The opening of the January transfer window gives Arsenal FC a chance to fill some of the holes in their roster to better their title hopes. However, looking at the center forwards available, it seems that Arsenal are more likely to find back-up to Olivier Giroud rather than an upgrade. If they do want an upgrade, they may need to look to Italy and to a player who left their main rivals for the title.

The Difficulty of Buying Big in January

Olivier Giroud: Ozil will make his teammates better players

Despite his fine season so far, Arsenal need to bring in another center forward to at least give their overworked center forward a rest.

Arsenal’s lack of depth behind Olivier Giroud has been cited as a potential issue when it comes to their title challenge. Realistically, the most likely solution to this issue is to loan a player like Dimitar Berbatov, who knows the Premier League and whose quality is proven, or Alvaro Morata, a talented young player with the ability to make an impact although inconsistently. This gives Arsenal an option other than Giroud, while keeping funds and a roster spot available for a long-term center forward signing in the summer. This is fine if one believes that Giroud is good enough to be Arsenal’s main center forward to challenge for the title this season, and that his drop in form from the beginning of the season is mostly do to fatigue because of overuse.

However, maybe Giroud is regressing to the mean. It may be that his excellent performance at the beginning of the season was due to random variation. In that case, if Arsenal wish to win the title, it would be important to find an upgrade over the Frenchman. However, it is highly unlikely that any loan deal or short-term buy would lead to Arsenal upgrading over their current center forward. Most of the clear upgrades are unlikely to leave their clubs this January (Robert Lewandowski (signed, sealed, and will be delivered to Bayern Munich), Luis Suarez, Edinson Cavani, etc.). Even those with the potential to be upgrades play for clubs who are competing for league titles (Jackson Martinez), a Champions League title, a place in next season’s Champions League (Julian Draxler, Giuseppe Rossi), or are fighting to stay in the top flight of their country. That makes the marginal cost of selling high for these clubs (also the marginal cost of moving is high for the player leaving a club in contention for a league title and/or Champions League title…like Diego Costa).

Economics 101 of the January Transfer Window

Last season’s Aston Villa represent an example of this (an example that will be simplified in this piece). Say a club wanted to buy Christian Benteke from Aston Villa, and that Christian Benteke provides 20 million pounds of marginal value to Aston Villa with respect to their squad the (his value above the next option if the next option is above replacement level). At the beginning of last year’s January transfer window, Aston Villa were in a relegation battle. Assume that staying in the English Premier League provides a net marginal benefit of 70 million pounds (combination of prestige/pride for the owner(s) of the club, increased TV money, and increased matchday revenue from being in the Premier League) for Villa. Finally, assume, that with Benteke, Aston Villa believe they will stay up, without him they believe they will get relegated, and that he is the only player who could swing their season like that (only high leverage roster element). This means that Benteke represents 90 million pounds of marginal value for Aston Villa in the one season, in this simplified example. If Aston Villa have full control over the sale, they would not be willing to sell for less than 90 million. In this simple model, a sale for less than 90 million means represents a net marginal cost for Aston Villa, and, therefore, a sale they would not do. Clubs, like people, attempt to maximize their marginal benefit.

Christian Benteke - Aston Villa striker |

Last season, Christian Benteke was more valuable to Aston Villa that to any other club, making a sale in January close to impossible.

This is why sales in January are more difficult than in the summer. Teams find themselves in situations, better or worse than they expected back in the summer, and this makes the players they have on their roster more valuable to them. This valuable of assets under a club’s ownership is exacerbated by fact that this phenomenon persists throughout the football player market. That means the ability for clubs to invest the money they would have made from a sale is greatly diminished. What good is 30 million pounds in cash if it can not be spent on players? Unless a club is in a liquidity crisis and needs cash-on-hand to pay off their debts, there is little incentive to sell. Even if there is a chance players can be brought into replace the sold player, those acquisitions are far from certainties. Therefore, even if the expected value of their end-of-season outcome does not change, the variance in the expected outcome has increased. Since clubs, like people, are generally risk averse, it is unlikely a club would accept increased risk exposure without receiving a premium.

Therefore, the only way for a club to acquire a player from this situation is to pay what the selling club wants, compensating for value of the player, the situation, and the selling club’s distaste for risk exposure. For a club like Manchester City or PSG, it does not matter because of their relative lack of scarcity of liquid assets compared to all other clubs. Any particular purchase is a drop in the bucket relative to the money they have to spend (think of a billionaire spending 10 pounds on an average milkshake). The opportunity cost for any individual signing is much smaller for them.

A club like Arsenal must operate more efficiently with their money in order to compete. Spending 30 million pounds on someone who offers 10 million in marginal benefit to Arsenal represents more than a 20 million pound loss. The 30 million pounds could have been best spent on someone who offered 40 million pounds of value, an opportunity cost of 10 million pounds (ignore the complexities of evaluation given multiple periods of time). Given the much more finite resources at their disposal, the opportunity cost for Arsenal is larger than for PSG or City. This makes the true marginal cost of the transaction greater and equal to 30 million pounds. Therefore, paying 25-30 million pounds for a player who is not an upgrade over Giroud, and therefore has a low marginal benefit, is a terrible decision for Arsenal to make. It is clear that loaning a center forward for second half of the season is preferable.

Mario Balotelli: Arsenal’s Chance to Buy Low on World Class

There may be one player who has the potential combination of current ability, future potential, and availability to merit an attempt to buy from Arsenal: Mario Balotelli. As has been written before, Arsenal lack a center forward with athleticism and 1-on-1 ability that, in part, defined a center forward like Thierry Henry. Balotelli’s combination of physical gifts and football skills give Arsenal a solution to that squad deficiency. He can dribble at and past defenders; he can run the channels, making himself available for through balls and balls over the top; he can play with his back to goal and involve himself in the build-up. He has the ability to play a similar role to the one Giroud plays now for Arsenal. Unlike Giroud, he has the ability to win games individually. He can create and score a goal on his own, a feat Olivier Giroud is unlikely to accomplish. That ability, especially in matches where teams set up to primarily stifle the Arsenal midfield, could prove invaluable in turning losses into draws and draws into wins. He can do everything one would want in a lone center forward (and the evidence suggests that is the way to play him).

One argument with his play, even at the best of time, is his lack of efficiency. Even though he takes quite a few shots to score his goals, the lack of goal-scoring potential in the current Milan side means that Balotelli should probably shoot on sight. The opportunity cost of him taking a shot is relatively small at AC Milan, due to their lack of creativity and finishing, meaning his frequent shooting is probably beneficial for Milan. On a better team with better creators and goal-scoring threats, it is likely that the efficiency of his performance rises, as the need for him to carry the side is greatly diminished.

At 23 years-old, there is still plenty of room for Balotelli to grow as a player. Obviously, he can improve his footballing skills, but maybe more


There was a time Arsenal had the best center forward in the world. Buying Mario Balotelli gives Arsenal a chance to say that again.

importantly, Balotelli has yet to find consistency in his performance. With the skills already at his disposal, consistency, without improvement of his skills, would put him in the conversation as the best center forward in the Premier League with Luis Suarez and Sergio Aguero. His ceiling as a do-it-all center forward means that he could become the best center forward in the world, as long as he properly develops.

The question then becomes whether Balotelli has the work ethic, and more importantly, the character to reach that prodigious ceiling of his. This is where Arsene Wenger must make a sound judgment about the infrastructure at Arsenal. If a team wants to extract the most out of Balotelli, they must make a commitment to him. There is no point in buying the Italian if they are not going to invest the effort in developing him as a player and as a person. If Wenger believes that Balotelli is willing to change, can mature, can develop, and that Arsenal has the infrastructure to allow him to do so, then there is no reason not to go after Balotelli. If Wenger feels that Arsenal is not an environment conducive to his development on and off the pitch, then Arsenal would do best staying away from introducing a potential toxic element into Arsenal’s close-knit dressing room, and wasting their money, time, and effort on a lost cause.

When it comes to availability, AC Milan, even without Balotelli, are unlikely to get relegated from Serie A. At the same time, with Balotelli, AC Milan are unlikely to make up the 17 point gap between them and third place Napoli. Assuming that AC Milan do not care to participate in the Europa League next season, the marginal benefit of Mario Balotelli, this season, is small for AC Milan. With rumors of Silvio Berlusconi wanting to get rid of Super Mario, it may not take much to convince AC Milan and Balotelli to end their tenure together. It is difficult to see any player wanting to stay at a club when he is not wanted by the owner. A transfer fee of 20-25 million may be enough for the Rossoneri, and Balotelli’s wages should not be a problem for Arsenal, especially since he took a pay cut when he arrived at AC Milan.

When it comes to availability, the biggest problem will be Mario Balotelli’s last stint in England. With the amount of exposure, fair and unfair, he received as a Manchester City player, Balotelli may not wish to subject himself to more scrutiny from the English media. Instead, he may be better off going to a club like Atletico Madrid, a club with high level aspirations, but clearly the second club in the city of Madrid. What hurts Arsenal is that this problem is outside of their control. Unlike a club like Real Madrid, who impose a level of control/have a strong voice in the media, English clubs, including Arsenal lack that direct power. Even an increase in wages and playing for a Premier League title (something he has already done) may not represent enough compensation to subject himself to the English media once again.


The opportunity to buy low on a potential all-world player is rare. There are obvious risks associated with buying Mario Balotelli that would lead to the potentially low price of acquiring him (with respect to wages and the transfer fee). However, if Arsenal can manage Balotelli so their exposure to risk is mitigated and get the Italian to reach his potential, then Balotelli represents another game-changing signing for the club, one that can win them the title this season, as well as put them on the path of perennial contender in England and Europe.