Whether Ann Coulter likes it or not, soccer’s popularity in the U.S. is growing. As Americans become more attached to the game, they can’t help but notice some of the oddities of the soccer world. Perhaps most glaringly: How do so many small (and often poor) countries outshine larger ones despite imbalances in wealth, infrastructure, and size of talent pool?
For instance, Ghana, with a population of 25.8 million and gross domestic product per capita of $3,974, was able to knock the United States out of two straight World Cups, in 2006 and 2010, despite the U.S. having more than ten times the population and GDP per capita. China and India are perennial FIFA bottom feeders even though the two countries make up almost a third of the world’s population. Australia, despite having a world-class GDP per capita, continuously struggles to make it out of the group stage.
Given this anecdotal evidence, it seems easy to draw the conclusion that money doesn’t really matter in soccer; all that’s needed to succeed is nationwide passion for the game, good management and a little bit of luck. This story shouldn’t be unfamiliar to Americans, who prize parity in their sports leagues. After all, the NFL, MLB and NBA all institute measures like revenue sharing to ensure that large market teams don’t dominate smaller ones.
On the other hand, FIFA, international soccer's governing body, has no such parity measures. Intuitively, wealthier countries should then have access to the best sports infrastructure, which would lead to better soccer teams. As we’ve already seen, this hasn’t necessarily been the case in the World Cup’s history. Somehow, poorer countries manage to outperform richer countries despite a seeming resource imbalance. This seems to defy common-sense logic.
However, simply using national wealth to measure World Cup success would be naïve. Soccer players participate in an international transfer market where their home country is largely irrelevant. Often, players that represent national teams from poor countries play in wealthy European leagues with access to better training and higher salaries than would be available in their home countries, making home conditions unimportant to their development as soccer players. Yaya Touré from the Ivory Coast makes $19.2 million in salary playing for Manchester City, while Clint Dempsey, captain of the U.S. Men’s National Team, makes only $6.7 million playing for the Seattle Sounders in America's MLS. Comparatively, the 2013 GDP per capita was $3,012 in the Ivory Coast and $53,143 in the United States.
This begs the question: If we instead focus on the actual, monetary worth of the players on national teams in the World Cup, can we explain how poor countries like Uruguay and Ghana are able to outclass richer countries like the United States and Australia? If our traditional view of economics holds true, teams with more valuable players should be more talented and enjoy more World Cup success, irrelevant of national economic or social conditions.
To find an answer, I used data from TransferMarkt, a German professional soccer statistics site routinely quoted in the media, to calculate the average “market value” of the players from each national team in the 2006 and 2010 World Cups. Also known as “transfer values,” these data predict the sum that a player would fetch if transferred from one soccer club to another, making individual market value a useful indicator of player worth. By looking at the average market value of the players on each national team, we thus have a rough estimation of national team worth. Using these data and controlling for potential confounding variables, I created a statistical model to predict the effect of average player market value of a team on its World Cup success.
The resulting model gives conflicting results on the effect of money on World Cup success. The average player market value of a national team does have a statistically significant effect on a number of World Cup performance indicators, such as how far a team advances or whether it makes it out of the group stage. However, the size of that effect is relatively small. For example, a team would have to increase the market value of its players by an average of $8.2 million each in order to advance an extra round in the tournament. To provide perspective, the average market value of the U.S. Men’s National Team in 2010 was $2.4 million. According to the model, the entire squad would have had to be replaced with men almost five times more valuable in order to advance an extra round.
The results suggest that although money may indeed have an effect on World Cup success, there are other factors at play that make transfer value an imperfect predictor. In fact, a report by ING showed that if we use just team market value to predict the champion of this World Cup, Spain would be the favorites.
Spain didn’t even make it out of the group stage this year. Clearly, no matter how you look at it, a winner not does money make.