Linear Progression

 League and Financial position

To cap off a recent series of financial posts on this blog, I had a crack at learning to apply linear regression in R. I wanted to see the relationship between United's league position and overall revenues for the last few years. Let's dig into it further. 

Linear regression charts the relationship between two variables, in this case, League position and revenue. A straight line is then drawn through the data points to predict the value of the response variable (revenue) to the predictor variable (league position). 

Whilst the model would appear to suggest an association between the two variables, in fact, it fails to account for the fact that lower league positions are in fact not more valuable, despite the nominally higher value of the integer 6 itself over 2 or 3. In fact, when viewed correctly, there appears to be little to no relationship between league position and overall revenues. 

When the vicissitudes of football club finances in the past few years are considered, this is less surprising. Two of united's highest finishes in recent years, namely 2nd in 2020/21 and 3rd in 2019/20 came within the shadow of COVID-19 and its unparalleled impact on football finances. Both 2020 and 2021's revenue were severely depressed in comparison with other years on record and this massively warps the value of this analysis. Still, learning how to analyse this data with linear regression was a useful and interesting task.