Football Index: The Pogba Problem

Since Pogba’s switch back to old Trafford he’s continually been in and around the top of the index thanks to his media pull and various surrounding rumours and rifts. As you can see below, there isn’t many players I can think of who’s price is so directly tied to their dividend yield.

Pogba Football Index Price-Sept to June

In times of frequent coverage this is great for his price but in relative dry patches, like the one shown below between April and May, people often look to move money out of him.

This can often leave his price on a knife edge for some traders and the threat of huge spreads is enough to make them want out. If the pressure of his price being related heavily to dividends wasn’t enough, we’ve recently seen patches of a lose-lose situation at times. When he’s not in the media, people have been selling (which is the regular part) the second part of this has come from him being in the media for a move away from United and people subsequently selling anyway because they’re scared of his drop in value if a move materialises. It’s also possible that although a relative increase in dividends, the fact that 3p is the now the maximum win, people don’t psychologically see it as worth the potential risk. 

It has to be said though, that it was quite foreseeable that this would happen over summer after his price had slowly trended downwards over the last couple of weeks, but this doesn’t mean it’s necessarily a bad trade. If you believe he will stay, you should of fully expected the current downturn and be happy to sit on your hands and mop up the dividends, meaning come August, there is definitely still the possibility that you’ve made a good chunk of profit as well as capital appreciation.

This is reliant on him staying at United of course. Which could certainly happen. Madrid have already spent a fortune on reinforcements and Juventus have just signed Ramsey as well as being rumoured to be getting Rabiott on a free which would leave them with a plethora of midfield options and although Pogba would still likely improve that midfield, the cost may outweigh the benefits.

 

If this does happen, Pogba’s would likely to remain near the top of the Index over the next year considering he’d be going into the penultimate year of his contract making that move- and the flood of media rumouring the move- much more likely in the coming season, and of course holders wouldn’t be so twitchy during the season as they can’t just wake up to news that he’s moved to Madrid in the same way they could do during the transfer window. As you can see below, over the last season he's made much more in dividends than any other player. If he can keep that up, I'm sure he'll continue to appreciate in value.

2018-19 Football Index dividend earnings

However, should a move materialise, his downside is significantly large. There’s no denying that. I’ve heard people saying he’ll still get media because he’s Paul Pogba and his performance scores will increase but there is no way either of these things happen to the extent that justify being the top of the Index.

If he moves to Madrid, this is possibly the best of the two options. La Liga appears much more free scoring than Serie A with a lot more creativity possible. The total dividends won last season by La Liga totalled £3.92 (upto April 30th) while Serie A racked up just £2.87 in the same period. Comparing Midfield directly, La Liga had 43 wins vs Serie A's 31. 

Below you can see Madrid's comparable players performances in Media and Match Day over the last two years. 

Madrid PB Football Index

Now of course, Pogba can't be compared directly to these players as you'd imagine he would play possibly a more pivotal role. You have to think he may get on some freekicks, penalties are unlikely though with Ramos and Hazard possibly higher up the pecking order. So overall you'd expect more goals than the others but not enough to keep a £7 price tag that's for sure. 

At Juvetus he'd be even less well off with Ronaldo to compete with for everything. It's also less likely he'd play further forward if Dybala stays at the club. You can see Juventus' midfield returns (and Dybala) below and adjust how you see fit.

Football Index Juve midfielders

Currently, it's looking more likely that pogba stays, which will be music to holders ears I'm sure. Even better, he's also managed to pick up some dividend recently, grabbing 28p in the 24 days of June with consistent news coverage as you can see by his recent media scores.

Either way, I'm sure he'll continue to be an exciting (and for some, painful) player on Football Index, but one thing's for sure, him and Neymar maintaining high prices is definitely a good thing for the whole index and keeping the ceiling high, so if anything we should all have our fingers crossed for him returning to Old Trafford for preseason and beyond.

If you missed the recent transfer featured article "Relegation Revenue" and "Expiry Earnings" don't forget to check them out!

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