Championship bang for buck – who gains most from transfer window investment?

Never before has the January transfer window presented such a financial temptation to Championship club owners. This is the last opportunity to try to improve promotion chances by investing in major squad changes – in hope of accessing the obscene £ millions handed-out in the English Premier League.

Estimates vary, but a commonly quoted figure is a £230m promotion prize this year.

So why wouldn’t club owners break the bank to strive for promotion? After all, if you could secure players that would increase your promotion chances by 10% – the expected return on that investment is £23m (i.e. 10%*£230).

Well, apart from the risk of not getting promoted and financial fair play penalties, the potential effectiveness of any investment heavily depends on a team’s current position.

To illustrate this I’ve used a model that simulates 5000 possible Championship outcomes, to show the effect on promotion chances for each team, assuming the same level of investment. For example, if each team, in isolation, could improve their squad in a way that increased their goal difference by an average of 0.34 per game (chosen because it increases expected end-of-season points by around 5), it would have the following effect:

Team Current promotion chances from model Implied probability from market odds* Increase in promotion chances from a 0.34 improvement in goal-difference per game
Middlesbrough 89% 88% 8%
Derby 70% 71% 18%
Hull 66% 50% 21%
Brighton 18% 20% 21%
Ipswich 17% 13% 19%
Burnley 15% 20% 18%
Sheffield Weds 7% 8% 12%
Brentford 6% 6% 12%
Birmingham 4% 3% 7%
Cardiff 3% 2% 8%
Reading 2% 3% 5%


I’ve also compared my model against market odds to check for consistency. They’re reasonably consistent – other than Hull and Ipswich, who I tend to over value compared to the market and Burnley, who I under value.

This shows that the biggest promotion bang for buck is for the group of teams below Middlesbrough – who would see the greatest increase in promotion chances from team improvement.

Middlesbrough’s improvement is smaller because their chances are so high already. But actually, further investment in Boro’s squad makes strong financial sense, because any reasonable improvement in chances brings near certain promotion – so any investment comes with little risk.

This is all horribly theoretically, but intuitively it makes sense that spending to improve promotion chances is most effective for those teams in realistic reach of the top 2. Below that and you’re in to the potential lottery of the play-offs as the only promotion chance – so any sizeable investment is risky.

Also, in the real world there are many other factors that will influence spending decisions, including:

  • Teams won’t invest in isolation. Most of the clubs in sight of promotion are likely to invest heavily – so investment may not be to improve relative performance, but to prevent falling behind free-spending rivals.
  • There’s no guarantee than spending will improve performance (although that doesn’t usually stop teams spending).
  • Players that would improve performance won’t necessarily be available, and those that are will be in high demand from everyone else.
  • There are other ways to improve performance – e.g. managerial change, an action which Norwich deployed successfully last season.

Even so, this feels like a significant year for Championship clubs. It’s when promotion can transform a team’s long term future – so Derby, Hull, Brighton, Ipswich, Burnley, Sheffield Wednesday and Brentford – this is the year to go for it.

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