I did this chart as part of a paper for my MBA. It shows the relationship between wages and points, along with an indication of the relative debt load of each team. Hopefully it's easy to read. Edit: I guess we can't do pictures in this forum?
Excellent analysis!!! You must spread rep..... I have a few questions pertaining to your analysis. 1) What is the value of R^2 between points and wages? Quite high evidently. 2) From where did you source the wages of the players for each club? 3) Have you made exceptions for non playing players who are still on the pay roll. For eg, Owen Hargreaves barely played this season, but he still collects his pay cheque. etc Should such exceptions be made? Could you share your work with us. I will try and replicate this for the BuLi season 09/10. Comparing on different leagues on wageoints ratios might yield some useful insights.
1. Actually, the R^2 isn't all that high. It's about .65, but it is significant at the 95% confidence level (thank you Stata!). I suspect that if I had more than one season and/or leauge in there, the R^2 would be higher. The correlation coefficient is about 80% 2. The Times of London had a nice piece back in February (I think) with the debt and wage figures for most of the clubs. I went back and checked annual reports and news articles to update the figures. This way, I was able to get some more recent data. 3. I didn't make any exceptions, especially since I got my numbers from other sources. I will try to convert my spreadsheet into a Google Doc and post it here. For the Bundesliga, I spoke with Stefan Syzmanski, the co-author of Soccernomics. He indicated that the payroll to points correlation is strongest in the EPL and much weaker in France and Germany. Edit to add: This analysis doesn't consider the three types of debt clubs are adding: 1. Stadium construction debt - Arsenal 2. Leveraged Buyout debt - Liverpool and ManU 3. Operational debt from buying players - Chelsea and Man City In the end, it doesn't really matter, as the ability of the big clubs to carry massive debt constitutes the same structural advantage that the big clubs in other league have.
So if I read this correctly: Brinmagham paid about 25 mil for 50 points Chelsa paid 150 mil for 88 points That is .5 Mil per point vs. 1.7 mil per point They should get a price for that. (Brim)
Where did you get this information? I thought club payrolls weren't published. I think this makes final position in the EPL table more like the payroll chart than you get in the MLB. Interesting. Could soccer tables be systemically more connected to payroll than baseball standings? http://www.cbssports.com/mlb/salaries/teams 2009:http://baseball.about.com/od/newsrumors/a/09teamsalaries.htm Also, do you know where this info can be found for other leagues?
Lots of research. You can find a lot of club payrolls by looking around online. There was a piece in the Times of London a while back as well, with a lot of figures. I also got on the phone with club leaders. You'd be surprised who you can reach with the phone. I had a 30 minute conversation with the business manager of a major Serie A club just by calling and asking for him. The receptionist put me right through. I was amazed he picked up. There's a lot of data out there. I'm thinking of doing a paper investigating the effects of Europa League participation against league position. The central question here is "What impact does participating in the Europa League have on league performance?" I haven't done a strict analysis yet, but it would seem that there is a lot more variability among teams that qualify for the Europa League than among teams that qualify for the Champions League.
I just did the calculations for 2009 MLB. There's a VERY weak correlation between payroll and winning percentage. Although the equation is statistically significant, the R^2 or goodness of fit is only 21.2 percent. I wouldn't hang my hat on it.
This is also an interesting topic. My suggestion would be that you add another parameter- ability of the club to increase their depth in the summer. I don't know about the other leagues, but in the Bundesliga: Hertha Berlin qualified for the Europa Cup in 2009-2010 season. They couldn't handle playing both the league and in Europe and are relegated. They really aren't a 'weak' side so to speak. In Germany the season is divided into two halves. August to December, then the winter break and then Feb - May. Hertha performed quite well in the Feb - May part of the season. But from Aug-Dec, when they were a part of two competitions, they were poor. Simply because they didn't have the requisite depth to play in two such demanding competitions simultaneously. Next season, its Borussia Dortmund who will be in the Europa League and I predict a poor start of the season for them too. A club like Man City is going to be a real out lier in a study of this sort.
Actually, when ManCity was in the quarters 08/09, they didn't do well in the league, either... Hertha is also a bit of a special case. Instead of improving the squad, they gave away several key players of the previous' seasons campaign, thus were significantly weakened. Also, while it's true that they were improved in Feb-May, they didn't really perform "well", they were lower midfield in the return round table, while they were playing for the Championship for the majority of the previous season. It will indeed be interesting to see how Dortmund will cope... different to Hertha or Nürnberg before, who were both relegated while playing Europe, they will be strengthening the squad, the question will be if they can find and afford the right players. It will also be interesting to see how Hamburg will do without playing ~15 Europa League matches like they did in the last couple of seasons.
One thing I would be interested in is what kind of odds do teams have in the current environment. For instance, there is an article linked in the Spanish forum where some professor states only Barcelona & Real Madrid can win La Liga in the current financial environment. Is he right? Does the same apply to Scotland's Old Firm? England's big 4 or 5? Italy's big 5? What chance do teams who aren't among their country's biggest have in this environment? Specifically, given the current revenue gulf within national top-flights, what chance do Almeria, Sunderland, Motherwell, & the like have of winning their leagues at any point in the next 50 years? What chance do somewhat bigger clubs like Tottenham, Sevilla have of winning the league in the next 10 or 50 years?
Of the Big 5 leagues, Spain is the outlier in that it is so heavily dominated by the two clubs yet has 4 Champions League spots. I can't foresee a situation in the near term where a third or 4th club could consistently mount a challenge to the Big Two. Could it happen in 50 years? Maybe. Demographic and economic trends are negative, but it still is possible to have another major club emerge. In the smaller leagues such as Scotland, the Netherlands or Belgium, generally speaking the big clubs have been dominant since World War II. But that's changing, especially in the Netherlands, where the last two champions have been traditionally smaller clubs. Of course, the Old Firm and Anderlecht/Brugge are tops in their respective leagues. M. Sarkozy, your beloved PSG is probably the most underperfoming club in the world. To be in Paris, with very little competition, PSG should be one of the world's great clubs, alongside Man U, Boca Jrs., Inter, etc. If I could own a club, they would be the one.
^^^^^ You are right about PSG and Paris.Take a look at this map. Moving the cursor on Paris, you will find that there is only 1 top division club from Paris and that is PSG. Compared to cities like London, Madrid, Amsterdam etc, Paris clearly lags behind on the no. of top division clubs: population ratio.