While it’s always a good idea to treat ‘paper talk’ as cheap talk, I couldn’t help but notice the papers claim that “Manchester United will have to make Antoine Griezmann the Premier League's best-paid player if they are serious about signing him this summer - and a deal could cost the club £155m” (Daily Mail – May 2nd).Today, it was reported that “Monaco forward Kylian Mbappe has not been the subject of a £72m bid from Manchester United (Sky Sports). These types of transfer values are extreme.
After paying €105 million (£89.3 million) plus bonuses of €5 million for Paul Pobga in August 2016, the Red Devils could break the world record again. Given that Pogba has hardly set the world on fire on the pitch (particularly in light of his cost), it makes me wonder about Manchester United’s motivations for purchasing players. Specifically, whether getting returns to investment on the pitch is as important a factor in their transfer spending as it once was?
While not questioning the talent Griezmann, Mbappe etc., ‘efficiency’ may not be a word you would associate with spending £155m on one player. Could one player ever justify this fee on the field and/or off the field in terms of other commercial revenue such as merchandising, endorsements etc.? Griezmann is 26 also, so it could hardly be argued that his re-sale value would be higher.
The literature on signalling theory may offer some alternative insights.
Performances and results are not as they once were for Manchester United. This type of spending, while obviously attempting to improve the squad, may also be an attempt to signal quality (and perhaps hope) for a generation of fans use to far superior performances. Also, it may ensure that a new generation of fans don’t get enticed by rival clubs or other ‘sellers’. Maybe paying extravagant sums is as much about flexing financial muscle as it is about attempting to win leagues for Manchester United.
There is a literature in economics that argues that firms make costly signals through advertising. This is a cost incurred to separate themselves from lower quality sellers. Sometimes for firms the content of this advertising does not matter and can even be irrelevant. Just the fact that they are advertising and expressing some sort of financial clout can be a means to signal information. It can often work too as low quality sellers have little or nothing to gain from advertising.
Perhaps a mix of motivations have to be considered when values such as £155m are suggested. While, of course, Manchester United maybe in a financial position to afford a player at the value , I’m sceptical that the motivations for paying this much can be based on traditional performance-related metrics.
Maybe advertising quality and making a costly signal by means of a marquee signing is as a much a goal of Manchester United as any other when it comes to transfers of late?
Then again, maybe this is a backdoor strategy to profit-maximising that considers the long run future in tough times. Perhaps these type of mega transfers will ensure a steady flow of new young fans? If buying a player for £155m is about advertising as much as anything else, maybe such sums could be rationalised.