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Managing the player portfolio

Recently I posted an NYA presentation on player contributions to cash flow that outlined how players could be viewed as capital assets. In part because of the recent interest in work by Howard Hamilton and Tom Worville, I’ve decided to post portions of an earlier presentation on managing the player portfolio.

Portfolio management is a field that many people dabble in as individual investors and a few people take to sophisticated extremes as professionals. You don’t have to use the fanciest quantitative models to be a successful manager, though. A few basic insights and tools can greatly enhance the health and prospects of many portfolio, including portfolios of players.

This presentation goes through some fundamental questions to ask about a player portfolio and then offers questions to consider when making portfolio decisions. It includes a case from Major League Soccer, where most salary information for players is public. In an idiosyncratic league like MLS, the benefits of portfolio management are especially apparent. With a weak relationship between book value and returns – or in player terms, between salary and performance – diversification of the player portfolio is an important strategy.

Click here for a PDF of the presentation.