When Moneyball Meets the Beautiful Game: A Predictive Analytics Approach to Exploring Key Drivers for Soccer Player Valuation

Abstract

To measure the market value of a professional soccer (i.e., association football) player is of great interest to soccer clubs. Several gaps emerge from the existing soccer transfer market research. Economics literature only tests the underlying hypotheses between a player’s market value or wage and a few economic factors. Finance literature provides very theoretical pricing frameworks. Sports science literature uncovers numerous pertinent attributes and skills but gives limited insights into valuation practice. The overarching research question of this work is: what are the key drivers of player valuation in the soccer transfer market? To lay the theoretical foundations of player valuation, this work synthesizes the literature in market efficiency and equilibrium conditions, pricing theories and risk premium, and sports science. Predictive analytics is the primary methodology in conjunction with open-source data and exploratory analysis. Several machine learning algorithms are evaluated based on the trade-offs between predictive accuracy and model interpretability. XGBoost, the best model for player valuation, yields the lowest RMSE and the highest adjusted R2. SHAP values identify the most important features in the best model both at a collective level and at an individual level. This work shows a handful of fundamental economic and risk factors have more substantial effect on player valuation than a large number of sports science factors. Within sports science factors, general physiological and psychological attributes appear to be more important than soccer-specific skills. Theoretically, this work proposes a conceptual framework for soccer player valuation that unifies sports business research and sports science research. Empirically, the predictive analytics methodology deepens our understanding of the value drivers of soccer players. Practically, this work enhances transparency and interpretability in the valuation process and could be extended into a player recommender framework for talent scouting. In summary, this work has demonstrated that the application of analytics can improve decision-making efficiency in player acquisition and profitability of soccer clubs.