Using Algorithms To Determine Transfer Fees
This month saw FIFA’s President Gianni Infantino reaffirm his position as a proponent of technology in football.
Infantino re-floated the prospect of using algorithms to determine transfer fees for players in an attempt to refurbish the current model with greater transparency and regulation.
FFP regulations have not been able to keep up with the soaring levels of activity and investment in the annual windows. The past decade has produced transfer fees previously thought unimaginable. Neymar’s transfer fee of €220m upon his move to PSG in 2017 perfectly embodied this frenzy.
Part of the problem lies with the unsynchronised and dis-jointed means with which clubs value players. Many factors contribute towards unpredictable transfer prices with projected image rights, current form, performance data, and even agent’s fees muddying the waters. Despite FIFA capping the commission fee for agents at 6%, uncertainty regarding the process of player valuation remains a constant headache.
It is not, then, a surprise to see Infantino exploring methods to somewhat modulate the transfer market through unwavering algorithms. Integrity must be restored.
Technological advances in recent years, driven by AI developments, offer bountiful opportunities across the game. Time and money can be saved in scouting, for example, by using algorithms and data analysts to extract grassroot talent from the wider pool based on a club’s favoured preferences. This hurdles the tedium of endless in-person scouting sorties.
New algorithms like these may serve as regulators for the international transfer market with an automated pricing model levelling the playing field, reducing the perpetual randomness of player valuations. These steps echo the 2018 FIFA Council’s pledge to deliver a reformed transfer system package.
FIFA’s Clearing House in Paris (FCH) is aiming to develop such a system whereby it becomes the centralised authority through which all transfers are processed. If successful, we could see a stabilised transfer market built off a structured pricing strategy based on years of data. In addition, a training compensation scheme would incentivise clubs to foster young talent, further restoring integrity to football and increasing profitability across the board.
The necessity for reliable data to underwrite these algorithms, however, is central to their success. Accurate data input is the all-important ingredient for any algorithm looking to generate unprejudiced transfer values. The monopolisation of this programme by a singular body, like FCH, would ensure that such a criterion is met. Founded by Moussa Ezzeddine, Melon Coin, an analytical company that uses data to inform decision making in sport, does just this. Melon Coin relies on a store of data that’s been collected over the past decade to give the most precise transfer valuations possible.
The algorithm relies on transfer fees, performance indicators, media visibility and characteristics to generate its findings.
Melon Coin works with sporting directors at professional clubs to advise them of market value and ensure that, working alongside their scouts and coaches, the club can use its transfer budget efficiently, without over-paying inflated transfer fees.
Infantino’s desire to move in this direction requires similar tactfulness. If done correctly, we could see the resurgence of sustainable football.
