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New York City FC and market inefficiency

While Atlanta United’s approach to roster building continues to be lauded, NYCFC and City Football Group are forging a different path. But which is the right one?

MLS: Toronto FC at New York City FC Adam Hunger-USA TODAY Sports

What exactly is “market inefficiency?” While the term originates in business economics, it has become very familiar to baseball fans with an interest in sabermetrics, or the empirical analysis of baseball statistics. In the world of finance and economics, an inefficient market alludes to when stocks are inaccurately overpriced or underpriced in relation to the market at large (this is an oversimplification but work with me). In sports, it’s meant to indicate when athletes are either overvalued or undervalued based on variable determining factors (salary cap implications, general contract valuations, or their skill set, for example). To take advantage of this phenomenon, a person (or team in this instance) would, simply put, have to “zig” while the rest of the competition “zags.” The complexity lies in determining just when (and how) to “zag.”

How does this apply to New York City FC, you may ask? Well, this article comes at a time in the offseason when Atlanta United is receiving a fair amount of praise, and rightly so, for their willingness to spend money on sizable transfer fees (sizable in terms of MLS, that is) for young and talented players, mostly in South America. For many MLS pundits and fans, this is seen as a still widely untapped market for MLS teams to capitalize on. This is because countries like Argentina, Brazil, and Colombia continue to produce elite level talent that play throughout all of Europe’s top leagues. The rationale then becomes, why not try to acquire some of that talent before the big clubs in Europe take notice of them, put that talent on the pitch for a year or two, and then turn a nice profit when those European clubs offer a sizable transfer fee? It definitely is sound logic, as well as sound business.

Even if MLS takes a percentage of the transfer fee, the money a club takes in can go toward allocation money, their USL team, or even improving their training facilities. All important investments to be sure. And when you look at players like Diego Valeri or Miguel Almiron, the impact on the field is irrefutable. So in terms of rate of return and actual soccer performance, the benefits are fairly evident. Facts like these — along with the collective goodwill and praise that teams like Atlanta United have received for these moves and potential moves — has put many a NYCFC fan at odds with ownership. A consensus feeling for the fan base this winter has become: “why can’t we be more like them?”

While Atlanta United’s strategy is no doubt impressive, it also plays to their manager’s strengths. Tata Martino has a lot of deep connections in Central and South America, and can relate to these players in a way that few other MLS coaches could. Rightly so, Atlanta is leveraging this tactical advantage in that corner of the globe. But if we zoom out and bring our focus back to NYCFC, it could be said that the Boys in Blue are doing the same thing with their young manager, Patrick Vieira. A former French international who honed his craft in the top leagues of Europe, it’s hard to imagine Vieira having a deep imprint in the Latin American markets. On the other hand, he does have similar connections throughout Europe, and NYCFC have been taking advantage of that.

This thought came to mind as the club announced the trade of Frederic Brillant to D.C. United in exchange for $75K in allocation money. One of the first signings made after Vieira took over as manager and one of the club’s first-ever using Targeted Allocation Money, Brillant’s signing was the first in a series of moves where unsung players were brought in from first division teams in the lower tiers of European football, or from lesser division teams of more prominent European leagues. Here are all of the recent European acquisitions the club has made with Vieira as manager:

European Impact on NYCFC

Player League Acquired From Salary - USD Value (via Transfermarkt) - USD How Acquired 2017 Club Form (via
Player League Acquired From Salary - USD Value (via Transfermarkt) - USD How Acquired 2017 Club Form (via
Frederic Brillant Jupiler Pro League $319,667 $768,592.50 Free Transfer 6.71
Maxime Chanot Jupiler Pro League $383,000 $1,182,450.00 Free Transfer 7.11
Alexander Callens La Liga2 $180,000 $945,960.00 Free Transfer 6.75
Alexander Ring 2. Bundesliga $376,667 $945,960.00 Free Transfer 7.16
Andraz Struna Ladbrokes Premiership N/A $591,225.00 Free Transfer 6.92
Anton Tinnerholm Allsvenskan N/A $2,069,287.50 Free Transfer N/A
NYCFC European Acquistions 2016-2017

Since 2015, the club’s largest and most glaring needs were on the defensive side of the ball. Over the course of Vieira’s tenure with the club, they have brought in players like Brillant, Maxime Chanot, Alexander Callens, and Alexander Ring. The additions of Callens and Ring — along with Chanot having a full offseason with the club — resulted in a vastly improved defensive effort this season. And now the club has brought in Anton Tinnerholm, the 2017 Allsvenskan (the top flight in Swedish football) Defender of the Year. After spending much of the season trying to cobble together adequate play at right back between Ethan White and RJ Allen, Tinnerholm looks to be another major upgrade to the backline.

Looking at the table above you’ll notice one key common denominator: all players came on via free transfers. While teams like Atlanta spend gobs of money in transfer fees, and teams like Chicago Fire and Orlando City SC send barrels of allocation money to other teams to acquire players, NYCFC has discreetly uncovered talented players nearing the end of their contracts and signed them to moderately fair salaries within the bounds of the MLS salary cap, efficiently utilizing their coffers of allocation money. While fiscal responsibility won’t get many fans excited, it is a necessary skill in a league with strict spending restrictions. For instance, according to the data from, Ring and Chanot were the second and third best players on the team, trailing the one and only David Villa in form for the 2017 campaign. That is a huge win if you’re Claudio Reyna, Patrick Vieira, and the City Football Group scouting department.

Of course, this is not what many in the fanbase want to hear. Many want to see CFG open the checkbook and pay whatever it takes to get the next Latin American starlet to come play in the New York City blue. They don’t want to see other teams within MLS spend big on young exciting talent only to have their favorite team sign unsung players out of Europe. When you couple that with the team’s recent forays into acquiring Designated Players, it makes for a ho hum, even depressing offseason while other fanbases are bursting with excitement. But let’s be honest with ourselves, no one else in MLS is doing what Atlanta United is doing.

Toronto FC v Atlanta United FC Photo by Kevin C. Cox/Getty Images

Owner Arthur Blank and his staff are trying to set a new bar when it comes to how owners do business in MLS. And you have to give them credit for it. Even just this week they broke the bank yet again, sending $1.65M in allocation money to Portland in exchange for Darlington Nagbe. With the transfer fees they have paid the past two winters on players like Almiron, Josef Martinez, and (seemingly in the works) Ezequiel Barco, it appears money is no object for Atlanta United’s ownership and front office. The hard truth is, though, that Atlanta United cannot build the team they want without spending this kind of cash.

The club hired Tata Martino most definitely because of his South American connections as much as his ability to coach a well-run soccer club. South America is a hotbed of talent which often has many European teams coming over to pluck their youngest and brightest in hopes of finding the next Messi, Aguero, or Neymar. If you want players like these, you have to be willing to spend. Clubs in countries like Argentina and Brazil are used to receiving sizable sums for their young starlets. Trying to maximize Martino’s impact while gripping tightly to your wallet would be defeating the purpose.

At the same time, NYCFC has spent money as well, but to call their spending ill-advised would be generous at best. So far the club’s highest priced players have been Villa, Frank Lampard, Andrea Pirlo, Mix Diskerud, and Maxi Moralez. Outside of Villa, there have been issues with all of the other signings, though the jury is still out on Moralez (who’s also more on the “cheap” side when it comes to Designated Player salaries). So not spending big the last two winters may have been a good thing considering the club’s short history. Instead of swinging for the fences they’ve done their best to do their homework and find gems hidden in the rough.

While Vieira and CFG’s prowess leans toward Europe, they have made inroads in Central and South America as well, albeit with middling success. In the same winter that Brillant was signed the club brought in Ronald Matarrita as their other TAM signing. Mata, while a bit injury prone, has proven to be a revelation who many think is bound for the bigger clubs in Europe sooner rather than later. CFG also plucked Yangel Herrera and loaned him out to NYCFC on a two-year stint, allowing him to learn and develop under Patrick Vieira. Herrera not only supplanted Pirlo in the Starting XI, he quickly became an essential player to City’s success in 2017. And now Herrera’s U-20 World Cup teammate, Nahuel Ferraresi, is slated to join the club this winter as well. The 19-year-old central defender will be coming from a successful campaign in Uruguay, where he helped Club Atlético Torque get promoted to the Uruguayan Primera División. By all reports, he should be able to make his way into the Starting XI before too long, much like Herrera did last season. And there’s even more news breaking lately, with the club rumored to be going after Jesus Medina, a young attacking player from Paraguay.

But it took a bumpy road to get here. Before finding players like these, NYCFC trudged through players like Jefferson Mena, Steven Mendoza, Andres Mendoza, and Javier Calle. It hasn’t been all great, but the team has seemingly learned from some of their initial mistakes in scouting and roster building. Following those mistakes, they’ve pulled off smarter acquisitions that will hopefully continue in the future.

As mentioned ad nauseam this winter, NYCFC has one open Designated Player slot at the very least due to Andrea Pirlo’s retirement (perhaps two if they decide to use TAM on Maxi Moralez). With that slot, one hopes that City has learned from their mistakes — much like they have in the Latin American market — and will take those same principles that they used to identify players like Chanot and Ring, and leverage that into finding the ideal Designated Player who will be worth every dollar.

Will that be the case? Stay tuned this winter.