Welcome to Expected Villa (xV), a column that’s nominally a post-match look at the numbers behind Villa’s most recent results.
This edition of xV clearly isn’t about a match, but about Villa’s most recent addition to the squad: former Hibernian midfielder John McGinn. In my eyes, it’s an incredible signing, as the player’s young with room to grow and, for a couple different reasons, was available for a price lower than his value. We’ll look at the transfer through the lens of two ideas: football in the Financial Fair Play world and “Moneyball” tactics and market inefficiencies.
Let’s start with Financial Fair Play. Broadly, in the FFP era, there are effectively two ways to increase the standing of your club:
- Increase TV/sponsorship revenues, most commonly through winning promotion
- Consistently develop young, emerging players to get more value out of them than you paid, then perhaps sell them for a big profit
This is pretty much it, and the first one will only get you so far (being relegation-threatened, which let’s face it, 13 of the 20 clubs in the Premier League are).
For any football club to move forward in these days, you can’t just have owners who pump money into the club — you need a development-minded ethos. John McGinn is 23. He will get better and increase in value. If Villa do this right, they’re either turning around and selling him in a couple years to a bigger club or he’s helping the club to solid Premier League finishes.
This is a position where Villa have lacked the last couple years, relying last season on a bunch of players who were either in or past their prime. That’s not a good place to be as a club, because it would’ve meant an awful relegation scrap, then another if lucky, then another if even luckier. Short-term thinking is no way to build a football club and only keeps a Premier League side looking over their shoulders for survival. Eventually, it’s bound to come crashing down, as our neighbours up the road in West Bromwich learned. The McGinn signing is the biggest indication yet the new owners want to build a forward-thinking club that could, actually, appreciate in value beyond the Premier League’s influx of money.
So, moving to “Moneyball,” which is the title of a book and movie about using stats in sports, which is generally where the discussion ends in football. “Oh, you have a scouting department that’s identifying players to buy? Moneyball!” Which, yes, is true, but it misses so much of the point.
The bigger point behind “Moneyball” is that the Oakland Athletics were in pursuit of market inefficiencies. Effectively, at the time, baseball was undervaluing a certain subset of players, and the A’s (operating with one of the smallest payrolls in the league) were able to acquire players from that subset who were just as impactful, but who cost much less, than others in the league.
And it’s true that the search for market inefficiencies is absolutely baked into a stats-minded approach, so in that sense, the “Moneyball” purpose is there. But we don’t explicitly look at it that way in football, instead just looking at it as an alternative way to scout players.
The pursuit of foreign players through stats-minded scouting is probably the clearest way in which market inefficiencies are pursued analytically in football, and it makes sense — traditional scouting in foreign countries is expensive, and clubs overvalue players with experience in the English game. In this case, even if Villa’s scouting wasn’t stats-minded, they’ve executed on a market inefficiency: Since McGinn is joining from Hibernian, and not say, Sheffield United, his going price is lower.
There’s an additional layer to football’s “Moneyball” approach that’s different from what we have here across the pond — in football, a player’s contract doesn’t move with him from one club to another. In American professional sports, a player’s contract does.
In the U.S., players who are in the final year of their contracts are often traded when their teams are out of playoff contention. This is simple asset management. But if a player’s traded at the deadline on an expiring deal, the club is going to get back less in return than if he had multiple years left on the contract. In this way, it’s the same as football — if a player’s deal is expiring in a year, the transfer fee is likely to be lower.
The difference, though, comes in the value to the player’s new team. If you trade for a player on an expiring contract in the U.S., you’re only getting him for that year. The value is, generally speaking, pretty on-par with what you’ve paid.
However, take McGinn as an example to see how football’s different. His actual worth to Villa is the same no matter how many years he has left on his contract at Hibernian, as Villa would sign him to the same deal and get the same amount of value out of him over the course of the contract. Yet they pay less.
It’s a huge market inefficiency, and one that isn’t exploited enough, in part because teams get greedy. Of course the best value in football is to sign a player on a free transfer, but Celtic tried to play hardball on that with McGinn and got burned. The next best thing, then, is moving for a player in the final year of his contract. Whatever Aston Villa have spent on John McGinn, it’s less than he’s worth to the club, simply because his contract was expiring at Hibs. It’s incredible value.
So, to recap:
- Villa have purchased a player who’s going to grow at the club and should become more valuable in one, two or three years than he is right now.
- In purchasing a player from Hibernian, Villa have acquired McGinn for a lower price than an English player of a similar profile would have cost.
- In purchasing a player on an expiring contract, Villa have acquired McGinn for a lower price than a player of a similar profile with multiple years left on his deal would have cost.
It’s incredibly good business, and what makes it so wonderful is that they’ve accomplished all of these things. They’ve bought a player whose value is so much higher than what they’ve paid for him, and I couldn’t be happier with the business.