Sunk costs and Andy Carroll

A ponytail like Andy Carroll’s.

Sunk costs:

People often have an irrational desire to use products for which they have paid a lot of money, or to continue following a plan that has required a great investment. They think that if they abandon the product or change their approach, they will be throwing money or time away. That’s not true – the money and time have already been thrown away. Continuing to use a bad product or to follow a bad plan is only increasing the amount being thrown away.

People started talking about sunk costs in baseball about 15 years ago, as best I can remember. The point was that if you’ve offered a player a guaranteed contract of, say, 5 years and $50million and the player has turned awful by the middle of year three, there’s no point playing the player just because you’ve spent so much.  Indeed, by then, if you can get rid of the player you do, whether it’s just giving him away or even paying another club to take on the salary; the money has already been committed, there’s nothing you can do, so the best you can hope for is to minimise future impact of the previous bad decision.

The point here is that Liverpool’s owners will be very familiar with taking a hit on a bad sporting decision and if the decision is made that Carroll is not *the answer* then he’ll be gone. The transfer fee is at this point irrelevant in so far as nothing they can do will bring that back. Presently Andy Carroll is either a reserve centre-forward making star player money or he’s someone to get rid of sharpish.

If you think about it, it’s the exact opposite problem Fulham have with Clint Dempsey, which ought to bring their respective values much closer together than would usually seem likely. Carroll is an asset Liverpool want to get rid of; Dempsey is one Fulham want to keep. Both assets are complicated by the fact that the players probably want the opposite thing to what their clubs want, but player power can work in funny ways: Dempsey’s likely to get his way because if he doesn’t the club get nothing for him; Carroll may not get his way because ultimately he’ll want to play football, and Liverpool can deny him this. As Dempsey so neatly put it when speaking to our friend Adam Spangler in 2008, “the game don’t care”.

I very much doubt that Carroll will become a Fulham player. He’s on big wages, has uprooted from a preferred environment once already, and probably wouldn’t want to come to London. He’s not obviously the kind of player Martin Jol would want, either (contrast with Sam Allardyce at West Ham…).  And his former club, Newcastle, are interested in bringing him back (Mike Ashley would feel like king of the world if he pulled that one off). So chances must be low for this…. just not as low as it might seem.


Richard Allen founded CCN in 2006.

3 thoughts on “Sunk costs and Andy Carroll

  1. If Jol is really playing moneyball, then he’d sell Dempsey. As a fan, I’d rather they sold him than traded him for Carroll or anybody else for that matter. But no one can guarantee that his stock will ever be this high again, so selling him now is the most sensible thing to do.

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