Analysis of the football transfer market of the Russian Premier League

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Introduction

Sport was an essential part for humanity in everyday life for many centuries. Olympic games were first time held in 1896 in Athens and were very popular through its whole history. There had been always a demand on sport and people are ready to pay money for watching such events. The most popular and in-demand sports are football, hockey, basketball and tennis. However, the most popular among these disciplines is football. People all over the world play football and watch the most interesting matches from different places, while football matches from Champions League, World Cup and EURO are watched in every country, no matter at what time does these matches are played.

Football can brag its high ratings all over the world because each year the number of fans of this game increases. Huge queues near the ticket centers, fully playgrounds and amateur stadiums, filled bars during the matchday, all these factors show that the popularity of football is high. One of the main reason of football's high popularity is that football is available nearly to everyone: you just need a ball and a place where you can kick the ball. It is not necessary to buy an expensive inventory for football. For example, in hockey with a high probability you need to pay a rent for a place, buy skates, hockey stick and helmet. All these inventories are expensive, so such sports like hockey, tennis are not available to everyone because of a high “entry” price in these disciplines of sport.

Moreover, football has such popularity because of the uncertainty of the result. You can predict the result before and during the match but you can't be sure until the final whistle. This voltage keeps the fans near the TV or bring the fans to the stadium.

Such huge demand on football leads to high money operations in it. In our days, some players earn 20+ million euros per year only for their game on the pitch. Most of the popular players also sign commercial contracts with different brands, for example, Adidas/Nike/Gillette and earn even more on the advertising. If we look at the most profitable football clubs during the last season we can see that the profit and revenues has reaches the enormous values. Business in football has become enormous. According to the research, provided by the analytics of Forbes the value of a football club from the top 20 highest valued teams is $1.48 billion, higher by 3% than previous year. There is an important fact that 8 teams from English Premier League are in top20, while 6 English teams are even in top10. It happened because of the most profitable TV contract between Sky Sports and English Premier League by which Sky Sports will pay near 5 billion pounds for 3 years 2016-2019 and about 3 billion euros English Premier League will earn from the rest of the world. Moreover, 5 teams from Italy, 3 from Germany and Spain and one from France, PSG. The main drivers that help to generate the revenue for football clubs are sponsorship deals, participation and great performance in Champions League, revenues from TV broadcasting, successful sales of players on the transfer market. The most financial successful football clubs in 2017 were Manchester United with $288 million operational profit, Barcelona $113 million, Real Madrid $181 million, Bayern Munich $120 million and Manchester City $162 million.

The aim of this work is to analyze the football transfer market of the Russian Premier League and understand the pros and cons of this League. Due to the increasing popularity of the football every year and due to the lack of the popularity of Russian League in the world there is a small number of works that analyzed this football league so this work is considered to be actual and relevant. The tendency of enormous transfer fees for the football players during the last year is another reason for the investigation in this topic. In particular, I am going to see what factors increase and decrease the market value of football players for strikers, midfielders and defenders. Russian Premier League has a special condition that doesn't hold in the most European leagues: limit on the foreign players by which at least 5 players with Russian passport must be on the football pitch for each club. That is why I choose Russian Premier League for the analysis. So we will also see how this rule affects the transfer fees that are paid for the movement. In order to understand how the popularity influences on the market value econometric models will be used in this work. It should also be said that due to the small sample of goalkeepers the analysis of them will be meaningless. The literature overview is represented in the section 2 where most of the explanatory variables will be explained based on the authoritative researchers of this topic. In section 3 I provide different comparative statistics for the Russian football Premier League: payments from broadcasting, transfer effectiveness, biggest purchases and sales. Models for different roles, description of the variables and the results can be found in section 4.

1. Literature Overview

Speaking about the originality and relevance of this topic, it should be said that football transfer market and football overall has become an interesting topic for study only since 20 century and remains relevant in our days. The main and basic researches usually were done for different European leagues. As a rule, researchers prefer to analyze German, Spanish, English and Italian leagues because these leagues have been usually considered as best leagues with the best football players and coaches in them through the whole history of football. However, some leagues that are weaker than written above were also analyzed: Holland league, French, Portugal. At the same time, a lot of leagues has no or a few researches, which are mostly looks like articles in football magazines. Russian football Premier League due to its low popularity in the world has been studied weakly, so it's a great opportunity for a study. The basic works that help to understand the concept of football economy, transfer market, variables that influences on the transfer value of football players are “European football: A survey of the literature” by Victor A. Matheson (2004), “The football player's labor market: Empirical evidence from the major European leagues” by Bernd Frick (2007), “The determination of player transfer fees in English Professional soccer” by Stephen Dobson & Bill Gerrard (1999), “Bargaining in the transfer market: theory and evidence” by F. Carmichael & D. Thomas (1993), “Broadcasting Revenues and Media Value in European Football” by Pedro Garcia-del-Barrio & Francesc Puyol (2016). Most of these researchers describe the mechanism of football in their works. How is the system of football working? What are the main factors that form the transfer value of a football player? These questions are issued and tested in the articles. The article above by Victor A. Matheson (2004) shows the contrast of European football leagues with other leagues, in particular with different sports leagues of America: NBA, MLS and NFL. There also can be found interesting issues about player movement's between football clubs before Bosman's case and after where the revolution in player's movement and the aftermath in the last 50 years can be seen. “The football player's labor market: Empirical evidence from the major European leagues” by Bernd Frick (2007) is a good work where different dimensions of football market are analyzed, in particular remuneration and contracts. He concluded that goalkeepers earn significantly less than other positions and the reason for this is that goalkeeper is a very restrictive position in football. Midfielders can play as defenders and forwards if the situation ask this, while goalkeeper can only play their roles. The articles “Bargaining in the transfer market: theory and evidence” by F. Carmichael & D. Thomas (1993) and “The determination of player transfer fees in English Professional soccer” by Stephen Dobson & Bill Gerrard (1999) are helpful in understanding the concepts of transfer market. In these works, there was provided an empirical and theoretical analysis of English Premier League in 1990s and determined the variables that influenced on the transfer fees of football players. They found that playing time in domestic league has a positive effect on the market value. However, Ruijg & van Ophem (2014) noticed that players are sometimes play just few minutes, so it is better to use minutes played instead of appearances. Moreover, in the article by Pedro Garcia-del-Barrio & Francesc Puyol (2016) interesting empirical results about TV rights and broadcasting can be found. The used media values in order to understand what is impact of it in overall revenues of football clubs and found a strong empirical relationship between media value scores and broadcasting revenues. In another article by Barrio & Puyol (2007) they found that goalkeepers are underrated by the fans, while forwards are overrated. As a result, forwards usually win individual prizes, while this honor for the goalkeeper is very rare.

Moreover, the works of these researchers help to understand which variables influence on the market value of a football player. The research by Carmichael and Thomas (1993) tells us why age is an important indicator of market value. Some researches helps us to understand why height is important: higher players have higher probability to score with a head. Bryson et al. (2012) and Fry, Galanos & Posso (2014) will be helpful in understanding this question deeper.

According to Frick (2007), German website Transfermarkt.de has become the leading one: everyone can see different statistical information and see estimated market values of football players which the specialists of this website give to players. Moreover, many researchers use this website in their works. It is clear that transfer fees paid for the players do not usually equal to the market values by Transfermarkt. However, representatives of transfer department of football clubs usually check the latest updates of market values for the players that they are interested in. Herm et al. (2014) dedicated to Transfermarkt some pages in his research: he explained “judged principle”, or in other words selective approach to information aggregation. The main approach of Transfermarkt is that users of the website also can offer an estimation of the market value for the players. But the values of different people and experts have different weight in the final market value. Herm et al. (2014) called members “judges” those who have the most power and weight in determination of the market value in his research. Judges use their priority: they are available to the information which contains other's estimation of market value. So they decide the optimal market value from the available sample and then report it on the website. However, this method also has some disadvantages: lack of objectivity and lack of relevance because market value usually changes every 6 months.

Moreover, goals and assists was already suggested by Carmichael et al., (1999) as important factors because they show the ability of players to make the difference and bring points to the team. According to Franck & Nuesch, (2012) such factors for different position like dueling for defenders/midfielder or dribbling/shooting (Medcalfe, (2008)) has also become important because there are now sources with different statistics in open access and scouts also take into account these information.

As I have already said the factor popularity wasn't researched well. In 20 century, this factor usually relate to the error term (Carmichael & Thomas, 1993). But now there is a new era and popularity can be measured using different proxies: web links, online new, followers in social media. According to the work by Lehmann & Schulze (2008), larger amount of mentions in German football newspaper “Kicker” positively influence on the player's salary

It is obvious that football players are considered to be the property of clubs for which they play for. In American leagues such as NBA and NHL, where the best basketball and hockey players all over the world decide which club is the best, the system of exchanging the players between the clubs for the opportunity to get a better place in draft is usual, while in football, including the American football league MLS the players are usually traded for the money, which is called the transfer payment. For some players clubs paid hundreds of millions euros, while for others less than one million euro and some players are even join the clubs for free. Let's cover the history of transfer payments. For the first 75 years in the English Premier League there were restrictions on player's movement, known as the “retain and transfer” system. This system gave the right for the player to move to another club only if the club to which the football player was belong to allow player. The club to which the player moved needed to pay the transfer payment which was the compensation for the previous club. However, this system was modified and started giving more benefits to the players. In the 1960s the maximum wages rule stopped its existence and in 1977-1978 “the freedom of contract” was established. With this rule players were able to start any negotiations with other clubs if their contract with the current club ended. If the current club gave at least the same conditions for the player then the player could either accept them or move to another club but the new club needed to pay a mutually negotiated money compensation if the previous club offered such contract. Football League Appeals Committee or just FLAC worked as a binding arbitrator and helped both clubs to choose the neutral transfer fee. In order to understand the transfer market under the freedom of contract, Carmichael and Thomas in 1993 analyze the 214 English transfers in the 1990-91 season utilizing a Nash bargaining framework to determine what player and team variables influence the transfer fee paid. They concluded that goals scored and appearances for the club increases the transfer fee and the bargaining power for the current club. Higher team profits, attendance, winning margin, and rank in the standings by the buying club lead to higher transfer fees. The lower the division of the selling club then the less bargaining power it has. Speight & Thomas (1997) made a research about the decisions of FLAC in 164 cases from 1985 to 1990 and made some interesting conclusions: 98% of FLAC determined transfer fee is based from the player and club statistics and the weight of the final offer between two clubs is very low; moreover, it was found that FLAC usually lowers the transfer fee, lower than it would be achieved between two clubs without FLAC. So it was usually unprofitable to ask FLAC for the club in which the player became a free agent.

In our days, risk occurs everywhere and football isn't an exception. It is a usual thing in football when clubs overestimate value of players and pay enormous sums for them. Carmichael & Thomas (2000) analyzed transfers in English Premier League from 1977 to 1994. They concluded that certain buying and selling clubs that have engaged into long-term relationship have the property of repeated trades, so they have higher probability to make another one transfer deal if the first one was already done. Researchers also came to the fact that transfers that are done inside the country are much more common than transfers that are done between the clubs from different countries. Moreover, permanent transfers increase the probability of loan transfers, when players are given to a club on a loan usually for 1 year and then the club can buy this player on a full time if this player has satisfied the head coach during the loan period. Loan transfers can be free or sometimes the club which wants to take a player for a loan should have to pay some sum and the obligation to pay the salary usually goes to the club which takes the player for a loan.

In 1995 there was a revolution in football transfer market. Bosman case was the reason of this revolution: European Court of Justice ruled in the Bosman case that clubs would no longer have rights to get any money compensation for the players which contracts have expired. Bosman Jean-Marc was a Belgium football player whose team didn't allow him to move to other club after the expiration of his contract by setting a very high transfer fee. This revolution opened a new era of free-agency transfers in Europe, just 20 years after the same case of free-agency appeared in the USA.

Lots of experts tried to predict the effect of Bosman ruling on the football transfer market. Ericson predicted that it would reduce the investments in domestic players because of the fear that big rich and big clubs would negotiate with players from small clubs to move to their club as a free agent. On the contrary, Antonioni, Cubben & Dilger (2000) supposed that the solution of this problem is just giving long-term contracts or selling players before the end of the contract. As an example they took the transfer move of Alan Shearer in 1996 from Blackburn to Newcastle for a record fee by that time 15 million euros, while there was only 1 year till the expiration of his contract with Blackburn.

Racism is one of the most important problem in everyday life. It also touches football. For example, historically Russian football club Zenit did not buy players with the black skin until 2012 because of Zenit's fan club called Virage, which was several times seen in actions of racism. In theory, there were provided several tests in order to evaluate how the racial discrimination influence on the team performance. If the racial discrimination exists, then the labor market isn't efficient because the same skilled players with the black skin can be hired at a lower wage than the players with the white skin. Szymanski (1999) took the performance of 39 English clubs during 1978-1993 and compares their success with salary that they paid. He concluded that clubs with the higher proportion of African players show better result than teams with lower proportion of players from Africa. If the club principally doesn't hire black-skinned players, then it needs to increase the overall payroll by 5% in order to show the same results with the black-skinned people. Moreover, Szymanski and Preston made a test to understand if the racism found previously is a result of the management or fan discrimination. They came to the conclusion that team revenues and number of supporters at the stadium doesn't fall significantly (at 95% significance level) if black-skinned players play for your team in the starting squad or substitute someone during the football match. As a result, fan or management discrimination did not influence on the wages of football players with black skin. Another research was done by Reilly & Witt (1995), concerning racial discrimination. They wanted to understand if the color of the skin influence on the transfer price of the player. Again, the conclusion was that the transfer price of black football players doesn't significantly different from the transfer price of white-skinned people.

It is still unclear what determines the player's transfer price and wage. There is no doubt that goals scored by players, appearances in the starting squad during the season positively influenced on the player's transfer price and salary. Lucifora & Simmons (2003) analyzed Italian League Seria A and made a conclusion that goals scored, minutes played and appearances for a club and a national team strongly positively correlated with the higher salary. Moreover, even a few difference in the amount of goals scored, at the top of scoring table, could lead to enormous difference in salary and transfer price of football players. This could be called as a “superstar effect” or in other words the effect of players who make the difference on the football pitch.

There is no doubt that professional career in sport usually lasts for 10-15 years, usually from 18 to 33 years old. When you are young and your organism can show the best result during your life you are in demand in sport but then when you are getting older, usually after 30 years old, you need more effort in order to keep in good and competitive for sport conditions. Moreover, most of sportsmen also lose motivation in sport when they realize that their best years are gone and retire from sport.

The situation in football is very similar to the description above. According to Frick (2007), the average career duration in football, which is equal to the total number of years, ignoring exits and re-entries, is 4 years. Speaking about long-lasting careers, it should be mentioned that only less than 10% of all football players have a career that lasts 9 or more years. That happens because of a high competitiveness and high risk that starts from even earlier than junior and youth leagues. In order to become a good football player and earn solid money, people need to spend a lot of effort and abandon from studies, funs and other things. So the investments are very high with a little probability to succeed. Moreover, some young players are unlucky and needed to retire after chronic and severe injuries. For others, football become to annoy and they decide to retire after losing the motivation in this sport: some players have already reached the level that they took as an aim in sport and then begin to reduce requirements for themselves and play worse or even end the career.

According to Frick (2007), the main factors that influence on the duration of a career in football are individual performance such as age, goals per season, number of appearances. It should be said that goalkeepers have a more durable career than other positions, while forwards on average have a less durable career than midfielders and defenders. It can be explained by the fact that football players after 30 years old don't have the same speed and physical conditions as in 20-26 years old, so it become more difficult to score goals for them, while goals ratio is a very important factor for forwards, which usually shows the current skill for them and their career goes on the decline. While defenders, goalkeepers and midfielders are usually worth not only by their goals.

In the football industry, practically all the football players have its personal agent or sign the contract with agency that solve all the problems that the player faces. The main objectives of agents are help to the sign beneficial contract for the players, to find a new club if the player can't develop in the current club as a player, to communicate with different brands in order to get the revenue from advertising with his player, to help with the accommodation in new city. Overall, football player pays his agent or agency in order to keep his career easier and to concentrate only on football and his development as a football player.

However, the main reason why all football players decide to have a personal agent is the contract lengths because agents are professionals and can get the most beneficial contract for their players. Speaking about the contract lengths, we should mention that average lengths is 3 years in our days, while before in pre-Bosman era it was 2.5 years. Such result leads to the fact that in one single season approximately 1/3 of the club's squad have negotiations about new contract. Feess (2003) concluded that player performance significantly increases when only one year of the contract is left. Moreover, the variance is also lower in player performance in the last year of the contract. It mirrors that player increases his effort when his contract goes closer to the expiration because he wants to show his maximum in order to renew the contract with the current club or get more profitable contract from another club.

2. Overall about Russian Premier League

2.1 Payments from the broadcasting. Comparison with other leagues

There is no doubt that Russian League is not the most preferable league for football players and lovers of the game itself. There are at least five better leagues in Europe, which are considered as the most desirable for the players: English, Spanish, German, Italian and French. The most popular and skillful players are distributed in these 5 leagues. Their performance make a demand for football fans to watch the games of a particular team, where these superstars play.

It was already said that revenues from TV broadcasting has a large proportion in overall revenue. Football fans are constrained and need to make a choice which game to choose: game of favorite team, game between two teams with the best players in the world etc. That is why the attendance and the number of football fans is higher during the match Real Madrid-Barcelona than during the match between two Russian teams. Different level of popularity of matches in league leads to different costs of television rights for them. The table below shows cost of television rights of leading European league per season:

Table 1. Broadcasting revenue for different leagues

From this table it is clear that English Premier League is the absolute leader with 2398 million euros that is distributed between 20 clubs in the following way: about 65% of all payments to football clubs are divided in equal shares between 20 clubs and other payments are distributed according to the final position in the league. After the season 2016/2017 FC Chelsea earned the highest payments from TV broadcasting in England, about 150 million pounds, while the least payments went to Sunderland, about 93.4 million pounds. The last team earned more on broadcasting than all clubs from Netherlands championship (78 million euros) and three times more than all clubs from Russian Premier League (28.29 million euros).

If we compare the Russian Premier League with English Premier League in revenues from broadcasting, then we will find depressing results for Russia. The winner of the Russian Premier League in 2016/2017 got about 5 million euros, while the last team of English Premier League got 93.4 million pounds. So we see a big abyss between these leagues.

2.2 Biggest purchases and sales of Russian football clubs

Best football clubs like Spartak Moscow, Cska, Zenit, Lokomotiv and Krasnodar in Russian Premier League are usually considered as intermediate step between best European clubs and football clubs of medium level. If player's performance in this league is high and outstanding, then such player has a high probability to be sold for the best clubs from top 5 leagues: Spanish, English, Germany, French or Italian. Moreover, it has been a usual practice for the last 15 years: Vidic was sold from Spartak to Manchester United, Shkrtel from Zenit to Liverpool, Willian and Eto'o from Anzhi to Chealsea, Pavlyuchenko from Spartak to Tottenham, Arshavin from Zenit to Arsenal, Jo from Cska to Manchester City, Krasic from Cska to Juventus etc.

So it is clear that Russian transfer market is not ignored by top football leagues and clubs and stable performance for several years in Russian clubs can be a good signal for big European clubs.

The table below provides the information about top purchases and sales of Russian clubs in euros:

Table 2. Biggest purchases and sales of Russian club

From the table above we can see the tendency of a decreasing payment of Russian clubs for players. 9 of 10 top transfers were made from the period from 2008 to 2013 and only Paredes was bought for big transfer fee since 2014. At the same time Russian clubs still continue to sell their top-players for big transfer payment to other championship. The most famous and skillful players like Musa, Witsel, Garay and Hulk were sold for big money during the last 2 years. This tendency has started since 2014 and it should be said that Russian currency Rub has started losing significantly its value since summer in 2014. However, before the depreciation of ruble Russian clubs has more financial power on the transfer market and Zenit was able to pay 60 million euros for Hulk, Anzhi 35 million euros for Willian, Rubin 20 million euros for Carlos Eduardo, Dynamo was able to pay 15 million euros for Denisov, 19 million euros for Kokorin and 11 million for 30 years old Zhirkov during the same transfer window. Russian clubs had changed the strategy on the transfer market and we can state that now Russian clubs try to work on the transfer market in the following way: they buy talented and young players, give them conditions to develop in order to sell them in future to better clubs from different championships for a higher transfer payment and get profit.

2.3 Depreciation of Rub and effect of this event on Russian transfer market

I have already touched the topic about the depreciation of the Russian currency, which can be seen as a factor of lower bargaining power for Russian clubs on the European market. Now it is better to go deeper and compare the overall summer expenditures of Russian league in period before the depreciation 2010-2014 and after 2015-2018 years. The table below shows the expenditures, income and balance during the winter and summer transfer windows for the Russian Premier League:

Table 3. The expenditures, income and balance during transfer windows

It can be seen that expenditures were enormous comparing to the income during the seasons 10/11-12/13. The season 13/14 can be seen as a crucial transfer period: income from transfers was the highest, 317.63 million euros. This can be explained by the currency changes for Russia. In order to keep budgets competitive as in previous years, Russian football clubs have started selling its players. During the next 2 seasons, 14/15 and 15/16 transfer window for the Russian Premier League was constrained: expenditures were 88.46 and 39.63 million euros respectively, which is several time less than in previous 4 years. In the last 2 years the situation has been improved, however, relatively large expenditures during the season 17/18 can be explained by purchases of football club Zenit, which had expenditures 94.30 million euros only in summer transfer window, which is 61.7% of total expenditures of all clubs in Russian Premier League.

2.4 Transfer effectiveness of Russian clubs in the season 2017/2018

I would like also concern transfer effectiveness of Russian football clubs. Firstly, we need to define purchase value: all transfer fees which a club has spent on all squad-players. Players who are loaned out to other club are not included. We can use purchase value in order to find costs per point, costs per goal and costs per victory. The table below contains comparative statistics (in terms costs per point, costs per goal and costs per win) of the clubs from Russian Premier League during the season 2017/2018:

Table 4. Effectiveness of Russian club in the season 2017/2018

We can see that Zenit and Spartak Moscow are two the most financially powerful clubs in Russia with purchase value 124.24 mln. and 81.45 mln. euros respectively, while Tosno have spent nothing on its squad. Moreover, we can see that 6 clubs have purchase value lower than 1 million euro which states that they have big financial problems. In order to remain afloat these clubs sign players as free agents, give more opportunities to local young players and take players from different clubs on loan. From these table, it is clear that the most effective clubs are Tosno, Ural and Arsenal Tula, however, it should also be stated that Tosno took 15 place out of 16 and was relegated despite it is the most effective club in costs per point. So this values doesn't show the real effectiveness of football clubs. During this season top 6 clubs in Russia are qualified to the games in Europe: Lokomotiv, CSKA Moscow and Spartak Moscow to the Champions League and Krasnodar, Zenit and Ufa to the Europe League. Taking participation in the Champions League and Europe League gives a high utility to the clubs and players: the name of the football club become well-known all over the world, UEFA pays big amounts of money to the clubs who participate in European games, football players have a great opportunity to show their best performance and then make a step-up in their career. It is clear to everyone that playing in the Champions League is better than playing in the Europe Leagues: the winner of the Champions League can get 57.20 mln. euros and this sum doesn't include payments for a performance in a round of the playoffs and a share in a market pool, while the winner of the Europe League can earn 15.71 mln. euros. So these 6 clubs can be divided into 2 categories and see who was the most effective in such metrics like costs per point: those who qualified into Champions League and those who qualified into Europe League.

According to the final arrangement in the tournament table in the season 2017/2018, Lokomotiv, CSKA and Spartak Moscow have qualified to the Champions League. Costs per point are 305 th., 249 th. and 1,45 mln. euros respectively. So, the most efficient club in this metrics is CSKA and the less efficient is Spartak Moscow. Krasnodar, Zenit and Ufa has qualified to the Europe League with costs per point 663 th, 2.34 mln. and 57 th. respectively. We can state that Ufa has shown an incredible result, while Zenit was bad in this metrics.

Let's now look at the total market value of Russian clubs at the time of the date 01/06/2018:

transfer market football

Table 5. Market value of clubs in Russian Premier League on the date 01/06/2018

From this table we can see that all the best 5 teams during the season 2017/2018 are included in the top 5 teams with the highest valued squads, according to the Transfermarkt. However, the richest Russian football club Zenit with the highest market valued squad took only 5th place during the last season, Spartak Moscow took only 3rd place, while this club has the second highest valued market squad. So, we can say that these clubs underperformed during the last season. Lokomotiv and CSKA Moscow took 1st and 2nd places respectively and showed overperforming in the last season (if we predict the final places in table according to the market value of the squad). Krasnodar has the fourth squad in the Russian Premier League and showed exactly the predicted place in the tournament table. It is clear that there are other factors which influence on the place in the tournament table, not only the football players and financial power on the transfer market, because otherwise Zenit will always be dominated in the league. For example, manager efficiency, frequency of injuries, referee's decisions, weather, mood inside the team, lucky etc.

It has already been said that Russian League is a good opportunity to develop as a professional football player and to make a step up in player's career. Scouts and managers from the best European clubs watch the games between Russian clubs and research different statistics in order to find outstanding results of players in Russian Premier League. The games between the biggest Russian teams like Spartak Moscow, CSKA, Zenit are broadcasted in 50+ countries all over the world and the best players of Russian League are usually well-known all over the Europe. Each transfer window English, Spanish clubs make requests in order to understand what will be the desired transfer payment for Russian clubs in order to get these players from Russian League. For example, let's consider 10 best players of the last season according to the rating of Whoscored.

Table 6. Best players in the season 2017/2018

There have been transfer rumours about the best players of Russian League during the last season. Criscito had already been moved to Genoa, his first football club in career and he had also an opportunity to move to Inter Milan. Promes, Golovin, Kokorin, Smolov and Kverkvelia have a big demand for big European football clubs like Arsenal, Tottenham, Juventus and Borussia Dortmund. Luiz Adriano have been playing for Milan, Farfan for Shalke 04, so they are well-known in Europe and don't attract a big interest only because they are all 30+ years old and their market value and abilities are likely to decrease every next year. So, it is clear that if players from Russian show a really good performance for a stable time, then they will have an opportunity to a better club.

3.5 Biggest improvements and losses in market value

I would like also to show the biggest improvements and losses in the market value of players in the Russian League since 01/01/2017 up to 01/01/2018. The data is taken from Transfermarkt.

Table 7. Biggest improvements in the market value

The record difference is 8.5 million euros that belongs to Driussi: for exactly 1 years he has increased his market value from 3.5 million euros to 12 million. The maximum increase in % from previous market value out of this sample belongs to Kuzyaev. We can notice that all of these players are under 28 years old and this can be explained by the fact that the market value usually tends to rise to 26 years old, then usually stops and tends to decrease until the retirement. However, all of these players showed a great performance for the last year but I would like to talk about players of football club Zenit from this sample: Driussi, Paredes, Lunev and Kuzyaev. All of them have moved to Zenit from their previous clubs. Driussi, Lunev and Kuzyaev has improved their market value more than twice for the last year. Scouts and managers of Zenit saw prospects in them and so decided to overpay. All of these Zenit's players were 2-3 times cheaper than now and if we look at the sum that Zenit paid for these players, then we can see that Zenit needed to pay a lot of higher sum comparing to their market values by Transfermarkt.de at the time of their movements:

Table 8. Market values and transfer fee of four players of football club Zenit

It can be seen that Zenit paid more than the market value by Transfermarkt at the time of transfer. This situation is usual in football. In order to get good players a football team need to offer more than current market value. This bigger transfer fees for the players usually lead to the result that market value of players will be also appreciated. From the example above with Zenit, we can see that Lunev and Kuzayev are already worth more than Zenit paid for them. The market values of Paredes and Driussi have also appreciated and possibly soon will reach at least the amount of money that Zenit paid for them. So, it seems that Zenit's big investments in these four players are justified and the club possibly will make a profit on these deals.

Table 9. Biggest losses in the market value

The players above have the biggest losses in market value in the period between 2017 and 2018. The main reasons for the depreciation of the market value are high age, irregular time on the pitch due to hard or frequent injuries, bad physical conditions and performance. From the sample above, we can see that the most negative change in % from previous market value have players who are 33 and 34 years old: Ivanovic, Farfan and Noboa. Ivan Novoseltsev has lost 71.4% of his market value but he is 26 years old. This can be explained by the fact that after his transfer to Zenit he lost his position in the starting squad and played only 313 minutes during a year. Football clubs usually don't pay more than predicted or estimated market value for players who are older than 28 years old because they understand that the market value are likely to decrease for players after this age and such investments are usually undesirable because they decrease financial value of the club.

3. Models

3.1 Models and data description

In the previous chapter we seen that the transfer fee doesn't usually coincide with the estimated market value by Transfermarkt. I have decided to understand which variables influence on the market value of football players. Some variables were already explained by different researchers in their works in the second chapter. But I would like to pay extra attention to the popularity. It was already said that popular players in teams usually attract additional number of spectators to the stadium who comes with the aim to see their favorite player performance. Such players can be a good marketing move which increases the sales of football T-shirts and the number of sponsorships with the particular club and, as a result, increases the revenues of club. So, this factor should be tested. Popularity of players hasn't been researched yet deeply and this paper will cover this factor separately. Results described in the literature overview and actual situation on the market make ground for the following hypothesis. How does age influence on the market value? What about minutes played on the football pitch? Do Russian players cost more or less than players without Russian nationality?

In this analysis there will be three models: for defenders, for midfielders and for forwards. I decided not to estimate goalkeepers because of a small population in Russian Premier League and large amount of possible explanatory variables for this model.

Some i...