Free Soccernomics by Simon Kuper, Stefan Szymanski

English soccer) still explained 89 percent of the variation in league position. It seems that high wages help a club much more than do spectacular transfers.
    Manches ter U nited
    A rs enal
    R = 0.887 2
    C helsea
    Liverpool
    Ast on Villa
    N ewcastle
    Charlton
    Leeds
    W igan
    M anch es ter City
    Derby
    Pres ton N orth End
    Millwall
    -1
    Plym outh
    Nottingham Forest
    G illin gham
    Hud dersfield
    -2
    C rewe Alexandra
    Swindon
    QP R
    verage league position (-log(p/(45-p))
    R otherham
    Port Vale
    A
    -3
    Bright on
    -4
    -2.5 -2 -1.5 -1 -0.5 0 0.5 1 1.5
    Wage expenditure relative to the average (log)
    F I G U R E 3 . 1 Premier League and Championship teams, 1998–2007
    In short, the more you pay your players in wages, the higher you will finish; but what you pay for them in transfer fees doesn’t seem to make much difference. (This suggests that, in general, it may be better to raise your players’ pay than risk losing a couple of them and have to go out and buy replacements.)

    G E N T L E M E N P R E F E R B L O N D S
    49
    F I G U R E 3 . 2 The more you pay your players, the higher you finish, 1998–2007
    Wage spending
    Average
    relative to the
    league
    average spending
    Club
    position
    of all clubs
    Manchester United
    3.16
    Coventry City
    27
    0.70
    Arsenal
    2.63
    Sheffield United
    27
    0.50
    Chelsea
    3.50
    Barnsley
    28
    0.45
    Liverpool
    2.68
    Preston North End
    28
    0.26
    Newcastle United
    1.93
    Watford
    29
    0.48
    Aston Villa
    1.34
    Norwich City
    29
    0.50
    Tottenham Hotspur
    10
    1.60
    Sheffield Wednesday
    29
    0.68
    Everton
    12
    1.41
    Crystal Palace
    30
    0.47
    Middlesbrough
    12
    1.32
    Nottingham Forest
    31
    0.62
    Leeds United
    13
    1.70
    Millwall
    31
    0.30
    West Ham United
    14
    1.31
    Cardiff City
    33
    0.37
    Blackburn Rovers
    14
    1.48
    Burnley
    33
    0.28
    Charlton Athletic
    15
    0.98
    Huddersfield Town
    34
    0.35
    Bolton Wanderers
    16
    0.92
    Plymouth Argyle
    34
    0.16
    Fulham
    16
    1.24
    Stoke City
    35
    0.26
    Southampton
    16
    0.92
    Gillingham
    36
    0.19
    Sunderland
    18
    1.00
    Tranmere Rovers
    37
    0.25
    Manchester City
    18
    1.24
    Stockport County
    37
    0.20
    Wigan Athletic
    19
    0.59
    Oxford United
    38
    0.23
    Wimbledon
    19
    0.94
    Crewe Alexandra
    38
    0.13
    Birmingham City
    20
    0.74
    Grimsby Town
    38
    0.20
    Leicester City
    21
    0.88
    Queen's Park Rangers
    39
    0.55
    Derby County
    23
    0.82
    Hull City
    40
    0.23
    Ipswich Town
    24
    0.65
    Bury
    40
    0.21
    Bradford City
    24
    0.55
    Swindon Town
    40
    0.28
    West Bromwich Albion
    25
    0.52
    Walsall
    40
    0.19
    Reading
    26
    0.50
    Port Vale
    41
    0.24
    Portsmouth
    26
    0.73
    Rotherham United
    41
    0.15
    Wolverhampton Wanderers
    26
    0.61
    Brighton & Hove Albion
    42
    0.15
    While the market for players’ wages is pretty efficient—the better a player is, the more he earns—the transfer market is inefficient. Much of the time, clubs buy the wrong players. Even now that they have brigades of international scouts, they still waste fortunes on flops like Blissett. (The transfer market is also of dubious legality—do clubs really have a right to “buy” and “sell” employees?—but that’s another matter.) 50

    Any inefficient market is an opportunity for somebody. If most clubs are wasting most of their transfer money, then a club that spends wisely is going to outperform. In fact, a few wise buyers have consistently outperformed the transfer market: Brian Clough and his assistant-cum–
    soul mate Peter Taylor in their years at Nottingham Forest, Arsène Wenger during his first decade at Arsenal, and, most mysteriously of all, Olympique Lyon, which has progressed from an obscure provincial club to a dictatorial rule over French soccer. From 2002 through 2008, Lyon won the French league seven times running. The usual way to win things in soccer is to pay high salaries. These clubs have found a different route: they have worked out the secrets of the transfer market.
    There is a fourth master of the transfer market who is worth a look, even if he works in a different sport across an ocean: Billy Beane, general