Do Some Leagues Overpay for Talent?

Josh Hobbs looks at whether some European leagues are spending too much on the players they sign.

In a recent article looking at the relationship between squad age and performance, I was able to show that there is no correlation between age and performance. One of the conclusions from that piece was that, whilst there are clearly still good reasons to have experienced players in a squad, it’s generally better to skew younger when squad building. 

I also posited the theory that leagues which skew older may well be overpaying for their talent but I did not expand on that theory. Using salary data from Capology, alongside average ages of squads and some league rankings courtesy of globalfootballrankings.com, I am now able to explore whether that theory has merit. 

A Note on Capology Data

Before I outline the analysis, a little explanation of the salary data from Capology is in order. 

Salary data is notoriously difficult to collect so a little leeway is always important. However, Capology’s methodology and data set is surprisingly complete. Capology utilises “a network of insiders directly involved in contract negotiations as well as publications around the world. When these are still not sufficient, Capology’s algorithms provide a best estimate.”

Within their data, there are “verified” salaries which are defined as either having been confirmed by the player, their agent or by two or more sources. In the Premier League, the data is generally over 90% verified but can vary early in the season until more details are published. For example, last season, post-January transfer window, there were 495 salaries verified out of 512 (96.7%). Last season, pre-January transfer window, there were 523 verified out of 557 (93.9%).

One further thing to note is that the data only includes base salaries, so heavily incentivised contracts will fall through the cracks. As such, it’s fair to say that the data is by no means perfect but certainly gives us something to work with in exploring the theory around leagues which have a preference for older players overpaying on salaries. 

The leagues which I have Capology data from are as follows: 

  • Europe’s Top 5 Leagues
  • Portuguese Primeira 
  • Netherlands Eredivisie 
  • Brazilian Serie A 
  • Mexican Liga MX 
  • English Championship 
  • Belgian Pro League 
  • USA MLS 
  • Turkish Super League 
  • Argentinian Primera Division 
  • Scottish Premiership 
  • German 2.Bundesliga 
  • Italian Serie B 
  • France Ligue 2 
  • Colombian Primera. 

Within this data set, I have selected the total yearly salary (gross) from each team in the league as well as their average salary and a breakdown of average salary for goalkeepers, defenders, midfielders and attackers. This should be a good starting point to elicit some interesting things here.

Analysis 

Here is a graphic which shows the average salary of all of the leagues in our data set plotted against the average age of the players in those leagues: 

This provided a much easier chart to take any kind of insight from as the y-axis wasn’t so stretched by the top leagues. I have annotated the graph with some of my thoughts and I will break them down here: 

The Eredivisie and the Pro League are dramatically younger than other leagues in this set: the only two with an average age below 25. However, they are almost at the average in terms of yearly salary. 

My first thought here was that their Champions League and Europa League teams have pushed the average right up. These leagues are also well known for being ‘development leagues’ so there is likely to be some elite young talent there on higher wages than the average player at that age will be earning. 

The next interesting pair of leagues was 2.Bundesliga and the English Championship. These two seem to be paying way above the average in wages compared to the average age of the league. 

One theory about why these wages might be a lot higher is that with an average age of just over 26, it suggests there are a lot more players coming into the peak of their careers. These players are going to be expensive as they are not young players with something to prove nor are they perceived to be on the downturn in their career. This would mean that they are earning at the top end of what they are likely to earn over the course of their time as a professional footballer. 

It’s also the case with these two leagues that they will be pushed higher in their average wages by the clubs which have recently played in the Premier League or Bundesliga. For instance, Schalke, one of the biggest teams in German football, has recently undergone a surprise relegation into the second tier. 

Of course, a lot of clubs will have had relegation clauses inserted into contracts for players signed in the top tier but one would imagine their wages would still be high for the lower tier in order to convince the players to sign them. In the case of the Championship, there are also an increasing number of teams paying vastly over the odds in terms of wages in a desperate attempt to break into the rich oasis that is the Premier League. 

Meanwhile, Turkey’s Super Lig looks to be overpaying significantly for its players. When considering some of the players who have left the Premier League and other top leagues to move there—such as Mesut Ozil or Ryan Babel—it’s not hard to see how this could have happened. Because of this, the league has earned the reputation of being a ‘retirement league’ where aging players will go to pick up one more lucrative contract. 

The three leagues at the bottom of the y-axis here—Ligue 2, Colombian Primera and the Scottish Premiership—look to be paying well below what would be expected in terms of the ages of their players. However, these leagues are not particularly high quality (in relative terms) so this will be reflected in the wages paid to players, even those at peak ages. 

Accounting for Quality

I thought it would be helpful to be able to attempt to adjust for league quality on these charts as well, so I gathered data from globalfootballrankings.com which uses 538’s Soccer Power Index (SPI) ratings to give league strength ratings based on the average SPI of each. (Unfortunately, the data for the Colombian league was unavailable). I have changed the size of the markers on the graph to reflect this data:

This addition to the data supports the assertion that Ligue 2 and the Scottish Premiership are weaker leagues comparatively. Also, we can see that the Turkish Super Lig and the German 2.Bundesliga are some of the weaker leagues on the graph, despite being the highest for average wage. This is further evidence to endorse the theory that players are being overpaid there. 

In the case of the Championship, you might perhaps expect them to be around the same area in the graph as the Portuguese Liga Bwin or the Brazilian Serie A if it weren’t for the reasons mentioned regarding teams coming down from–or trying to get promoted to–the Premier League. 

Also the theory regarding the Eredivisie and Pro League’s European competition clubs seems to hold weight with their high SPI rating compared to their average age. It’s worth mentioning that Ajax (ranked 4th on 538’s SPI) are skewing that rating heavily but they are also skewing the wages heavily so the results seem to hold their logic. 

A Deeper Look at Two Extremes

In order to break this down a little further, I took a deeper look at the leagues at either end of the age scale. 

Here’s the breakdown of the average wages in the leagues in the Netherlands and Belgium. 

As you can see, in both cases, there are a number of clubs without a single player aged 33 or above, bringing the average ages of the leagues way down. 

Also, the clubs who are able to pay higher wages for players at peak age and above are the clubs expected, with Ajax, PSV and Feyenoord out in front in the Netherlands. Belgium is a little more spread but Anderlecht—traditionally one of the biggest clubs but currently outside of continental competition after a few rough seasons—Club Brugge, Royal Antwerp and Genk stand out. All of these clubs, barring Anderlecht, have been involved in the Champions League or the Europa League this season. 

Taking this further, Capology has data for individual players for some leagues. Here are the top 10 earners by basic yearly gross salary from the Eredivise: 

The only surprise here is to see a player outside of Ajax and PSV make the list. Even more interestingly, he plays for Go Ahead Eagles, a side with a firmly mid-table total wage bill. On investigation, it turns out that Córdoba is on loan from Athletic Club in La Liga, which would explain why his basic wage is a lot higher than many in the Eredivisie. It is also not clear what percentage of his salary Go Ahead Eagles are paying Athletic Club. 

Contrastingly, here is how the breakdown looks for the Turkish Super Liga:

Of course, we know the average age of the league is far higher, something borne out by the fact that every team in the league has a player of the age of 33 or above on their books. 

Also, whilst the big clubs in the division do stand out as the top spenders, there isn’t as big a discrepancy between the big spenders and the rest of the league as there is in the Netherlands, where it is stark. 

Looking at the individual salaries for the Super Lig, the top ten earners here are all over 30, bar Michy Batshuayi. This is in stark contrast to the Netherlands, where there are only two of the top earners who are over 30. As such, we can say that the Netherlands pays its top wages to peak age players, whilst Turkey pays top wages to players on the downturn. 

What Can We Conclude From This?

Given the size of the data set and the pretty wild distribution of the leagues on the age versus salary graphs, it’s hard to make too many sweeping conclusions about where leagues might be overpaying for talent. 

However, in the case of Turkey, it does seem pretty clear that wages could be spent a lot more sensibly. To this end, it would be interesting to see where the top tiers of Cyprus, Greece, Russia and Hungary would sit on the graph. In addition, it would be fascinating to see the spread of how wages are spent amongst their teams as they also have similar average ages to the Super Lig. 

For now, in the absence of any data to the contrary, I have not changed my view that—whilst older players shouldn’t be ruled out from squad building as they may be the right player for a team to recruit on a case by case basis—in general, it is far better to skew younger with squad make-up. 

There is far more upside skewing younger than there is older. Turkey’s top earners will retire in the next few seasons and they will replace them with players looking for another exorbitant contract before retirement. 

The smarter thing to do would be to buy players on their way up who may not be at the club for any longer than a Ryan Babel or a Marek Hamsik might be but at least their output will be improving whilst playing in the league, rather than declining. Additionally, they will hopefully leave for a big fee, rather than running their contract down and retiring. 

When the time comes to replace these young players, not only will they have a transfer fee but they could sign another pre-peak player who will likely be available for a cheaper wage than the star who’s just been sold.

This strategy is clearly the smartest and most cost-efficient way of doing things and that’s why a club like Ajax, who primarily operate with a strategy like this, is looking like one of the strongest sides in the Champions League this year. 

Ajax have no issue in signing older players when they need to: Dusan Tadic and Seb Haller were signed in their primes and are starring for the club now. However, the general policy is to skew young and build for the future. There are many teams all over the world who could benefit by adopting that principle.

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