The myth of the ‘British Premium’

“If I can buy in our market I always will. You pay a premium for a young British player and that’s what we’ve done”

(Steve Bruce, upon signing Robert Snodgrass and Jake Livermore for over £15 million)

With the transfer window now in full swing and most Premier League squads undergoing changes, one thing remains constant – the perception that if you are buying a British player then you will likely be paying a premium for his services.

According to proponents of that argument, the evidence is all around us – look at Luke Shaw, for example. The 18 year old cost Manchester United the princely sum of £33 million. And then there is Shaw’s former Southampton teammate Adam Lallana. Is he really worth £25 million? Probably not, but because he’s British Liverpool had to pay more. And the examples go on and on.

In part this narrative has been created, or at least reinforced, in the collective consciousness by Daniel Commoli’s so-called ‘Moneyball’ experiment at Liverpool and the fateful signings of Andy Carroll, Stewart Downing and Jordan Henderson for a staggering £75 million. Arsene Wenger’s ‘astute’ signings from the French leagues in his early days as Arsenal manager provided the flip-side to this argument – clubs should shop in foreign markets because this is where value lies.

While there are elements of truth within that generalised viewpoint, it is clear that this does not tell the whole story and that proponents of it tend to indulge in a confirmatory bias to ‘prove’ their point.

Inconveniently for those who claim the existence of a British premium, there are a number of counter-examples that can be drawn upon – how about the two inexperienced Belgian players who had only previously experienced life in the Belgian Pro League (one 21 the other just 18) who were brought to England for a combined fee of £33 million? Should we actually be making bigger noises about a ‘Belgian Premium’? Or what about the £12 million that Chelsea shelled out last season for a young French centre half that had played fewer than 50 first team games? Admittedly this is more than Calum Chambers had mustered for Southampton before his big money switch to Arsenal, but surely this should provide some food for thought.

Could it be that the well-trumpeted notion of a British premium is both a misleading and confused interpretation of the decisions Premier League clubs are taking? Do we really think that teams like Manchester United, who could sign any player in the world as alternatives, decide to sign British players for more money just because of their nationality?

Hit Row Z has sought to test this notion by analysing almost 400 transfers (purchases and sales) involving Premier League clubs over the past three seasons. The following graphic illustrates the proportion of British and non-British players transferred over the period:

total transfers proportion british

What strikes us immediately from the information is how few transfers involving British players there actually were over the period. The dominance of non-British players in the Premier League was well-documented last season and the numbers presented above are consistent with this growing trend. If it is possible to make one conclusion from this data it’s that transfers involving British players are relatively rare occurrences in the modern transfer market.

Starting from the point that Premier League clubs will buy the best players that they can, using the (usually considerable) resources that they have at their disposal, what could explain this disparity? After all, there is no shortage of British professional footballers for Premier League clubs to choose from across the largest number of professional domestic leagues in Europe.

Could it be that proponents of a premium are actually correct, and because of the inherent value placed upon them, Premier League clubs are ultimately priced out of buying British?

A review of the monetary values attached to these transfers (thanks largely to www.transfermarkt.com) paints a very different picture:

price of british players comparison

The most significant headline is that, based on empirical data, the average transfer fee paid for a British player is 30% lower than the average transfer fee paid for a non-British player.

While it casts significant doubt over it, this data alone does not necessarily tell us whether a British premium does exist or not. However, together with the demonstration that fewer transactions involve British players, it does likely reflect the fact that the majority of Premier League clubs believe they can recruit higher quality players by shopping overseas. Put another way, the findings suggest that the average British player is probably less good than the average non-British import.

To explore this further we can take transfer fee as a crude proxy for quality and analyse the distribution of transfers involving British and non-British players since 2012 accordingly:

table2.png

  • Firstly, and as demonstrated elsewhere by HRZ, the vast majority of players were transferred for less than £10 million
  • Of those in this sample, 76 are British and 166 non-British. However, it may be telling that a staggering 83% of British players transferred fall into this category, compared with 73% of transfers involving non-British players.
  • However, there is an even greater differential between the numbers of British and non-British players transferred for in excess of £10 million. While 16 British players have such an honour, 60 non-British players do. In terms of £20 million plus players, while evidence suggests Premier League clubs will pay expensive fees for the right players, almost 90% were non-British.

So what can we take away from all of this?

First of all, the number of British players being bought and sold by Premier League teams is considerably lower than the respective figures for their non-British equivalents. This is despite the abundance of professional British footballers available.

Secondly, the average transfer fee for British players is considerably lower than that for non-British players. When taken together, these observations suggest that far from there being a premium on British players, in actual fact the quality of British players is increasingly not at the level required to allow Premier League teams to continue to compete.

That is not to say that no British player is good enough or ever will be. Indeed, evidence suggests that they are. Instead of the hullabaloo that is generated around clubs “paying over the odds”, fans and the media should instead celebrate the quality of these players.

When Manchester United decide to make Luke Shaw the most expensive 18 year old in the world, this is testament to his quality and long term value rather than because he is a British prospect. If we consider an alternative – signing a 29 year old Felipe Luis for almost £20 million – then, rather than selling at a premium, Shaw may actually be good value. That is not to say that they are playing at the same level on day one, but clearly Chelsea will need to spend a similar amount replacing Luis in two or three years’ time, as Shaw is entering his prime years.

Finally, when debating the existence or otherwise of a British premium it is too easy to forget that there are a range of factors that influence a transfer fee. Quality is undoubtedly the overriding concern, but issues like level of senior experience and pedigree, a Premier League track record, the value of that player to the buying and selling club, the wages the player will demand, the marketability of the player, and the risk of things not working out will all be taken into account by clubs as they enter negotiations. To imagine that nationality in and of itself is a factor is surely a lazy misnomer and masks the complexity and reality of Premier League trading.

READ MORE ON THE REALITIES OF TRANSFERS IN THE PREMIER LEAGUE:

Which clubs have been most addicted to buying and selling players in the last decade?

Which part of the market has your club been shopping in since 2003?

Comments

  1. This is an interesting argument, although I’m struck by a potential flaw. You begin with a quote from Steve Bruce in which he specifies ‘young’ British players as attracting a premium – an important distinction – yet your research doesn’t take age into account at all. Do you not think your results might change if it did?

  2. Are you an idiot? To my eyes, all the you present absolutely supports the idea of the British premium that almost everyone agrees exists. More big money transfers of foreign players occur because clubs can get more talent for what they’re worth in foreigners, as they have to overpay for British talent. And the Luke Shaw example-honestly, how stupid are you? You mentioned Belgian players-okay, an 18 year old belgian was bought by Liverpool this summer. He cost 10 million quid. A couple seasons ago, Chelsea bought an 18 year old belgian. He cost 10 million quid (add-ons reportedly increased it to as much as 15-17, but still). What do Origi and Lukaku have in common? They’re both strikers. This summer, United bought an 18 year old left back for more than triple the fees of either of the belgian teenagers. Are you deluded enough to not know that strikers cost more than defenders? That hell yes, this is an example of a British premium? This article’s a joke

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