European Football Player Valuation: Integrating Financial Models and Network Theory

ArXiv ID: 2312.16179 “View on arXiv”

Authors: Unknown

Abstract

This paper presents a new framework for player valuation in European football, by fusing principles from financial mathematics and network theory. The valuation model leverages a “passing matrix” to encapsulate player interactions on the field, utilizing centrality measures to quantify individual influence. Unlike traditional approaches, such as regressing on past performance-salary data, this model focuses on in-game performance as a player’s contributions evolve over time. Consequently, our model provides a dynamic and individualized framework for ascertaining a player’s fair market value. The methodology is empirically validated through a case study in European football, employing real-world match and financial data. This cross-disciplinary mechanism for player valuation adapts the effect of connecting pay with performance, first seen in Scully (1974), to include in-game contributions as well as expected present valuation of stochastic variables.

Keywords: network theory, centrality measures, passing matrix, stochastic variables, financial mathematics, Alternative Assets (Sports Valuation)

Complexity vs Empirical Score

• Math Complexity: 8.0/10
• Empirical Rigor: 6.5/10
• Quadrant: Holy Grail
• Why: The paper employs advanced stochastic calculus and network theory (Markov chains, GBM, PDEs), fitting high math complexity, while it includes a detailed empirical case study with real-world EPL data, indicating strong implementation and backtest potential but less than full trading system rigor.

  flowchart TD
    A["Research Goal: Dynamic Player Valuation"] --> B["Data Inputs"]
    B --> C["Model Construction"]
    C --> D["Computational Process"]
    D --> E["Valuation Outcomes"]

    subgraph B ["Data Inputs"]
        B1["Match Event Data"]
        B2["Financial Data"]
    end

    subgraph C ["Model Construction"]
        C1["Passing Matrix"]
        C2["Network Centrality"]
    end

    subgraph D ["Computational Process"]
        D1["Stochastic Variable Integration"]
        D2["Financial Mathematics Fusion"]
    end

    subgraph E ["Key Findings"]
        E1["Dynamic Fair Market Value"]
        E2["Individualized Player Worth"]
    end