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THE PENNSYLVANIA STATE UNIVERSITY SCHREYER HONORS COLLEGE DEPARTMENT OF FINANCE GETTING A KICK OUT OF FINANCE: A STATISTICAL ANALYSIS OF SOCCER’S TRANSFER MARKET RICHARD JOSEPH BLAIR SPRING 2017 A thesis submitted in partial fulfillment of the requirements for a baccalaureate degree in Finance with honors in Finance Reviewed and approved* by the following: Robert Novack Associate Professor of Supply Chain Management Thesis Supervisor Brian Davis Professor of Finance Honors Adviser * Signatures are on file in the Schreyer Honors College. i ABSTRACT Having grown up playing soccer competitively, employed at the Philadelphia Union’s PPL Park, and being fortunate enough to travel internationally on multiple occasions and experience the game globally, I have become absolutely captivated by the sport. In an attempt to apply my financial skill-set and background in business, as well as my multi-faceted experiences and passion for soccer, my Schreyer Honors Thesis will focus on the valuation of soccer’s greatest assets: its players. This thesis attempts to determine if “Moneyball,” an analytical approach utilizing data, can be applied to soccer in an effort to accurately determine player value. There is often a subjective quality to valuing athletes; however, the development of sabermetrics and their application with Moneyball have allowed general managers the opportunity to objectively analyze players. Intrinsic value can be determined therein and roster management decisions can occur without behavioral finance components. ii TABLE OF CONTENTS LIST OF FIGURES…….……………………………………………………………………..iii LIST OF TABLES…………………………………………………………………………....iv ACKNOWLEDGEMENTS…………………………………………………………………...v Chapter 1 Introduction of Topic .................................................................................. 1 Soccer’s Transfer Market ................................................................................................. 2 Thesis Statement .............................................................................................................. 2 Chapter 2 Literature Review ........................................................................................ 3 Initial Understandings of Soccer’s Transfer Market and Application ............................. 3 Behavioral Finance: Heuristics and Biases in the Transfer Market ................................. 6 Talent ........................................................................................................................ 6 Position ..................................................................................................................... 7 Status ........................................................................................................................ 7 Age 7 Injury Record............................................................................................................ 8 Nationality/Adaptability ........................................................................................... 8 Intangible Qualities .................................................................................................. 8 My Direction .................................................................................................................... 9 Chapter 3 Data Methodology ....................................................................................... 10 Challenges ........................................................................................................................ 10 EA Sport’s FIFA 17’s Player Valuation Model ............................................................... 10 Data Collection ................................................................................................................ 12 English Premier League Historical Charts ............................................................... 12 FIFA 17 – Player Skills ............................................................................................ 13 English Premier League Fantasy Soccer .................................................................. 14 Chapter 4 Data Analysis .............................................................................................. 15 English Premier League’s Clubs ...................................................................................... 15 Overall Ratings vs. EPL Fantasy Price ............................................................................ 16 General Manager – Player Analysis ................................................................................. 17 Assumptions ............................................................................................................. 18 iii Regression Analysis ................................................................................................. 20 Goalkeepers .............................................................................................................. 21 Center Backs ............................................................................................................ 22 Right/Left Backs ...................................................................................................... 23 Center Defensive Midfielders .................................................................................. 23 Center Midfielders .................................................................................................... 24 Center Attacking Midfielders ................................................................................... 25 Right/Left Midfielders .............................................................................................. 26 Right/Left Wings ...................................................................................................... 26 Strikers ..................................................................................................................... 27 Generated Roster ...................................................................................................... 28 Chapter 5 Conclusion ................................................................................................... 29 Further Considerations ..................................................................................................... 31 FIFA 17’s Player Valuation Model .......................................................................... 31 Prozone and Opta Statistics ...................................................................................... 31 Team Budget ............................................................................................................ 32 Player’s Expected Growth ........................................................................................ 32 Appendix A English Premier League Club Statistics (1992 – 2016) ......................... 33 Overall Statistics – Games, Records, Goals For, Goals Against, Goal Differential, Points 33 Overall Statistics – Position Finishes, Relegations, Avg. Points Per Season, Avg. Finish, Best Finish ................................................................................................................ 35 English Premier League Season Tables ........................................................................... 37 1992/93 ..................................................................................................................... 37 1993/94 ..................................................................................................................... 38 1994/95 ..................................................................................................................... 39 1995/96 ..................................................................................................................... 40 1996/97 ..................................................................................................................... 41 1997/98 ..................................................................................................................... 42 1998/99 ..................................................................................................................... 43 1999/00 ..................................................................................................................... 44 2000/01 ..................................................................................................................... 45 2001/02 ..................................................................................................................... 46 2002/03 ..................................................................................................................... 47 2003/04 ..................................................................................................................... 48 2004/05 ..................................................................................................................... 49 2005/06 ..................................................................................................................... 50 2006/07 ..................................................................................................................... 51 2007/08 ..................................................................................................................... 52 2008/09 ..................................................................................................................... 53 2009/10 ....................................................................................................................