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Are contract years in soccer a boost like in MLB and NBA?

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Nicol: Liverpool fans shouldn't be angry if Alexander-Arnold joins Real Madrid (2:11)

Steve Nicol and Craig Burley discuss Trent Alexander-Arnold's potential move to Real Madrid. (2:11)

When news broke last week that Trent Alexander-Arnold was in advanced discussions with Real Madrid to join the club for what we can safely assume will be one of the biggest contracts ever paid to a right back, Liverpool fans played all of the hits.

They photoshopped a picture of Wataru Endo onto the brick-wall mural of Alexander-Arnold in the city. They joked about how the corner against Barcelona wasn't even taken that quickly. They convinced themselves that, actually, yeah, he really can't defend. They consoled themselves by saying that there will never be another Steven Gerrard.

Those were the tame responses. Others criticized Alexander-Arnold for negotiating with another team while he was still playing for Liverpool -- even though the practice is totally legal. Some suggested it was a disgrace that Alexander-Arnold would leave the team without letting Liverpool get a transfer fee in return, and there was plenty of the typical "greedy athlete chases the money instead of the love of the game," too. As only sports fans -- and especially European soccer fans -- can, supporters sided with the employer, rather than the employee.

And well, the employers, Liverpool Football Club, are the ones who created this situation. After a couple of years with no one person in a position to consistently think about the long-term health of the squad, the club's three best players, TAA, Mohamed Salah and Virgil van Dijk, entered this season with just a year left on their contracts. This was the situation when the current front office took over.

But what if there was actually a hidden positive to all of this?

Sure, it seems likely that Alexander-Arnold will leave his boyhood club at the beginning of his prime, and there's a very real chance that both VVD and Salah will leave the club this summer, too. At the same time, there's an established phenomenon in a handful of American sports: players play better when they have only a year left on their contracts.

Liverpool have a 99% chance of winning the Premier League -- even though they entered this season as clear third favorites after Manchester City and Arsenal. While surely none of this was done on purpose, could Liverpool have accidentally coaxed 99th percentile seasons out of their three best players by letting them run down their deals?

Should more teams be looking to "the contract year" to get more out of their players?

The history of the contract-year phenomenon

The beauty of contract-year research is that it blends hackneyed truisms with objective data. The jocks and the nerds can both rejoice.

An old colleague of mine, a former NFL executive, once crudely suggested that "a hungry soldier is a good soldier." Or, something like that. What he meant was that players whose financial futures were dependent on their current performance tended to play well. Baseball manager Sparky Anderson once said: "Just give me 25 guys on the last year of their contract; I'll win a pennant every year."

The easiest sport on which to study this idea is the same sport where almost every analytical idea first emerged: baseball.

There has always been a massive amount of publicly available data for MLB games, and player performance is much easier to isolate in baseball compared to other sports. Outside of the pitching talent a batter faced in a given season and the stadiums a player played in, the offensive performance of each hitter in the league is easily comparable. There are no real team or tactical effects like there are in other sports.

The seminal paper about contract-year performance was published in 2014 by Heather M. O'Neill in the Baseball Research Journal. Some previous research into the idea that players performed better in contract years found what a lot of other early analytical research found: performance did improve in contract years, but not by the margins the coaches and sporting execs had claimed.

O'Neill realized that some of the research wasn't accounting for players who retired. And players who retired tended to do so after disappointing seasons. So, when controlling for retirement, O'Neill found that "the adjusted OPS [a catch-all metric for batting performance] of a free agent hitter in his contract year is expected to be 6.7 percent greater than in non-contract year periods -- higher than previously noted studies."

So, a 7% boost to your three best players would be enough to win the Premier League -- wouldn't it?

Can you have a contract-year phenomenon without contract years?

Similar findings have been confirmed in the NBA. At least, players do tend to perform better on the offensive end when they have only a year left on their contracts.

The theory behind the effect seems pretty straightforward: there is a clear incentive for players to perform at a higher level with new contract negotiations upcoming, so they try harder during games or they take their offseason preparations more seriously, or both. It also makes sense that this effect would show up for offensive performance -- the part of the game where improvement and production are the most visible.

Similar effects, however, haven't been replicated in either the NHL or NFL. In the NFL, the best players almost never hit free agency, and contracts are not guaranteed like they are in most other sports. A recent paper that looked into contract-year effects in the NHL found none. The authors suggested that the league's hard salary cap, which puts a ceiling on how much any player might earn, decreases the incentives that encourage contact-year performance bounces in other sports.

In soccer, the research has been mixed. One study found that player performance declines after a long-term contract is signed. (Uh-oh, Chelsea.) Another study found no relationship between long-term contracts and performance decline. (Phew, Chelsea.)

A study published in the International Journal of Sport Finance in 2011 found that players in the last year of their contracts received higher player ratings from the magazine Kicker! Then, another study published in PLOS One in 2019 claimed to negate those results. The authors of this more recent study divvied their analysis up by player type and position and looked at much more granular statistics than their predecessor.

In trying to measure all of this, there are two confounding factors.

The first is that it's really hard to measure individual player performance in soccer. Even if a player remains on the same team, the coach can change, the teammates can change, the tactics can change -- from season to season, or sometimes even within the same season. Then there's the question of: what do you measure? Even when simply looking at strikers and goals, that's largely affected by teammate performance and the randomness of shot conversion.

More important, though, are the contractual norms of European soccer. Despite all the hand-wringing after the Bosman ruling allowed players to run down their contacts, very few players did and do run down their contracts. It's starting to happen more often: Kylian Mbappé did it multiple times before joining Real Madrid, and now you've got TAA potentially doing the same. Madrid also added the likes of David Alaba and Antonio Rüdiger without transfer fees. But the sample size is way too small to draw any meaningful conclusions.

In general, soccer teams are incentivized to not let any key players enter the final years of their deals because it decreases the player's transfer value. With multiple years left on a deal, you can get another club to pay millions of dollars to you in order to terminate that player's contract. When there's just a year remaining, these clubs know they can just wait until the summer to acquire the player without paying a transfer fee.

Historically, players had signed these transfer-fee-retaining type deals even when they ultimately wanted to leave their clubs because they typically provided an immediate raise and they did provide some slightly longer-term security in case of injury. However, there has also been a stigma against running down your contract. Players were seen as "not committed to the project" if they reached their contract year.

This still happens. "In football standards, you never see your best player leave the club for free," said PSG chairman Nasser Al-Khelaifi in the summer of 2023. "It never happens." PSG then benched Mbappé for a stretch last season because he still hadn't signed a long-term deal.

This was perhaps the most famous player in the world -- imagine how other clubs might treat lesser-known, not-as-visible players in the last year of their contracts.

So, is there a contract-year effect in European soccer?

If we take the Liverpool players, Salah has undoubtedly seen a rise in performance in the last year of his deal. He's having one of the best individual seasons of the past 15 years at age 32. Given that Van Dijk is playing at elite level at the even more advanced age of 33, you could say he's experiencing a contract-year boost as well.

With Alexander-Arnold, it's less clear. He's in his prime, and it's hard to argue that he has been better this season than in previous seasons. Rather, it seems he has been about as good as he always has been. Perhaps that's actually an improvement, given that he's doing it for a new manager in a new tactical system, but that's a just-so theory that fits this narrative a little too nicely.

More broadly, the evidence for the contract-year effect is still limited -- at best.

I asked Aurel Nazmiu, senior data scientist at the consultancy Twenty First Group, if they'd done any research into the phenomenon. I mentioned the inconclusive results of previous studies and wondered if a more robust, modern dataset might find something new.

Nazmiu went all the way back to the 2013-14 season and looked at scoring rates among attackers in Europe's "Big Five" top leagues and their contract lengths. While it's not a perfect methodology, you would broadly still expect attackers to score more goals in the last year of their contracts if the contract-year effect did exist.

"The numbers align with the studies you mentioned, with little to no evidence suggesting attackers perform better in their final contract year," Nazmiu said.

Now, he did point out that two of the most recent outlier seasons occurred when players had two years remaining on their deals. During his age-33 season in 2021-22, Karim Benzema scored or assisted a career-high 39 goals in LaLiga. He also scored 15 goals in the Champions League -- the second-most goals ever -- en route to another European Cup for his club and a Ballon d'Or for himself.

A year after that, Marcus Rashford scored a career-high 17 non-penalty goals in the Premier League for Manchester United and added five more assists to lead the club all the way back up to a third-place finish. After the season, he signed a five-year contract extension and since then proceeded to score nine non-penalty goals over the following almost-two seasons.

Maybe, given all of the baggage still associated with playing out your contract, Benzema and Rashford experienced contract-year boosts a year early. Since most teams don't want to let their players reach the final years of their deals, the second-to-last year is usually the season before they receive another contract offer.

Or, more likely, these are just two high-profile examples -- like the three Liverpool players -- so they stand out. No one is writing columns about the players in these same situations who don't play well. Even Mbappé, last season, produced goals and assists at the same rate as his career average at PSG.

So, maybe Liverpool have benefited from Salah, Van Dijk and Alexander-Arnold ratcheting their performance up a notch with another big potential payday staring them all down at the end of the season. And there really is no reason to think that soccer players are immune to the same kind of financial incentives that athletes in other sports -- and frankly, employees across all fields -- are affected by.

But the strange way the market for players works, both in theory and in practice, prevents these incentives from actually exerting pressure in any kind of consistent way.

The corner would've been taken quickly, no matter how many years TAA had left on his contract.