English Premier League – Footballer’s Wages

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In a follow-up to “The Cost of Success: English Premier League,” where we saw that to a certain extent, that spending has brought clubs more success (i.e., higher positions in the league table), but spending more money on transfers didn’t necessarily reflect all the causes for success.

The Rules

  • We can use the wages paid to all players over five seasons and compare it to the number of points accumulated over five seasons.
  • The assumption is that wages would reflect players’ skills and contributions and take into account contributions made by players not brought in that five year period.
  • The champions are awarded 20 points, runners-up 19 and so on, the team that finishes in the bottom gets 1.
  • The ★ indicates teams that are in “Top Four,” the four teams that consistently finished in the top four between 2005-2009.

Do wages reflect performance better?

  • There’s a clearer relationship between wages and points than transfer spending and points.
  • The teams who have a higher total wage payroll have more points.
  • The “Top Four” teams have the four highest wage spending and have the highest number of points.
Footballer's Wages

Drawbacks

  • Players aren’t the only cause of success; managers could’ve gotten better performances from lower-wage players.
  • If teams get relegated, they start in the lower league, where they could perform better.
  • There could be a time lag between spending and success.
  • Wages don’t necessarily reflect how well the player has played.

Source: Deloitte Money League

Prateek Agarwal
Prateek Agarwal
Member since June 20, 2011
Prateek Agarwal’s passion for economics began during his undergrad career at USC, where he studied economics and business. He started Intelligent Economist in 2011 as a way of teaching current and fellow students about the intricacies of the subject. Since then he has researched the field extensively and has published over 200 articles. If you have any questions, comments or suggestions, please email me or connect with me on LinkedIn - https://www.linkedin.com/in/prateekgrwl/

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