So, another terror/transfer window (TW) is upon us and just in time for the injury gods to strike down our own TW (Theo Walcott), along with the usual other collateral damage of the holiday season (Bendtner, Ozil, Ramsey, …. list until squad is finished).
However, like modern asymmetric warfare, terror, in this case the TW, and should we add an ! to that, TW!, is the solution. A chance to buy what you need, and loan out (metaphor for leave at the curb) that which you don’t. It sparks something akin to Christmas fever among otherwise sane adults who suddenly dream of that star ST, DM, CB, RB, … that might be “theirs” for just (insert large number of millions). All SQ of course! 🙂
So, we know right away that the TW! Is like a car. Put a normally sane person in one and you may well end up with a wild-eyed crazy person. This article is about adding some sanity and fun economics to ever growing lists of “what we need,” where just today I read an article that for just 7 new starters Arsenal will be solid for the rest of the year.
Seven!? That’s not a change, it’s a whole new team, kind of like Spurs this year, who have done oh so well with that plan!
Anyway, we all know the basics and have discussed them ad nauseum, but let us review so I can get my word count up:
- Release clause: specifies the amount of money for which a player may leave, key point here, if they wish to. No car lot bargaining here, stump up and a willing player is yours. Imagine if the car could look at you and go “nah, I don’t think that he/she is my type of owner, …”
- Available: an adjective describing the state of being open to offers. Often overused in the TW! To mean “desperately desiring”
- Interest: a noun that means lightly intrigued in principle, but in a TW! It suffers inflation to mean “stalking and acting quite anti-socially weird”
All of which is to say that all wish lists are subject to a player in question being willing to leave if a suitable deal arrives and they have a release clause, as well as a team being willing to part with that player for a price if they don’t.
Lesson 1: Embrace Reality: It’s all well and good to say “get XXX” and all his friends, but if he isn’t interested in Arsenal or moving just now, or his team won’t sell then … This is despite the fact that all supermodels desperately want me, even now, which is to say,
à It helps to see the world as it is rather than how you may want it to be.
Lesson 2: Strength from Scarcity: If a hundred SQ strikers were all available due to the simultaneous collapse of the Spanish, Italian and several other economies, then getting a good deal would be easy. Alas, never true when you need it! Scarcity is what drives prices in the TW! Scarcity, and fear of missing out on a one chance opportunity. How do you beat scarcity? You look for weak teams or those who need money, or who need something else even more. AW knows this, and has basically said so, good economist that he is, and we see it every game that Santi and Nacho play. And Ozil, and many others who were bought for needed money when the time was right. Players entering the last year of their contracts, forcing teams to cash in before losing them on a free, in effect reverse scarcity, which is to say create desperation for the team, by their desire to leave. At least towards the end of a TW!
à Need and player are only two elements, timing matters. Who are the teams that need something even more and have the player we want? How can we create a reverse scarcity with the teams we deal with?
Lesson 3: Marginal is of central importance: An economist will tell you that when the price of a good and its value are about equal, you are in an area where small margins of interest or need determine the final price. Another way to look at it is that lower priced, more available players who turn out to be great, with some input work usually, are a far better bargain then buying a star. For Ozil’s 40M how many youngsters and training years could we have bought. Figure TW and AR together didn’t cost that much. Hence, AWs preference for youth, it’s a better buy. If you can wait.
à It would indicate that buying now should be an act of desperation. If we consider Lesson 2 then, the real moral of this story is to find someone more desperate. With some SQ to spare. Who are those teams? Who is this year’s Malaga or Anzhi?
Lesson 4: Prices are optional: The price set is optional. I can charge you $100 for a coffee from my brand new espresso machine, and 17HT might pay it! But, if you have other options (see Lesson 2, or Lesson 1 if you are addressing my price), then I likely wont get many buyers after 17.
However, more interestingly, they thus reveal information. The price set in a release clause for example shows not only the players value to the team, but also the added value they derive from not losing him. A form of insurance if you will. Find a desperate team and you will find that the second price component comes down, and you have a Santi or Nacho for example.
à Use the quoted price (and total cost) to determine how much a team feels “not losing” a player is worth to them. Who are the teams with a player we want who can “afford” to lose them the most?
Lesson 5: Much of business is figuring out how to get a customer to pay more for the same thing: This is fundamental and to me denotes much of the TW! You’re at the movies and of course you get overpriced popcorn. It’s like $10 for a small, and immediately the perky teenager behind the bar says “Would you like the next size up (appears to be about 50% more) for another $1?” Whoa, really?!? What a deal… And so we grow fatter. But, that’s not it really. What has really happened is that you paid $1 (10%) more for about $0.01 (1 cent) more of cost. I.e. you just paid more for the same thing!
TW! time concentrates the market and its desperation, and thus we pay more for the same thing. Far more then if we had a more open market. That should clearly point out that the TW! benefits not teams, nor players, but agents and leagues who profit directly and, by the publicity of large sums for players in their leagues, indirectly.
Please don’t go on about how we can make it up in shirt sales. I agree, but, that money also goes towards infrastructure development, paying the person who sells you your tickets or keeps Arsenal player online so Gerry and I can watch the games. Like a bonus or a tax return you should save, you can, or at least should, only spend it once.
The real question is how to pay the same for the same thing. Something I think AW has been very good at over the years but, with all the other lessons above, requires patience, and a willingness to be creative. We didn’t *need* Ozil, but he was available for the “same” price when you compare his cost to Bale for example.
Now, before you leap on the “he’s a cheapskate, kill him!” wagon. This is not about being cheap. Our friends across the way at Spurs are the classic case of paying more for the same thing. They took £80-100M of Bale money and spent it on just about a whole team. That played the same. One 40M Ozil or similar might have been a better deal and a way of paying less for more. ‘Nuff said!
à How can Arsenal and AW buy more for less or the same price, rather then paying more for the same thing (or less if you buy the “Arshavin Corollary”)? To me it’s about being creative, need a ST, buy a DM and play different perhaps… How can AW be creative and still get Arsenal where we want to be at the end of the year?
So, just some thoughts to keep in mind when reading those wish lists and figuring out who we might want and who we might get. Consider them tools to use in analyzing what might really be going on.
Who’s really willing? Who’s desperate? Who’s “scarce” and who’s not? Are we being super-sized to pay more for the same thing? Should we care? Who’s the player we don’t need that will turn out to be the player we absolutely needed (keeping in mind another midfielder wasn’t top of many folks lists this past TW!)?
What are your thoughts?
Cheers — jgc