The idea of using an algorithm to determine football transfer fees has once again been raised by FIFA President Gianni Infantino. Speaking at the governing body’s annual law conference in Tokyo, Infantino suggested that implementing an algorithm would help increase transparency in the transfer system and benefit all stakeholders involved. However, this proposal raises questions about its feasibility and potential impact on clubs and competition law in the European Union.
Implementing an algorithmic approach to setting transfer fees could bring several advantages to the football industry. By removing the negotiation aspect, clubs would no longer have to engage in lengthy and often contentious discussions over player valuations. This could streamline the transfer process and reduce the likelihood of inflated fees.
Transparency is another potential benefit of this system. With a standardized algorithm, the calculation of transfer fees would be based on objective factors such as the player’s age, contract length, international record, and the global economy. This would provide a clear and consistent framework for valuing players, eliminating the subjectivity that currently exists in the market.
However, there are also valid concerns surrounding the implementation of algorithmic transfer fees. One significant issue is the potential limitation of clubs’ selling options. If transfer fees are determined by an algorithm, clubs may find themselves with reduced flexibility in negotiating deals. This could lead to frustration among clubs, particularly those who excel in player development and rely on transfer revenue as a crucial part of their business model.
Another important consideration is the compliance with competition law in the European Union. The recent ruling from the EU’s court of justice in the Super League case highlighted the limitations on the regulatory power of football bodies like UEFA and FIFA. It is unclear how an algorithm-based pricing system would align with competition law and whether it would face legal challenges.
FIFA has a long-standing interest in developing a transfer value algorithm. The governing body has been funding research at the University of Neuchâtel in Switzerland since 2010, aiming to create a reliable method for determining transfer fees. The International Centre for Sports Studies (CIES) has also conducted extensive research on this topic.
According to CIES, players like Jude Bellingham, Vinícius Júnior, and Erling Haaland have market values of at least €250m ($272m) when considering factors like age, contract length, and international record. However, these valuations differ significantly from those calculated by the football industry website Transfermarkt. The algorithm developed by CIES tends to assign lower values to top-ranked players, highlighting the discrepancies within the market.
While the concept of algorithmic transfer fees presents intriguing possibilities for the football industry, it also raises complex challenges. FIFA, clubs, and regulatory bodies must carefully consider the advantages and disadvantages of this approach and find ways to address any potential issues.
To gain wider acceptance, FIFA would need to collaborate closely with clubs and national associations to ensure that the algorithm reflects the realities of the market. Striking the right balance between the interests of clubs, players, and fairness in the transfer system would be crucial.
Moreover, the compliance with competition law in the European Union cannot be overlooked. Any algorithm-based pricing system would need to align with the legal framework and prevent the concentration of power in the hands of a few dominant clubs.
As the football transfer market continues to grow and exceed $10 billion annually, the need for more transparency and fair practices becomes paramount. While algorithmic transfer fees offer a potential solution, the implementation and fine-tuning of such a system require careful consideration of its implications. The football industry must engage in open and inclusive discussions to find the best path forward, ensuring a more balanced and efficient transfer system for the benefit of all stakeholders involved.