Player Power: Exploring the Impact of Player Metrics on the Valuation of Football Clubs

The global football industry is a key economic driver, generating substantial revenue and employment opportunities worldwide, with Europe standing out as a hub of popularity and influence. Despite numerous studies on factors affecting football club value, the impact of player-related metrics has often been overlooked. This research aims to fill this gap by analyzing various player-related indicators, including the number of players, average age, average market value, talent investment, average player rating, and league performance of six elite English football clubs from the 2015/16 to 2022/23 seasons. Using a panel data approach with fixed effects regression, supported by Hausman test results, the study reveals significant relationships between specific player-related metrics and club valuation. Specifically, we find a significant positive impact on the number of players and the players' average market value, as well as a negative impact of the squad's player rating on the enterprise value of football clubs. Surprisingly, we observe no significant impact of average age, talent investment, and club league performance on the club's value. This research contributes valuable insights to the literature on football club valuation dynamics, highlighting the importance of considering player-related metrics. The findings have practical implications for stakeholders in the football industry, offering insights for strategic decision-making and resource allocation.