An option pricing framework for valuation of football players

In this paper we develop a contingent claims framework for determining the financial value of professional football players. Contingent claims style modelling is used to develop two models. The pricing of football players is based on a performance index such as the Carling Opta Index. Unexpected events such as injuries are included into the models as Poisson jump processes. The value of a player varies from club to club, depending on club turnover and the total number of performance points generated by the entire team.