An interesting tale on resale value declining as players move into the bigger leagues

UEFA's first report on the European Club Footballing Landscape provides an interesting picture on the valuation of players and their expected resale value across European leagues. If we compare the clubs' valuation of players on their balance sheets, it is not particularly surprising to find that English clubs are at the top with combined player assets of €1.24 billion with Spain coming in second at €985 million and Italy in third with €821 million. But it's interesting to then compare this to how the players' agents estimate player resale values. England again comes in top with the player resale value totaling €2.76 billion, Spain at €2.31 billion and Italy on €2.15 billion. This represents a substantial premium on the clubs' balance sheet estimate of player assets, which probably more closely reflects original transfer value.

Although there appears to be significant resale premium in the bigger leagues with English clubs expecting a profit of 123%, Spanish clubs at 135% and Italian clubs at 162%, the real profit comes in the smaller European leagues with Scotland clubs facing expected profits of 491% and Turkish clubs at 445%. In the figure below, clubs' valuation of player assets on their balance sheets is represented by the white circle with agents' player valuation the larger green circle. Although the clubs' total player assets on their balance sheets declines rapidly as we move down through the smaller leagues, the agents' valuation of players does not decline as quickly. This points to expected profit on player resale increasing as we move down through the smaller leagues.

What does this tell us? Probably an expected story. The smaller European leagues provide the training ground for the best players before moving to more well known leagues in England, Spain and Italy for significant transfer fees. But once players get to England, Spain and Italy, there is little opportunity to transfer to bigger clubs; and for English, Spanish and Italian clubs, there are little options to make a profit on players by receiving a larger transfer fee than what they paid.