*All data collected is based on a 10 year period – 2003/04 to 2013/14 – unless specified otherwise*
‘Moneyball’ is a term which refers to the strategic, analytical approach of recruiting professional baseball players of a competitive standard, despite the recruiting team having poor financial resources: ‘it is a refusal to spend beyond ones means, whilst ensuring that a profit can be made.’ Pioneered by the Oakland Athletics general manager Billy Beane and scribed by Michael Lewis, Moneyball’s success gained fame. It has since been adopted by the majority of baseball teams.
The philosophy of Moneyball has been associated with football in an ambiguous manner. For example, a team who works on a tight budget yet manages to sign players and later make a profit on them may be been deemed as achieving ‘Moneyball’ success. It should be highlighted that the key difference between baseball and football is the absence of transfer fees in baseball. The Oakland Athletics did not sign players for around £1.5m and later sell them for around £10m, rather they drafted in players who were undervalued by others, yet matched key statistics that Beane and his staff found desirable. Beane, himself founded a link between the two sports: ‘Every business has metrics that correlate to success, it’s just finding them and which ones are the most valuable, and which ones do you invest in, and which ones you get a return on.‘ ‘Moneyball’ has since became an adjective for the philosophy. Nevertheless there can be no doubt that Beane’s words ring true. German clubs have achieved great success recently by investing in their structures, their fans and their academies. Other clubs across the continent have found success through alternative approaches. This article will dissect the key approaches which achieve clubs financial success, all of which are clouded under the blanket term of ‘Moneyball’. These approaches will involve the likewise use of performance software and computerised databases, similar to Beane’s approach. They will also ensure that the investing club achieve success, if not through trophies won, then by capital gained. However, these footballing approaches deserve to be differentiated from the ambiguity of ‘Moneyball’.
An accurate depiction of the umbrella term in regards to football was provided by Simon Kuper (2011) who recalls how Arsene Wenger discovered a replacement for Patrick Vieira by searching through databases’ for midfield destroyers who ‘covered the most ground per match.’ The search, as Kuper tells, produced a rookie name in Mathieu Flamini – obscure in the sense that Flamini was a fresh talent, not largely sought after on the continent. When Wenger discovered that Flamini could also play a little, he chose to sign him, and cashed in on Vieira’s statistical decline. Speaking about Wenger, Beane told Kuper: ‘If you have less money than your competitors then you can’t do things in the way they do, otherwise you are destined to fail – If Arsenal, Man Utd and Chelsea want a striker then Arsenal will get the third-best striker.‘ This explains why Wenger, the economics graduate from the University of Strasbourg, would rather shovel for gold and sign potential. More often than not it has worked (see below). Wenger has gained success with this approach throughout the course of his career. At Monaco he courted a young striker based in Liberia called Weah. Later his, and Arsenal’s, financial success has came from the ability to sell at the right time. Henry (29) left for £16m, Vieira (29) for £14m, Petit (29) for £7m and Marc Overmars (27) for £25m. As Kuper points out, none of these players did quite as well after he sold them. It is important to remember that none of this is moneyball. The Oakland A’s did not sell players. But for Wenger, the ability to sign young and sell at the right time has generated a lot of capital for his club. The chart below shows the obscurity of signings such as Kolo Toure and Gael Clichy who had the potential to be stars. It is called FIPG – financial investment into potential growth. This, is the first approach under the moneyball umbrella. All of the below signings had potential to develop into valuable assets, and they did so. Ponder what Arsenal would have achieved had Wenger persuaded a young Zlatan from Malmo, a boy called Cristiano from Sporting, a young Le Mans striker called Drogba, and Kolo’s brother Yaya, all to sign, too.
*van Persie’s initial fee varies according to source. Most fees taken from transfermarkt*
Billy Beane found a light in the unwanted. He understood that the financial demands of a castaway professional would be a lot less than that of a man whose star was at its highest. Not many teams in football can afford to sign a player who is at the pinnacle of his career (more on this later), yet if there is one manager in football who can relate to Beane and his approach, it is David Moyes. While as Everton manager, Moyes charged his staff with the task of analysing databases for players who were strong, resilient and cheap. It took real vision to see that Steven Pienaar was not as troublesome as other clubs believed. He was a talented footballer who was pivotal to Everton’s FA Cup run of 2009, he came with European and International experience, and best of all for Moyes cost only £2,000,000. That Everton team of 2009 was a beautiful concoction of the three financial approaches; FIPG (players on their way up, products of intensive scouting), unwanted talent (transfer listed pro’s who had a lot left to give; this article will avoid talking about such players for the most part) and academy graduates (who are often attractive for investors).
- Howard – unwanted
- Hibbert – academy
- Yobo – hard to categorise, had potential and was product of intensive scouting
- Lescott – FIPG
- Baines – FIPG
- Osman – academy
- Neville – unwanted
- Pienaar – unwanted
- Cahill – FIPG
- Fellaini – FIPG
- Saha - unwanted
Moyes worked on the old cliché of a shoe-strike budget. Regardless of this, he over performed through a meticulous analysis of potential signings. Consistently, Everton outshone ‘richer’ clubs in the transfer market. One of the fundamental aspects of Moyes tenure was the utilising of the academy at Everton. Merseyside, and indeed the North-West of England is a hotbed of talent. Hibbert and Osman found their level in the first team. Rooney strived, as did Rodwell, both of whom received massive transfers which benefited all parties. It seems likely that the latest graduate, Ross Barkley, will follow in their footsteps.
With this in mind it becomes noticeable that a football club can base its financial existence on the quality of its academy. Ajax of Amsterdam are a club with a blueprint based around the success of its graduate system. The manager, Frank de Boer, is appreciative of this and concedes that key players promoted from within are always likely to leave the club. With a combination of the Cruijffianen and Van Gaalisten schools of thought – individual and collectivism intertwined – De Boer has lain the foundations of a system whereby the whole is greater than its sums. He created roles for every position which are basic enough to constitute towards the team as a whole. Because of this, when an Eriksen leaves, a Klaassen can step up. Despite being a position of strength whereby Ajax can entice the ‘better’ teenage Dutch players to their academy, if you consider the club on a European scale they are magnificently self-sufficient. They are green-power; in fact, 30% of the Eredivisie came from Ajax’s academy. When they do sell a player, if they fail to promote a youth candidate in his place, they reinvest. Alongside the sales seen below, there have been FIPG signings who were on their way to more ‘affording’ clubs: Luis Suarez, Klaas-Jan Huntelaar, Zlaatan Ibrahimovic and Christian Chivu.
People will ponder whether a British club could implement a similar approach, but several variables must be considered; Ajax play at a lower standard which is less competitive and allows for greater development. For Premier League clubs it is too dangerous to gamble on youth. Think of other strong academies throughout the world and you will find that their youngsters are also nurtured in a less competitive environment; Sporting Lisbon play in a league weaker than the EPL, hence why Tiago Ilori was on the fringes of the first team for several years in Lisbon but is now in the U21′s for Liverpool. People may point towards Barcelona and Bayern Munich, the two best sides in the world who contain mostly academy graduates, yet both of these clubs have ‘B teams’ to harness growth until the required standard is reached. Ajax and Sporting, though, provide validity towards an academy based approach in the pursuit of capital.
*for effect, Sporting’s sales date slightly earlier than 03/04*
As mentioned earlier, FIPG is the financial investment into potential growth. Think of it as an ability to gain capital by purchasing players who are good enough for the short term, who will progress into assets in the medium term, who will be sold and reinvested in the long term. For this to fall under the category of a ‘Moneyball’ approach, the club must avoid spending beyond their means.
The competitiveness of the league has been mentioned as a key aspect when developing players (the league must be accommodating to development), however, and more importantly, the team who hold the asset should be involved in European competition to have enough financial clout to negotiate transfers. According to Deloitte, the English Premier League generates five times more for its clubs than the Eredivisie: 2,500,000,000 / 420,000,000, therefore it is not a case of whether a player will leave the Netherlands or not, more so it is a case of ‘how much?’
As shown above, when a player is sold to a club he may still be striving and be deemed too good for that club. Because of this, it would be viable for the player to transfer to a more competitive club. Observe the image above and note how the value of several players increases as they move up the league structures. For example, Arjen Robben was arguably worth more than the £15m that Chelsea paid. Another example, which is not seen above, is Nigel de Jong, who has since gone on to be more valuable than the £1m fee that Ajax received. To clarify what is mean by league structures, acknowledge the pyramids below. The above blue pyramid shows data from brandirectory.com regarding the top 20 brands in world football. As you can see, there aren’t any brands from Portugal, Scandinavia, the Balkans, South America or Asia. In our contemporary game this may offer an inclination as to why players sign for ‘bigger’ clubs, as these clubs have the necessary funds to entice such players. The red pyramid below it highlights the current UEFA Coefficient. The countries at the top of the pyramid are deemed to be elite in European competition. It can be theorised that the higher up the pyramid a teams league is, the more money they can negotiate for their players.
Proof that leagues higher up the red pyramid have a stronger footing in regards to negotiating fees for their potential players can be recognised by reviewing the three charts below. The first chart details the income of Porto in the last ten years (their windfall following successful Champions League campaigns has helped to determine their bargaining power) who have shown magnificent ‘FIPG’ vision under long term owner Jorge Nuno da Costa.
It could be argued that this approach is succinctly belonging to one club, a club who have performed admirably in European competition under the stewardship of Mourinho and Vilas Boas. However, Benfica (seen in the next chart) overcame financial uncertainty towards to end of the 1990′s to gain an enormous profit through investing in potential growth. Their profits can be seen below;
Benfica and Porto have made a combined profit of over £502m in the last decade. To understand that this is due to the strength of the Portuguese league in the coefficient ladder (amongst other factors) one must consider the third table seen below. Belgium is a hotbed of footballing talent, yet the combined income from key transfer sales departing the league in the last decade (forgive me if some players have been overlooked) is around £400m less than the intake of Porto and Benfica combined.
Belgian clubs could not demand a sufficient fee for their assets. When Witsel and Kompany left for foreign shores they were potentially worth a lot more than what Standard and Anderlect received. Readers may be naively labelling the mentioned clubs as ‘selling clubs’, a term used in Britain to malign the inability to hold on to key assets. Whilst several ‘selling clubs’ do exist in world football (without shame), FIPG is a separate systematic approach. As the reader is aware, football is a constant negotiation. Few players comfortably find their level and prolong their stay. When they do so it is a beautiful thing – Totti and Roma have constantly challenged each other. This is not always the case, for example: Fernando Torres was performing admirably at Liverpool for several years, yet when the club started to decline he became disgruntled as their relationship was not mutually beneficial. More commonly we see the player under-performing and therefore failing to benefit his club. In response, the player is sold.
Valencia can rightly be labelled as a selling club despite starring in one of the worlds ‘top’ leagues. Unfortunately they have amassed great debts in the previous decade, and have therefore been forced into selling their assets. This was not an FIPG approach. Valencia is an example of the variables that affect transfer fees, such as; debt, expiring contracts and the self negotiation of TV and sponsorship deals.
At present, it is vogue for a club to spend within its means. Germany’s Bundeliga has shown the benefit of investing in youth academies. The difference between Schalke, for example, and Ajax, is that Schalke can afford to retain their talented assets. For FIPG to work, it is necessary for clubs to recruit suitable players at their lowest possible cost. A fantastic network of scouts would is a prerequisite for this approach to work. Observe Italian football’s shining light, Udinese, and it’s recruitment of unknown young players from obscure teams throughout the world;
Returning to Billy Beane’s baseball statistical recruitment, his philosophy was made footballing flesh by Atletico Mineiro in their successful 2013 Copa Libertadores campaign. By recruiting unwanted ‘has-beens’ such as Diego Tardelli, Josue, Gilberto Silva, Jo and Ronaldinho, manager Alexi Stival over-performed on a small budget. This, was ‘Moneyball’ in the third ‘unwanted talent’ category. On the other hand, it could be argued that these veterans were on large contracts for a Brazilian club of Mineiro’s stature: a gamble which paid off for them. Hopefully this article has differentiated the financial approaches used by football clubs from the baseball approach of ‘Moneyball’. It is a common misconception to label a club achieving financial success beyond their means as doing so through a ‘Moneyball’ approach. Hopefully by reading this you can acknowledge the finer processes involved.