This is why your club was sold for less than Paul Pogba

A simple story of soccer economics

Image from Wikimedia

Let’s say you’re an American with some money and an interest in sports team ownership. Maybe you made your money in real estate or maybe you inherited it — the details don’t really matter too much for our purposes. One day you’re just minding your business — splurging on expensive haircuts and whatnot — when a distant relative of a Seinfeld cast member slides into your DMs. She’s offering the opportunity to buy one of Europe’s bigger and more prestigious clubs for $1. What should you do?

The fact that listed price is $1 hints that this could be a trap. Images of Damn Yankees: Soccer Edition flash through your head. But you decide to sit down and consider the pros and cons of the situation. On the one hand, clubs of this size don’t always come along for such prices. This, in a narrow sense, is an opportunity. But, the angel on your shoulder screams, you aren’t just buying the club’s brand and stadium, you are also purchasing its obligations: debts to suppliers, wages to players and staff, transfer obligations, debts, agent fees, banking costs, taxes, facility costs, and other expenses that you cannot currently imagine but will surely crop up because soccer is a weird business. Buying all these obligations — even for $1 — isn’t hugely appealing; this is why the club’s current owner is hawking it for that price. And all of these things are true: the price could be construed as attractive and the offer could be construed as risky, which is why it’s conceivable that both buyer and seller might convince themselves they came out on top in the deal.

That, in effect, is a stylized telling of the sale of Olympique de Marseille to former Dodgers owner Frank McCourt for £34million. It is also the reason we are gathered here today to gawk at this, the World Cup of Bad Economic Tweets winner:

If we are being exceedingly literal, there are no lies in that tweet: You can indeed buy Olympique Marseille for less than Paul Pogba. In a one-off match, you’d probably favor the French club against Pogba on his own — even if he is leggier than a cephalopod. But that’s not actually how the math works. Much as Marseille costs its owner more than its listed fee due to things like wages, so does Paul Pogba, who is now one of soccer’s big earners. These costs, which are frequently overlooked in talk about transfers and club sales, are what make this less of a blowout.

In financial terms, soccer offers very few safe bets; a player can always suffer a grievous injury and a European club always risks being usurped or relegation. This, in part, is what makes the sport’s few secure assets so valuable. Paul Pogba will be a marketing boon and even if he turns out not to be a Ballon d’Or winner, he will most likely be a very good midfielder in a world of rapidly inflating transfer fees. Pogba is valuable in large part because he is a safe investment. The same can be said for his club, which, in spite of questionable management on the pitch and in the boardroom, remains obscenely valuable. Even in years where it underperforms, Manchester United is one of Europe’s most valuable clubs. (Value, here, is an imperfect proxy for sale price.) The price Manchester United might garner tomorrow on the open market is in part a recognition of how hard it would be to totally fuck up running a club with its massive historical, financial, and geographic advantages. (This, in part, is why the Glazers have been able to load the club with debt. It’s also why their ability to almost run the club into the ground can be so impressively comical.) When you buy a Paul Pogba or a Manchester United, what you’re really paying for is a machine that prints money.

There are, to be sure, other ways of making money. You can buy underappreciated players like N’Golo Kanté, profit from their on-filed exploits, and profit some more when you sell them for handsome profits. You can buy a club that is relegation fodder and make money from survival, a new TV contract, and unexpectedly winning the league. But the counterargument to all these examples is Aston Villa: Success with bargain players or teams is not the norm. These sorts of transactions are cheaper because instead of paying for a printing press, you’re buying lottery tickets.

That is what Frank McCourt has done with Marseille, and you could be forgiven for not trusting a man of his financial nous with lottery tickets. (If you haven’t read Vanessa Grigoriadis’ Vanity Fair feature on the McCourt divorce, do so now.) But you could also be forgiven for understanding why Marseille, even on the back of an unimpressive stretch of history, remains somewhat desirable. This is a club with a sizeable stadium and fanbase that could once again be great. If you had to buy a lottery ticket — remembering that nobody ever does — you could do worse.

There have always been expensive players and inexpensive clubs. If you want to amuse yourself, go compare Cristiano Ronaldo’s transfer to Manchester United with the sale of clubs in the Romanian third division — to pick but one example at random — around the same time. This dynamic is not all that new or interesting. The real change and subject of fascination here is all about the headline numbers, which are at once large and misleading. In both its finances and on-field activity, soccer is about balancing promise with risk and safety with potential returns. That is the story of this summer’s news and the reason your club may have sold for less than even the successful manager who Arsenal fans periodically freak out about is willing to spend on a single player.