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EURO 2012: Spain to Win Again, but Germany has a Chance

Press Release of June 8, 2012

DIW Berlin and Free University Berlin use economic indicator to predict the winner

Based upon team transfer values, Spain will be the 2012 European champions. At the final in Kiev, Spain will play Germany, just as in 2008, with Joachim Löw’s team most likely managing only second place, again. Using this model, the German Institute for Economic Research (DIW Berlin) and Free University Berlin (FUB) have correctly predicted the results of three major football tournaments: The World Cup both in 2006 and 2010, as well as the European Football Championship in 2008. “Our forecast model is simple, based on the market values of all players in the squad,” says Gert G. Wagner, head of DIW Berlin. Wagner and sociologists Jürgen Gerhards and Michael Mutz of the Free University Berlin performed the analyses together. “The rules of the globalized economy also apply to football. The players’ performance is realistically reflected by their market value,” Gerhards explains.

The analysis confirms the assessments of many experts about the “Group of Death,” in which Germany, Denmark, the Netherlands, and Portugal play one another in the first round. Apart from the Danes, the market values of the teams in the group are relatively close, even if their structures are very different.

“For Portugal, it is incredible how much depends on superstar Cristiano Ronaldo, who increases the overall market value of the team,” says Mutz. “Germany is more balanced. As for the most expensive player, Mario Gomez, it is still not at all clear whether he will play from the outset, or if the less expensive Miroslav Klose will.” However, although the German team has the second highest team value, it face a high risk of losing in the first round because the teams of the Netherlands and Portugal are so close.
Gerhards, Mutz and Wagner admit that their method has its weaknesses—for instance, older players who are still able to perform well, might not bring much money on the transfer market and thus be undervalued. Another weakness could lie hidden in the wide disparity between an outstanding starting lineup and an untalented substitutes’ bench.
“We also studied this and established that for the European Championships, the simple model is just as good as one that takes into account homogeneity of the players,” says Mutz. The reason is simple: the teams of Spain and Germany, which have the highest market values, are also the most homogenous.  

However, in a tournament with a maximum of six matches per team and several knockout games, more is left to chance than in a national championship with 34 or 38 rounds. One wrong blow of the whistle—and all the predictions could go out the window.
“We would like our method to become less reliable,” said Gerhards, Mutz and Wagner, “because that would mean that the market values of the teams are converging, thus making the outcome more unpredictable and adding to the excitement.”
If it all goes according to strength of the teams, Spain will be the European champions in football once again. But since luck also plays a major role in football, the German national team cannot be ruled out. It seems rather unlikely that anyone else will win.

Indeed, while the England squad consists of very good individual players – and we would have to put England high on the list solely for this reason – but in major tournaments England almost always loses because of the inability of individual players to be outstanding team players. Gert Wagner notes that “this also applies to the current situation: England’s superstar Wayne Rooney is banned from playing in his country’s first two matches at Euro 2012. If he joins the team for the third match –even if they have been playing well – Rooney may prove to be disruptive, which would then, as usual, lead to England’s elimination, losing against Italy or Germany.”

Wagner has a very specific personal prognosis that is not grounded at all on scientific methods for the final: “An early opening goal by Lukas Podolski in the final match against Spain would mean a win for Germany. Despite the debacle in the test-match against Switzerland, the German team will have a very strong defense.”