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European Football Player Valuation: Integrating Financial Models and Network Theory

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  • Albert Cohen
  • Jimmy Risk

Abstract

This paper presents a new framework for player valuation in European football, by fusing principles from financial mathematics and network theory. The valuation model leverages a "passing matrix" to encapsulate player interactions on the field, utilizing centrality measures to quantify individual influence. Unlike traditional approaches, such as regressing on past performance-salary data, this model focuses on in-game performance as a player's contributions evolve over time. Consequently, our model provides a dynamic and individualized framework for ascertaining a player's fair market value. The methodology is empirically validated through a case study in European football, employing real-world match and financial data. This cross-disciplinary mechanism for player valuation adapts the effect of connecting pay with performance, first seen in Scully (1974), to include in-game contributions as well as expected present valuation of stochastic variables.

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  • Albert Cohen & Jimmy Risk, 2023. "European Football Player Valuation: Integrating Financial Models and Network Theory," Papers 2312.16179, arXiv.org, revised Oct 2024.
    • Handle: RePEc:arx:papers:2312.16179
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    References listed on IDEAS

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    1. Jordi Duch & Joshua S Waitzman & Luís A Nunes Amaral, 2010. "Quantifying the Performance of Individual Players in a Team Activity," PLOS ONE, Public Library of Science, vol. 5(6), pages 1-7, June.
    2. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-930, December.
    3. J. Bakosi & J. R. Ristorcelli, 2013. "A Stochastic Diffusion Process for the Dirichlet Distribution," International Journal of Stochastic Analysis, Hindawi, vol. 2013, pages 1-7, April.
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