my understanding of OP, they'd be a success by that metric.

 

[Jippy]

Some signings will naturally go down in value cos of age, eg Matic or RVP before him. That doesn't make them bad business.

But yeah, not sure that metric will catch on.

 

[UDontMessWith24]

Ed and the Glazers are on the same page. He’s conducting business according to their commands. We’re the ones being fleeced.

 

[Rampant Red Rodriguez]

You put 10 years of work into a few numbers and ignore the stories that happened in the years?.

Cool story bro #fullofshit

 

[liamp]

The point of metrics is that they shouldn't be subjective. Assigning a "market valuation" on players when there's literally no reliable publicly available market value information is...problematic.

 

[Toad]

Still don’t even win the alternative finance table

 

[Alanxyz]

Think we made a few £m on Chicharito, but outside of the academy ones, he’s probably the only one. Although I would question some of the squad valuations, not sure I’d be happy if we sold Greenwood at his ‘market value’ of £40m.
I‘m also guessing lots wouldn’t be too happy if we made a high profile purchase, saw them improve, only to sell them! We should be keeping and utilising those players.

 

[MackRobinson]

@TheLord
I think a better metric would be the 10 year average of the ratio of change in win percentage over money spent (for each year). That would probably best isolate "sporting" value for money.

(∑ (∆ win percentage in a given year / transfer spend in a given year)) / # of years

EDIT: messed up the equation originally

 

[TheLord]

You put 10 years of work into a few numbers and ignore the stories that happened in the years?.

Cool story bro #fullofshit

Alternatively, you could rely on gross or net spending, and those would be infinitesimally more inaccurate. I never said the metric is perfect.

 

[TheLord]

@TheLord
I think a better metric would be the 10 year average of the ratio of money spent over the change in win percentage (for each year). That would probably best isolate "sporting" value for money.

(∑ (transfer spend in a given year * ∆ win percentage in a given year)) / # of years

I can do that, but what do you do with factors like David Moyes and Jürgen Klopp? Those managers alone are responsible for a huge number of losses and wins! And again, teams sometimes throw away matches (like in the league cup), which influences win%.

—
As I said before, people can come up with several complex equations with infinite variables, but those would be too difficult to compute, and would still not be perfect.

 

[Murder on Zidane's Floor]

The club has no substance regarding our style of play and as such we reduce the ceiling of players we get in.

There is something odd with the club.

 

[Skills]

The shitty managers our fanbase constantly cries about the club 'not backing' have fleeced the club.

 

[Bebestation]

I have been saying this for a while but we are one of the very few clubs where players actually get worse over time. We need to review our training methods and staff and take a long hard look at what other teams do to improve players.

It also couldn't hurt to take a look at players we actually baught and sold during that time frame. I doubt we would fare much better but I since the numbers from transfermarkt are just guesswork, some actual hard numbers couldn't lend some more credence to this metric.

I feel our club values loyalty too much. Maybe it's in our DNA but I feel like it holds us back.

We give players the opportunity to play good here but also the opportunity to come back from a storm. I hardly see this at many other top clubs but it's like we treat every player as the second coming of Giggs and Scholes.

Just a random example off the top of my mind - Chicarito had some couple of good seasons here but even during that period it was obvious that he wouldn't be good enough for what we wanted to achieve. Instead of selling him at a time we could make a good significant profit of him we sold him when his profit margin was lower. We gave him that time to drop because we value a players loyalty to this club and we give them this loyalty back.


For example- daniel James is clear to some is not good enough. If we sell him now we can get our money back or even make a good profit selling to a rival. What happens if we give the player some loyalty or even value James's ability to be loyal to us in the long term & become a better player eventually?

If they regress then so does our wallets.

 

[OverratedOpinion]

What a path this club has taken since we last won the Champions League. Probably close to 2 billion spent on failed transfers and loan/interest repayments.

People who defend the Glazers based on the fact that we have won titles under them based on the sheer iron will to win and genius of Sir Alex Ferguson, well they astound me.

The buck stops with the owners, not Ed Woodward. If Woodward is not fit for task then find someone who will. People often say that he gets a pass based on our commercial growth but obviously our commercial growth would have been even more significant if we had been competing for major honours since Sir Alex left.

Football is a sport for the people, it is something to get working men and women through the week, to provide us with something to look forward to at times. Inheritance billionaires will never understand that and to them they see our unhappiness as a bunch of people complaining about something that doesn't really matter.

 

[limerickcitykid]

Transfermarkt valuations

 

[Skills]

I have been saying this for a while but we are one of the very few clubs where players actually get worse over time. We need to review our training methods and staff and take a long hard look at what other teams do to improve players.

It also couldn't hurt to take a look at players we actually baught and sold during that time frame. I doubt we would fare much better but I since the numbers from transfermarkt are just guesswork, some actual hard numbers couldn't lend some more credence to this metric.

There is zero coaching accountability at this club. There's nobody there in a position to assess - is the manager actually getting the best out of the players at the club?

The fanbase itself is far too stuck up a managers arse to ever ask that question themselves so always just want MORE players.

 

[sammsky1]

What is the best metric for judging 'good spending' clubs? I know there is no perfect solution, and there will always be a lot of debate on whether players are worth the money spent. A composite metric that incorporates a large number of variables would probably be very accurate but is very difficult to calculate.

One easily computable metric is the difference between the total market valuation of all the players and the net spending of the club - the business metric. This is a good surrogate for assessing the 'economic side' of transfers - the higher this value, the better the overall deals. For example, if United buy Sancho for £108m today, and United want to sell him next summer, we'd still be able to recoup every penny and more. So even though the net spending increases enormously, the business metric remains relatively unchanged. If Liverpool buy Salah for £40m and transform him into a £100m player (current valuation), that is better still. But if a club buys a player for £50m and is forced to sell him for a measly £20m in two years' time, it is a disastrous transfer.

This metric is extremely easy to compute and is a much better index than gross spending or net spending, in my opinion. For calculation purposes, a 10-year period seemed reasonable (2011-2020). Only the top seven big PL clubs were included in the calculation.

The new Business Metric

Net spending in the last 10 years (a)	The current market valuation of the squad (b)	The new "business metric" (b-a)
Manchester City: £867m Manchester United: £814m Chelsea: £410m Arsenal: £380m Liverpool: £335m Everton: £271m Tottenham Hotspur: £135m	Liverpool: £986m Manchester City: £933m Chelsea: £832m Manchester United: £719m Tottenham Hotspur: £697m Arsenal FC: £582m Everton FC: £441m	Liverpool: + 651m Tottenham: + 562m Chelsea: + 422m Arsenal: + 202m Everton: + 170m Manchester City: + 66m Manchester United: - 95m (minus!)

United are the only top PL team that have spent more in the last decade than the total current valuation of our players, which means our players valuations’ have depreciated significantly in recent years. Players like Pogba, Maguire, Fred, Lindelof cost a lot of money to buy, but their stocks have since plummetted. Our spending is even worse than Manchester City's. City’s squad is more valuable than ours despite similar net spending. Liverpool have done the most amazing business in the last decade, buying inexpensive players and transforming them into expensive assets (Salah, Mane, etc). Chelsea get a lot of stick for spending extravagantly, yet they have a superior business metric than even Arsenal or Everton! Liverpool, Chelsea, and Spurs are not as wasteful as United or City.

Our overall ranking in the PL is much lower than #7 shown in the table, but I have only included the traditional top PL clubs (Wolves, Leicester, etc. are excluded).

We have wasted a walloping £0.75 billion more in building our squad compared with Liverpool! Forget one, we could buy seven Jadon Sanchos with that money. Ed has fleeced the Glazers!

Very interesting analysis. Thanks!

wonder what the previous 7 years under SAF /Gill looks like to make a direct comparison

 

[Class of 63]

Metric!? Was hoping he was a young Serbian left-back

 

[monosierra]

GIGO - Garbage In Garbage Out unfortunately. The concept is sound but the results are only as good as the quality of data input.

 

[edcunited1878]

It's a good attempt and shows how much time you have, but those valuations on transfermkt are still very subjective.

You can also do a comparison on first team build (how they were assembled and how much they cost in transfers, etc. year over year) and then compare wages against output. Who the feck cares what you spend or how much you spend, it's about results. Also, it is well documented that City's transfers and wages that are public aren't the finished article. There's a lot of behind the scenes payments that 'suddenly' increase the total value of a transfer or wage given to a player, but publicly their spend has been moderate compared to others.

For example, Liverpool have 3 players 'valued' at over 100 million Euros (Mane - 120, Salah - 120, and TAA - 110(!)). Nobody is going to pay 100M whatever currency for a right back. But again, shows how valuable he is to at least his team.

Anywho, another post justifiably saying Ed is poor at spending and recruiting players for the first team. Not a surprise. Been that way for 7/8 years now after David Gill and Fergie left.

 

[kiristao]

We have never sold well and always bought high. Even during the SAF/Gill days. Ronaldo was the exception. But it didn't matter as the results on the pitch were excellent.
It's not Ed's fault if he is signing players that managers want but the managers are not utilizing them well enough or they turn out to be not good enough. Then they are not easy to sell.

 

[lsd]

How can Ed be blamed for signing players the managers wanted ?

 

[Flytan]

How can Ed be blamed for signing players the managers wanted ?

Because it's an antiquated system that most clubs no longer follow. You have a structure in place but he's either 1) too power hungry to give it up to someone with a footballing brain or 2) Glazers and he have some bullshit financial deal that if we hired someone outside that person would find it impossible to work here. Signing whoever the manager wants is dumb since most managers leave after 2-5 years anyways. Luckily Ole's idea of transfers coincides with an ideology that lots of football directors have.

 

[Stretender]

Ed and the Glazers are on the same page. He’s conducting business according to their commands. We’re the ones being fleeced.

Absolute spot on. Some people go to some length to absolve the Glazers of any blame.

The fact that Ed has wasted money is not Ed's problem. The problem is that the Glazers do not care about waste so long as they are getting dividends.

If Ed is wasting Money and the Glazers had an idea about how to properly run a football club, Ed would have been sacked and replaced with football people.

The sad truth is that the Glazers don't care about United winning to the extent that as long as they are getting money from the club, the rest don't matter.

And it's not Ed fleecing the Glazers. Its the Glazers and Ed fleecing United fans.

 

[Noodle]

Love a post with substance and reasoning based on something tangible. Good work

 

[Suedesi]

What is the best metric for judging 'good spending' clubs? I know there is no perfect solution, and there will always be a lot of debate on whether players are worth the money spent. A composite metric that incorporates a large number of variables would probably be very accurate but is very difficult to calculate.

One easily computable metric is the difference between the total market valuation of all the players and the net spending of the club - the business metric. This is a good surrogate for assessing the 'economic side' of transfers - the higher this value, the better the overall deals. For example, if United buy Sancho for £108m today, and United want to sell him next summer, we'd still be able to recoup every penny and more. So even though the net spending increases enormously, the business metric remains relatively unchanged. If Liverpool buy Salah for £40m and transform him into a £100m player (current valuation), that is better still. But if a club buys a player for £50m and is forced to sell him for a measly £20m in two years' time, it is a disastrous transfer.

This metric is extremely easy to compute and is a much better index than gross spending or net spending, in my opinion. For calculation purposes, a 10-year period seemed reasonable (2011-2020). Only the top seven big PL clubs were included in the calculation.

The new Business Metric

Net spending in the last 10 years (a)	The current market valuation of the squad (b)	The new "business metric" (b-a)
Manchester City: £867m Manchester United: £814m Chelsea: £410m Arsenal: £380m Liverpool: £335m Everton: £271m Tottenham Hotspur: £135m	Liverpool: £986m Manchester City: £933m Chelsea: £832m Manchester United: £719m Tottenham Hotspur: £697m Arsenal FC: £582m Everton FC: £441m	Liverpool: + 651m Tottenham: + 562m Chelsea: + 422m Arsenal: + 202m Everton: + 170m Manchester City: + 66m Manchester United: - 95m (minus!)

United are the only top PL team that have spent more in the last decade than the total current valuation of our players, which means our players valuations’ have depreciated significantly in recent years. Players like Pogba, Maguire, Fred, Lindelof cost a lot of money to buy, but their stocks have since plummetted. Our spending is even worse than Manchester City's. City’s squad is more valuable than ours despite similar net spending. Liverpool have done the most amazing business in the last decade, buying inexpensive players and transforming them into expensive assets (Salah, Mane, etc). Chelsea get a lot of stick for spending extravagantly, yet they have a superior business metric than even Arsenal or Everton! Liverpool, Chelsea, and Spurs are not as wasteful as United or City.

Our overall ranking in the PL is much lower than #7 shown in the table, but I have only included the traditional top PL clubs (Wolves, Leicester, etc. are excluded).

We have wasted a walloping £0.75 billion more in building our squad compared with Liverpool! Forget one, we could buy seven Jadon Sanchos with that money. Ed has fleeced the Glazers!

It's a good attempt, but some caveats are needed:

For example, let's say we bought Sancho for 120m Euros and then 10 years later, after a lot of football Sancho is completely spent. His transfermarkt value has fallen to 10m Euros. United are not a selling club, so we kept him on the books - by your simple metric, we've spent more on Sancho that the current valuation of the player. It's an extreme example but hopefully it drives home the point.

Another issue with transfermarkt valuations is that they take into account the length of contract - so a great player with 1 yr left might have a smaller than an average one with a long term contract.

Just a couple of things to consider.

 

[Crustanoid]

You’re an absolute maniac if you’re worrying that spending 120mil on Sancho is an issue because after 10 year’s of top quality football his value will be 10 mil.

The metric paints a more accurate picture of the state of affairs than anything we have seen hitherto

 

[Green_Red]

A football business would also figure revenue and profit into that equation. Pogba was expensive and only has a certain resale value but he also has commercial value in his own ability to generate finances for the club.

Where are United in terms of revenue over the past 10 years? Yes, the club has a lot to do with it but the players also have their part to play.

 

[MackRobinson]

I can do that, but what do you do with factors like David Moyes and Jürgen Klopp? Those managers alone are responsible for a huge number of losses and wins! And again, teams sometimes throw away matches (like in the league cup), which influences win%.

—
As I said before, people can come up with several complex equations with infinite variables, but those would be too difficult to compute, and would still not be perfect.

Well of course it won't account for everything, but I think it's a better per dollar metric. Percent increase in winning percentage per dollar spent per year on average. It's not a very complex calculation. I'll try to see if I can do it sometime this week.

 

[bond19821982]

No one buys to sell. We buy to improve the team.

Do you want to see a better 'business metric '? Sell Rashford, Greenwood and Martial.

In short, just another thread to bash Woodward.