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The Cost of a Point

​With the most recent transfer window closed, fans can finally move past rumors and focus on the game. The time for buying and selling is over, and now it’s up to the managers and players to turn that money into points. Yet, there some questions concerning just how easily that is done. Can you truly “buy” a title? How much does each point cost? And how does Arsenal stack up with the rest of the league? They’re questions I had and sought to answer below. THE WAR CHEST ​First, there’s a handful of things to define and clear up. To start, I did not do a season-by-season translation of money spent to points. The main reason being that money doesn’t disappear if you do not use it, and Arsenal fans are all too familiar with the famed “war chest” that a club can have at its disposal for the right player. There’s something to that: if I sell a player on January 31st, I’m unlikely to be able to fully recoup his value (on the field) this season. However, I could turn that around in the summer and land a new star for my club from his sale. In addition, a summer window where a team spends little, or sells a lot, combined with a winter where the money flows out will not be capture accurately with a one season snapshot. A final hypothetical: a club spends an entire war chest one summer, then nothing the following year. Yet, those same players are there. To account for all this, everything is grouped into four year sections. ​Because of this, I have only included clubs who were in the Premier League for each of the past four seasons – a total of 14 clubs (despite going down last year, Sunderland is part of this group). It is also worth noting that some, if not most, of the sales are rumors or unverified amounts. All prices are in pounds. ​Finally, this should all be taken with a grain of salt. So much costs goes into a club that we can’t accurately capture here. For example, if a club invest half of its revenue on the academy, it could reasonably expect multiple players produced for its first team. Yet, in this study, that will simply come up as profit, and therefore our expected points would be significantly lower (due to less spent). THE OUTLIERS ​Over the past four years, the cost in the transfer market for one point is 460,251 pounds. However, there are significant outliers – those beyond the previous figure – worth noting. ​The first are the two Manchester clubs. Both are averaging spending over 1.2 million pounds per point – three times the league average. If you were to remove them from consideration, the league average drops to 269,877. Also, their combined net spending over the past four years is north of 700 million, more than half of the total spent by the league (1.3 billion). Further discussion and study into this is for another day. ​Next, we have Spurs. What the club has accomplished is truly fascinating from a financial perspective and can essentially single handedly be attributed to their academy. The closest lowest net spending over the past four years by another club is West Ham, with 18.3 million. Spurs? They have a 21.3 million profit. Nearly 40 million less spent than the closest other team. Again, there’s an intriguing story here for another time. (Note: I did not have sufficient data for Southampton to complete this, so I did not include them in the study. My uninformed assumption is that they also have a profit over the past four seasons, but I was missing too many significant data points to include them in the numbers without compromising the entire study.)A DEEPER LOOK ​If we remove those three teams – which isn’t necessarily a good way to judge the data, although it’s clear that these sample sizes are too small already and significant outliers will alter our results too much – things look a little different. First, the average point cost 318,936 pounds, with clubs spending an average of 16.1 million per year. All the remaining clubs are within a reasonable distance to these averages. ​Liverpool and Chelsea sit below these numbers, as well as roughly a sixth of the cost per point of the Manchester clubs. Crystal Palace is interesting, as well. Their net (90 million) is higher than both Liverpool and Chelsea, yet their points are closer to West Ham.Finally, the correlation between money spent and points accumulated is significant - to the point that one could predict the table simply by money spent over the previous three seasons and be quite accurate. However, there is no amount you could spend to "buy a title."  United have spent more than everyone but their city rivals, yet have finished 7th, 4th, 5th, and 6th during this spell. ABOUT ARSENAL...To my surprise, the Gunners had the third highest net spending over the past four years (not including this past window). Not only is it third, but it's significantly higher than fourth - the previously mentioned Palace. Not considering the Manchester clubs, Arsenal spends three times the league average. In addition, their cost per point is third worst, also behind City and United. At 566,537 per, it's over double both Liverpool and Chelsea, and four times Swansea (who are the second most efficient spenders behind Spurs. What does that mean? Well, it goes without saying that Arsenal isn't spending wisely - but you probably didn't need me to tell you that. It also means that the argument that Arsenal refuses to spend probably isn't totally valid. First, they outspend all but two clubs (at least within this window). Secondly, there's definitely a diminishing return for spending, as shown with the two heavy spenders having the worst cost per point. There is, however, concern about how this past transfer window went. With a massive profit and a struggle squad, it was a questionable August. Will reinforcements come in January? Will Wenger make it until then?Share your thoughts on the article below and follow me on twitter @Matthew_LoganFC if you'd like to know more about this study.