Skip to main content



English Auctions in the English Premier League

Football (or soccer as they call it here) is obviously one of the biggest attractions in Europe, specifically England. The English Premier League is one of the richest sports leagues present in the world, and has some of the most famous clubs (such as Manchester United, Chelsea, Arsenal, etc.). Because of all the potential for money, some of these clubs spend heavily to get the best players. They heavily bid to get players that will help them boost their team and potentially win national and European wide championships.

One such example was present this summer with John Stones, a defensive player on a team called Everton. John Stones, only 20 years old, has displayed unlimited amounts of potential. Chelsea, another very rich and popular club with a global fanbase has recently been in need of a good defender, since their best defender, John Terry, is reaching the end of his career. Therefore, like many other clubs have done, decided to bid about £20 million for him. This essentially resembled the valuation and English auction theory that was discussed in class. Chelsea’s true valuation of John Stones is not known at this point, but as can be reasoned by the optimal strategy of an English auction, this was less than their true valuation.

As expected, Everton declined this bid, revealing their valuation of John Stones, essentially that he was worth more than £20 million. After this, Chelsea actually made two more bids for Stones, with the second and third being around £30 million and £40 million, respectively. Both were declined by Everton, who decided instead to keep John Stones for the future, rather than get money.

Now, this situation isn’t exactly an auction, because the item (or in this, John Stones) was not guaranteed to be sold, but the general strategies of valuation remain. At the end of the day, we know that Everton value John Stones for more than £40 million, while Chelsea either value him at that amount or less. This makes sense, because Everton is trying to keep players for their future, while Chelsea had other options to look at. Nonetheless, this valuation will be important in the future, when other teams try to make bids, and Everton try to keep their player.

Source: http://metro.co.uk/2015/07/18/chelsea-preparing-to-move-for-evertons-john-stones-again-with-improved-second-offer-5301551/

 

Comments

Leave a Reply

Blogging Calendar

September 2015
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
282930  

Archives