Are Brazilian Players Overvalued in the Transfer Market?

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Are Brazilian Players Overvalued in the Transfer Market?
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Brazil has provided the world with some of the best footballers ever to have played the game, and, naturally, the transfer fees that some are able to command reflect their place at the top of the game.

This summer, for instance, we have seen the brightest light of Brazilian football, Neymar, make the switch to European football for a phenomenal fee of €57 million, per Goal. Was he overpriced given his ability and potential to draw advertising revenue? The financial men in football would probably say not.

However, he is far from alone in terms of Brazilians who have moved for big money in 2013 alone. Fernandinho, Marquinhos, Paulinho and Willian also have all moved to clubs this calendar year for fees of €20 million or more, with only new Tottenham signing Paulinho currently in the Brazil national side. They are massive numbers.

At this point, it is important to note a couple of things. Brazilian football was the most active market in world football last year, with 696 incoming transfers and 618 outgoing, according to Global Post. There is an enormous number of professional players in the country and most fees are negligible.

However, rather than rule out Brazilian players being overpriced on that basis, it is important to see whether nationality has any effect on bigger-money transfers.

Bleacher Report's Callum Fox recently wrote on the "allure of Brazilian footballers" internationally, stating that in "major" transfers, €522.5 million has changed hands to sign Brazilian players since 2010 alone.

It is a gigantic figure, but one that is set to increase before the end of the transfer window with several high-profile Brazilian players still possibly set to move.

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Marquinhos was a big-money signing for PSG this summer.

However, with the standard and quantity of high-class Brazilian players, is that figure necessarily surprising? Is the €35 million Marquinhos cost PSG this summer, per Goal, inflated because of his nationality, for example? Or is it simply that the French club went above his market value to secure a potentially world-leading talent? I would argue the latter.

There are, of course, cases where nationality makes a difference. Neymar is evidently more marketable because he is Brazilian. Had he been Chilean, for example, he would not have held the same value in terms of marketing to a large population, or the mystical allure that Brazilian stars carry.

Since the days of Pele and Jairzinho, Brazilian superstars have enthralled audiences worldwide with their individualism and technique. They are masterful on the ball and, until recently, have been somewhat unknown foreign quantities. 

Nationality was undoubtedly a major reason behind the marketing success of Ronaldo and Ronaldinho in recent years, for example. They were different from European and American players as well as being exceptional footballers.

Neymar's signing will open up Brazil for Barcelona, with yet more people set to watch every game they play. Whether it will bring extra revenue remains to be seen, but it will add to their brand value to sponsors. The same could also be argued of Lucas Moura, whose €45 million fee was clearly above market average for equivalent players.

For Marquinhos and Thiago Silva—two defenders who have moved for exceptional sums—the argument is less valid. Their inflated fees were surely less nationality-based—with neither being a hugely marketable asset—and more based on ability. When it comes to Paris Saint-Germain and their cash reserves, most fees are inflated.

Buying from Brazil can be expensive, then, and certainly when compared to less powerful economies. Had Manchester United signing Angelo Henriquez been playing for a leading Brazilian club rather than Universidad de Chile, he would have cost considerably more than the £4.8 million that he moved for last summer, per Transfermarkt.

However, the Brazilian league is a hotbed of poor financial management and, therefore, there can be great value to be had as clubs search around for a quick cash injection to get them through the coming period.

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Coutinho—a Liverpool bargain?

Shakhtar's purchase of international midfielder Fernando from Grêmio earlier this summer looks a steal at €11 million. Liverpool playmaker Coutinho is already worth much more than the €10 million the club paid earlier this year, per Transfermarkt, while under-23 international centre-back Juan Jesus joined Inter Milan for just £3.3 million last summer, per Transfermarkt.

There is clearly, then, value to be had for highly rated Brazilian players, while if you are prepared to scout at lower levels and youth teams, the values drop significantly.

There are odd occasions when the player's Brazilian nationality can add to their financial value, but it is reserved for truly special cases. Brazil's strong domestic market has also seen fees increase, but not to a level that makes it uncompetitive. It is perhaps only the financial woes being experienced in Spain and other parts of Europe that may make that seem the case.

Clubs in Spain and Italy in particular have long benefited from the Brazilian market and, for financial reasons, are now seeing that supply line slow. It is not Brazilian players being overpriced that is the issue, however, it is more that the clubs no longer have the wealth they previously enjoyed.

For Portuguese clubs, who can use third-party ownership to their advantage, Premier League sides and clubs in emerging nations in Eastern Europe, Middle East and Asia, Brazil remains a consistently good-value supply line.

The balance of football is changing and, as ever, economic factors are the driving force.

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