The black box: How is a footballer’s price tag really determined?

In the summer of 2023, three players were purchased for €100m or more. The following summer, no transfer crossed that threshold. In 2025, football returned to two players costing nine figures, and the current summer has already logged three such transfers (Morgan Rogers to Chelsea for €138m; Elliot Anderson to Manchester City for €135m; and Sandro Tonali to Tottenham for €108m). In addition, at least two more deals are expected to cross the €100m. mark.

Five players at such a price in a single summer? That is already a record. But is this "madness," a bubble, or do these prices make sense? From an accounting standpoint, you can be sure that the clubs employ the best accountants money can buy. They will take care of tax benefits, discounts, credit, and everything required to ensure that a heavy loss is not recorded on the bottom line, making the monstrous price tag appear reasonable in the annual report.

The real question is whether, from the perspective of business health, it makes sense to pay such a sum for a player, and how that figure is determined in the first place.

The CIES Football Observatory conducted a study that attempted to answer these exact questions. The study, published in the International Journal of Financial Studies (MDPI), examines how transfer fees for professional footballers are calculated. Researchers analyzed more than 8,000 transactions worldwide between 2014 and 2024 to lift the veil on the "black box" of negotiations and prove that price formation is largely rational and predictable.

The researchers used extensive data, regressions, and normalization methods to construct a statistical model that accurately assesses the connection between a player’s characteristics and his price tag. CIES also investigated the phenomenon of "market inflation" (the study notes that prices have quadrupled since 2010). To maintain comparable data across different periods, the model makes the transfer fee relative by comparing it to an index based on the average price of the 90 most expensive transfers (ranked 10th to 100th) in any given window.

One of the most critical factors in the calculation is the remaining contract duration. The paper emphasizes that a footballer is essentially a "breach of contract" asset; as the remaining time decreases, the payment for the player drops significantly. This factor is mapped logarithmically, reflecting how the loss of value accelerates as the end of the agreement approaches (and the player becomes a "free agent").

Age is a key independent variable in the valuation, primarily because the model also takes into account potential future re-sale value and the remaining years of peak physical performance. In other words, a 31-year-old striker who scored 100 goals over the past two years will not be worth the same as a 25-year-old who posted identical numbers during the same period.

However, unlike many fan discussions that focus on simple statistics like goals or assists, the model includes a complex "performance" variable. It examines match level, playing minutes, and league competitiveness. Interestingly, specific technical actions (such as tackles or saves) were not found to be statistically significant on their own. This means that the "stage" (the level of competition) matters more than a reel of individual highlights on YouTube.

Since the study was conducted following a World Cup tournament, it was clear to the researchers that international reputation carries major weight in the calculation. Current or past affiliation with a national team ranked high by FIFA significantly increases value. This serves as a proxy for both "proven quality" and "marketability," as international exposure boosts the footballer’s global profile and commercial potential. From this, one can also easily draw conclusions about the status of Israelis in the transfer market.

To illustrate: A right-back who made over 100 appearances for a Belgian team, registered 10 assists, and scored at least eight goals in a league outside the top five will be sold for €45m. if he is Spanish (Pedro Porro). He will cost nearly €35m. if he is Brazilian (Danilo), over €30m. if he is Portuguese (Nélson Semedo), but his price will be lower than €25m. if his passport is Israeli (Anan Khalaili).

The value calculation is not only about the player himself, but also about the economic status of the clubs involved. The model includes variables for the financial strength of the selling club and the potential buyer. A player from a "wealthy" club in a top league (such as the Premier League) naturally commands a higher transfer fee, simply because the seller has more leverage to demand a maximum price.

At the same time, recency bias was also weighted in the study. The system placed high weight on performance in the 12 to 24 months preceding the transfer. This ensures that a player who was world-class five years ago but has declined recently will not receive an overvaluation. While the model aims for global application, it recognizes that different positions on the pitch carry different valuations. For instance, the market generally pays a premium for attacking players (strikers and attacking midfielders) compared to defensive players.

Ultimately, the data shows that 85% of the variance in transfer fees can be explained by objective factors. The conclusion is that while "gut feelings" and agents' rumors dominate the headlines, the actual money is driven by a highly rational, data-driven logic that rewards young age, long-term stability, and experience at the highest levels.

To apply this theoretical framework to the Israeli Premier League, the model would need to adapt to the specific economic ceiling and the "export-oriented" nature of the local market. While the core variables (such as contract and age) remain universal, the "league strength" coefficient would be significantly lower than in Europe; meaning, a goal in Israel carries less weight than a goal in the Bundesliga.

Furthermore, the calculation would place a heavy premium on local status. Due to the restriction on foreign players, a quality Israeli footballer often carries an inflated "local value" for domestic clubs; a value he might not necessarily have abroad. Therefore, it is uncertain whether in our case 85% of the variance can indeed be explained by objective factors alone.

After all, sometimes it is much harder to explain the transfer of an Israeli for €1m. than the transfer of a global star for €100m.