Estimation of football player performance rights using econometric models and product life cycle

Football is a sport in which business is growing increasingly. Sport clubs are not only associations but also enterprises that resemble traditional enterprises, which rely not only on good sports results but also on financial benefits. Profits obtained by football enterprises are mainly connected with sales of tickets, TV broadcasting rights or sales of club souvenirs. Transfers of players has become very important in the budgets of sports clubs in the last fifteen years. Intangible assets, such as football performance rights, have begun to play an extremely important role in the company’s finance. The purchase of player cards gives the clubs a possibility of showing it in their balance sheet. That is why valuation of this type of asset is very important in every well-functioning enterprise. The aim of this study was to determine the possibility of using econometric modelling and modelling of the product life cycle in evaluation of players’ performance rights. The study involved using classical econometric models estimated by the ordinary least squares method and a feasible generalized least squares method. The choice of the method of estimation depended on verification of the correctness of the OLS model. The estimation of models describing players’ life cycle (PLC) was based on the logistic trend. The study used data from the ten most valuable players from the website transfermarkt.de. There was only one condition in choosing players for PLC modelling – the chosen players should pass a minimum of three phases to give the possibility to estimate the horizontal asymptote. The data was obtained from the transfermarkt.de web page and was related to the ten most popular and valuable football players in Europe. Results indicated the significance of econometric modelling in valuation of footballers’ performance rights and provided very important information for negotiations for club managers and agents.