Initial Valuation
Players valuation method
Last updated
Players valuation method
Last updated
The Initial Valuation is the process by which the estimated future transfer value of a player in the football transfer market is calculated.
This value is not the player's current market price, but rather a technical and objective reference used to determine how much capital will be raised when the player is tokenized.
The main purpose of the Initial Valuation is to establish a baseline reference price for the player, also known as the Initial Price.
Based on this reference value, the following are calculated:
How much each token represents.
The total offer available to investors.
The potential return if the player is transferred.
To calculate it, the average from the most reputable football data sources is taken, and then this value is adjusted using a Risk Premium, which considers the player's age and performance.
We can summarize the process in two steps:
Obtain the average market value from top specialized football sources.
Multiply that value by a Risk Premium Coefficient.
Initial Price = Average Market Value × Age Coefficient
👉 Which are the specialized soccer sites?
The main reasons for using these sources are as follows:
● They are public and free sources of free access.
● Different variables and methodologies are considered.
The purpose of calculating a Risk Premium is to adjust the Market Value downward to include in the Initial Valuation those variables that a Market Value does not contemplate as they are inherent to the WIN business model.
The Risk Premium is composed of two elements:
A. Free Pass
B. Discount for transfer less than 100%.
A. Pase Libre (Out of Contract): The Free Pass occurs when a player is transferred without being contractually bound to any previous club and without a transfer agreement. In this case, the FIFA solidarity mechanisms are not activated. This scenario implies the extinguishment of the security, which means that the investor loses the totality of his investment. For this reason, the Free Pass Premium reflects the probability of a free transfer occurring for a particular player.
The Free Pass probability is calculated considering players between 18 and 35 years of age, as this is the range allowed for WIN broadcasts. In addition to age, another key factor in the analysis is the player's performance, evaluated through indicators such as minutes played, level of competition, league in which he participates, goals scored, among others. These elements determine the probability that a player can be transferred on a free transfer.
The Free Pass risk premium acts as a coefficient that adjusts the market value of the player, decreasing it to compensate the investor for the risk of total loss of his investment in the event of a Free Pass.
B. Discount for transfer less than 100%: Currently, it is known that some onerous transfers of players between clubs are not made for 100% of the player's economic rights. For this reason, an additional adjustment is included in the premium for players of certain ages, considering the possibility that they may be transferred for a percentage less than their total economic rights.
Once this is done, to know the total value of the player's tokenized Public Offer, we need to multiply the Initial Price by the player's Solidarity Mechanism.
Public Offer is, In other words, the total value of the tokenized right and the basis on which the number of tokens will be determined.
By way of example, and based on the following assumptions for a player:
Initial Price: €1M
Training Club's Solidarity Mechanism: 5%
Token Price: €0.10
The total public offering will be €50,000, represented by 500,000 tokens priced at €0.10 each.
: one of the largest and most prestigious soccer databases in the world.
: sports statistics portal.
: a company specialized in the valuation of athletes through Artificial Intelligence.
: exclusive soccer community for key transfer stakeholders.
¿How does Transfermarket calculate the market value? Through its .
