Saturday, 27 September 2008

Understanding Acquisition Fee

Jim Furlong of This Is Anfield is currently advertising Simao for sale on GW15. Simao's Acquisition Fee (AF) is £850,000. Jim wants an equivalent value player or two players who's AFs add up to £850k. Sounds simple doesn't it?

Well, there is a slight problem here that few managers understand (and maybe Jim does because it's in his advantage). You cannot simply add the AFs of players to equal another player. What the hell are you talking about I hear you ask?


The problem with comparing players using AF is that the scale is inconsistent. Let's say player A is worth £20k in terms of AF. If he improves his attributes there is a chance his AF will improve to £22k. It will make that change because £22k is the next band of AF. If player B is worth £500k and improves the same amount, his AF will increase to £525k. Here one step increase in AF is worth £25k. It doesn't mean that player A only improved a 10th of the level player B did - it just reflects the sliding scale used in calculating AF. If we create our own scale, let's say called rank where 0 is the lowest possible AF, 1 is the next highest AF, 2 is the next and so forth until we run out of AF values, we can determine the real relative value of players on our own scale. In fact using GW15 data the highest AF in the world at present is the free agent Cristiano Ronaldo - who hasn't been bought yet. £3,250,000 has a rank score of 100, it's the 101st step in the progression from £1,500, the lowest AF possible to £3,250,000 the current highest.



Rank 0 = £1,500, rank 1=£2,000...rank 99 = £3,000,000 and rank 100 = £3,250,000 (the current highest value). Rank is my translation of the real value of the player on a linear scale.

The chart shows that at the bottom end of the scale, every increase in rank is worth very little in AF change, whereas at the top end every increase in rank is worth a great deal in AF terms. Only if the line on the chart is a straight line can be safe in adding player AFs together to calculate player exchanges. In Jim's example at the top, he wants two players who's combined AF is £850k. If he receives that he is actually getting better value out of the deal than the other manager. I'll explain how:

£850k is rank 76 on our scale. If we swapped Simao for a £500k and a £350k player we would be giving him 62 (score for £500k) and 56 (score for £350k) = 118 worth of players. That's about 50% more than the value of Simao on my scale. It's also interesting to note that £350k is 70% of the value of £500k, but 56 is 90% of 62 - so a £350k player is 90% of the value of a £500k not 70%. So basically if Jim get's what he is asking for he will be 50% better off than he should be.

There was an example of a deal like this in GW10. Kernow 1497 sold Cesc Fabregas to the number one ranked team in the world AZ Bruntsfield for £2m plus Caio, Jair Baylon, Javi Garcia and Alex Teixeira. Those four players combined AF was worth about £1.3m. Fabregas was worth £3.25m in AF terms, so on paper the deal looked fair to both sides. But each one of those players was worth 50-60% of Fabregas on their own. So Kernow 1497 probably received 2 more players plus £2m that Cesc was worth on paper. Now it's not often you can prise a star player off anyone, so you may be perfectly happy to pay top whack for your favourite world beater. Nick at AZ already had a world class team, so he was probably happy to trophy hunt Fabregas too, and his continued domination of the rankings condones his strategy. What would you have done?

When evaluating swap deals you should also consider the difference in quality between the players you already have and the players you receive in part exchange. Let's say all the players in Jim's team are worth £850k AF each. If he was to sign two £400,000 players in return, neither player would improve his side - in fact his side's quality would be worse. So even though we can prove that he got 50% more value than he should, it didn't benefit him because the rest of his squad was already at a higher level.

This is a complex subject and one I don't recommend you worry about too much unless you are interested in the real detail of the game. But the lesson here is that you must understand the value of all your players, and if you sell one, it should only be for the sole aim of improving the quality of your team.

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