How clubs navigate changing economic landscape of Liga MX

Overwhelming evidence demonstrates that in recent times, the success of a football club comes with economic ambition and sports intelligence.

The previous argument was mostly seen in European leagues like Germany, France, Spain, Italy and England. It’s also seen in the UEFA Champions League, in which teams with substantial economic power dominate the local and international competitions.

Nevertheless, in lower-class leagues like the Liga MX, the model of investing considerable capital is gaining popularity.

The factors are straightforward; investing a significant amount of money can get you a championship team. However, does this work on a league with two tournaments per year and a playoff system like the Liga MX?

2013 MONEY BOOM

In the late 2000s, the market of the Liga MX was very low priced. The most significant acquisitions were below $5 million, meaning the negotiations for a talented player were around $2 million, or even less.

The transaction that broke the market happened in the 2011-12 season. In the blink of an eye, Santos and America negotiated for Ecuadorian striker Christian Benitez. America paid $9 million for his services, doubling the previous most expensive transactions.

Benitez was living proof that the Mexican market could afford talent at a higher price. From 2013 to 2019, transactions of $5 million or more per player became an annual activity in the Liga MX. And at the same time, it was limited to certain clubs.

Eleven out of 18 clubs could afford at least one player in the $5 million to $7 million range: Queretaro, Toluca, Pumas, Tigres, Monterrey, Santos, Cruz Azul, America, Chivas, Pachuca and Leon.

Seven teams obtained at least one footballer from $8 to $9 million: Chivas, Tigres, Monterrey, Pachuca, Xolos, Cruz Azul and America.

And just six clubs invested $10 million or more in a player or multiple players: America, Chivas, Tigres, Monterrey, Cruz Azul and Pachuca.

SPENDING CHART

In Mexico, five teams surpass the rest in economic power. Those entities have made a significant financial effort since the 2012-2013 campaign:

Monterrey – The CONCACAF champions spent $123 million.
America – The most laureated team in Mexico invested $117 million.
Cruz Azul – The third most popular team of the league reached $104 million in reinforcements.
Tigres – The team of the decade spent $100 million; however, Tigres made an upper-level effort in the free agency.
Chivas – The country’s most traditional team invested $100 million in Mexican talent.

Even when the numbers of the most relevant teams double or triple the budget of their pursuers, the total playoff appearances of Cruz Azul and Chivas are still less than Santos, Toluca, Morelia, Pumas, Pachuca, Xolos and Leon. 

COMPETITION FOR EVERY BUDGET

Operating with a lower budget is not a synonym of failure. In Mexico, eight out of 18 teams classify to the liguilla. And it doesn’t matter the position in which they enter.

The playoffs were made to generate surprises. They are exciting because the majority of the time, the best team of the competition doesn’t win.

In the last decade, only two out of 40 clubs that finished first won the league, while the eighth-place team lifted the trophy three times.

In the Clausura 2019, Club Leon had the best season ever in the Liga MX. They broke the points record and streak of consecutive victories. Leon ended in first but lost the championship game against Tigres.

Every semester there’s one or a couple of clubs that over-perform their football capacity. It’s normal to have surprises in short tournaments, because in 17 weeks the margin of error decreases. There’s not enough time to recover a deficit of points.

Indeed, any team can qualify for the playoffs and beat the No. 1 seed. But not every club can be a champion.

OTHER CONTENDERS

Over the past several years, the relevance of clubs like Santos, Pachuca and Leon has risen above Chivas and Cruz Azul. Combined, they’ve spent $111 million since the 2012-13 campaign. Nevertheless, they combined for six championships in the last decade, five more than Cruz Azul and Chivas together.

A football team represents a luxury, especially in Mexico. It is not always a reliable business. However, Grupo Pachuca (owner of Pachuca and Leon) and Grupo Orlegi (owner of Santos) are two enterprises that profit directly from their football clubs. Or to put it into simple words, they survive from football.

While Tigres own a fleet of players in South American leagues, Grupo Pachuca and Orlegi base their sports model on thorough scouting for the first team and solidifying their professional academies.

Sometimes they buy cheap, but they sell expensive. Pachuca profited $20 million from the transactions of their graduates, Irving Lozano and Erick Gutierrez, to PSV. Santos got the same quantity for Darwin Quintero and Christian Benitez when they left for America, three times more than their initial cost.

The transfer records of Grupo Pachuca and Grupo Orlegi demonstrate that both can disburse $20 million in one year and not invest a dime in the next tournament. However, their market value rarely decreases out of the top eight.

WHAT’S THE REAL FORMULA, THEN?

In a study by Soc Takes in collaboration with mathematician Luis Felipe Jacobo, the results established that the annual investment doesn’t have a significant connection with the yearly position, finals played and titles achieved. However, the study reveals that the relation between the market value and league finals disputed is relevant. And at the same time, it’s increasing.

It makes sense.

Since 2013, America, Tigres and Monterrey adapted to a more demanding market. They began to build their vision way before the rest of the league realized that football was changing — not only in the economic aspect, but their sports intelligence also improved exponentially.

For example, America and Monterrey have the best academies in the country. And Tigres began their expansion to South America; they own more than 30 players outside of Mexico and loan them to South American and Mexican squads.

Year after year they acquired talent, and — most importantly — retained their base of players by offering them substantial salaries. With time and exponential relevance, the squad value increased.

Currently, America, Monterrey and Tigres don’t need to buy a whole squad every summer. Their only mission is to fill a couple of spots because they already boast an excellent and competitive base of players. And if someone important leaves, they bring in another asset as valuable as the last one.

Thirteen out of 18 teams can find one or a couple of talented footballers for a fair transfer or loan price. But they can’t retain them. Half of Mexican football lives out on loans. And part of the business model of Pachuca, Santos and Leon is to buy and sell the talent for profit.

The study shows that the tendencies regarding the value of a squad and finals played are increasing. While there’s no certainty of predicting the future, this correlation grows annually in Mexico.

Follow Luis on Twitter: @LFulloa.

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