Euro 2016: why the highest earning teams should go furthest

As excitement for the 2016 European Championships – which begin on Friday 10th June – reaches fever pitch, football supporters across the continent will be hoping that their nation can do them proud.

The new format of the tournament means that more teams than ever will be taking part – including, for the first time, perennial minnows such as Iceland and Albania. Whilst the odds are very much against them, perhaps they will be inspired by the success of Leicester City, who recently won the English Premier League despite being 5,000-1 outsiders at the start of the season, or Greece, who won the final of the Euros in 2004 against the much-fancied host nation Portugal.

Successes like this have such long odds attached to them because of their rarity. In the world of professional football, money speaks with all too loud a voice. Evidence suggests that the richest clubs are the most likely to triumph.

Just take the Premier League as an example. Prior to Leicester’s stunning success, since the 2000-01 season the league winners had always been in the top 3 clubs in terms of total wage bill (see chart below). And in 13 of those 16 seasons, the club with the highest wage bill finished in the top 3 league positions.

Wage Ranking

In football, as in any well-functioning labour market, the most skilled workers should attract the highest wages, because there is a scarcity of supply of such labour – hot-shot strikers are few and far between compared with, say, journeyman midfielders. So rich clubs pay the highest wages to attract the most skilled players, which brings them more success.

In theory then, the highest earning teams should be expected to perform better. Can we apply this to predict the winner of the Euros? In order to do so, we would need to have access to the confidential earnings of all the players involved. However, as a reasonable proxy we can use earnings data from the football management simulation Football Manager (FM), widely considered to be the most in-depth and accurately researched game on the market.

Taking the wages from FM 2016 of the players who have been named in each country’s squad for the Euros results in the rankings as shown below. This simple measure suggests that Spain stand the best chance of going on to win the tournament, most likely to be joined in the semi-finals by Germany, England and the current favourites France. The Spain squad also has the highest median earnings, indicating a depth of quality across the squad rather than being boosted by a few very high earners at the top.

Euro 2016

Using the rankings shown above to predict the outcome of each match, and comparing with the bookmakers’ odds, suggests that Wales (9th highest earnings, 14th favourites at the bookies) may perform better than expected and reach the quarter finals, whereas Portugal (7th highest earnings, 7th favourites) might only make it to the last 16.

Of course, there are all manner of factors that will determine each team’s chances – the unpredictability is what keeps fans coming back for more each time. But there is a reason why the top teams are so favoured, and why their players earn so much more.

Kieran Arter

Associate, Volterra Partners

Image: Football by Prakash is licensed under CC by 2.0

Share this post



t: +44 020 8878 6333

Alex O’Byrne, Associate at Volterra, is an experienced economic consultant specialising in economic, health and social impact, economic strategy, project appraisal and socio-economic planning matters.

Alex has led the socio-economic and health assessments of some of the most high profile developments across the UK, including Battersea Power Station, Olympia London, London Resort, MSG Sphere and Westfield. He has significant experience inputting to EIAs and s106 discussions as well as drafting economic statements, employment and skills strategies and affordable workspace strategies.

Alex is also experienced at economic appraisal for infrastructure. He was project manager of the economic appraisal for the City Centre to Mangere Light Rail in Auckland. He also led the economic and financial appraisals of the third tranche of the Transport Access Program for Transport for New South Wales, in which Alex developed and employed innovative methodological approaches to better capture benefits for individuals with reduced mobility.

He is interested in the limitations of current appraisal methodologies and ways of improving economic and health analysis to ensure it is accessible to as many people as possible. To this end, Alex recognises the importance of transparent and simple to understand analysis and ensuring all work is supported by a robust narrative.

Alex holds a BSc (Hons) in Economics from the University of Manchester and he was a member of the first cohort of the Mayor’s Infrastructure Young Professionals Panel.


Senior Partner

t: +44 020 8878 6333

Ellie is a partner at Volterra, specialising in the economic impact of developments and proposals, and manages many of the company’s projects on economic impact, regeneration, transport and development.

With thirteen years experience at Volterra delivering high quality projects to clients across the public and private sector, Ellie has expertise in developing methods of estimating economic impact where complex issues exist with regards to deadweight, displacement and additionality.

Ellie has significant experience in estimating the economic impact across all types of property development including residential, leisure, office and mixed use schemes.

Project management of recent high profile schemes include the luxury hotel London Peninsula, Battersea Power Station and the Nova scheme at London Victoria. Ellie has also led studies across the country estimating the economic and regeneration impact of proposed transport investments, including studies on HS2 and Crossrail.

Ellie holds a degree in Mathematics and Economics from the University of Cambridge.