Business Book of the Week: Tackling the business tactics behind the trophies
Winners and Losers: The Business Strategy of Football by Stefan Szymanski and Tim Kuypers (Viking, pounds 17.99)
Wednesday 26 May 1999
by Stefan Szymanski and Tim Kuypers
(Viking, pounds 17.99)
MANCHESTER UNITED and Arsenal at the top of their division; Sunderland and Fulham at the top theirs - no, not the league tables but the rankings of the richest clubs by division. Szymanski and Kuypers have a privilege seldom accorded to academic strategists: as the football season ends, the results bear out their predictions.
Only Brentford in the third division buck the central argument that "profits and playing success have grown together". The authors' analysis gives no comfort to those who believe football does not succumb to rigorous analysis, or hope for some magic solution to break the link between money and success. Winners and Losers accepts the game as it is; a business with costs, revenues and profits. Major debates within the game are tackled head on, but the book is based on hard evidence not soft opinions.
It is especially good at tackling the myths that abound about the game's problems. The authors dismiss complaints about player greed. The quality of players either as individuals or as a team decides which is "the most successful team". So clubs pay high wages to compete for the best, and the best play for the club that "offers them the opportunity to achieve more than they could elsewhere".
Until recently, the owners of clubs severely restricted players' earnings. Clubs exploited their control of regulations, used the courts and even acted as a cartel with "gentlemen's agreements" to keep wages down. Great players earned a pittance while revenues boomed. Each shift in the balance of power between players and owners came grudgingly. Despite the changes during the 1990s, football wages as a percentage of total revenues are lower than at any point since the 1960s. The best-paid soccer player cannot match the earnings of the basketball, baseball and American football stars. The biggest winners are the owners.
Winners and Losers spends more time investigating the biggest winner of recent times - Manchester United - than any of the losers. This study provides little comfort for those looking for a quick collapse in United's dominance. Despite the quality of analysis, however, the final conclusion that "United is well supported because it has always been well supported" is disappointing.
There is little about the reasons why United was able to turn its successes into sustained profits. Equally attractive teams like the Tottenham double- winners and more successful teams like Liverpool in the 1980s failed to convert trophies to profits. But the earnings gap between United and its main rivals started when United was relegated in the mid 1970s.
Despite dominating the championship for twenty years, Liverpool did not match United's earning power until the early 1990s. By then, the on-field success that drove this growth was ending. Between 1978 and 1997 United made more than pounds 66m in profits while Liverpool produced less than pounds 6m. The end of Shankly's strategies that produced Liverpool's success meant that United's financial muscle could pay off in trophies.
Despite the achievements of Shankly, Ferguson and Clough - the three managers studied in greatest depth - the authors do not find that managers have much effect on success. They test other beliefs about the ways to produce success, including transfer spending, squad size, and the number of black players. Only wages are "strongly significant", although the number of black players "tends to lead to better performance".
The only disappointing features of this outstanding book are; the failure to explore how clubs, other than Manchester United, can succeed, and the limited analysis of Arsenal, Tottenham and Chelsea. The first can be excused because Winners and Losers provides the tools for clubs to study and match their distinctive capabilities against the factors that determine success.
Arsenal and Chelsea seem to be taking this seriously. Their achievements are driven by people who get little attention by Szymanski and Kuypers - the business leaders. David Dein and Ken Bates understand the message of Winners and Losers and seem to be building an architecture for success.
Any supporter or analyst who wants to understand the modern game, and any club director who wants success should read this book. The authors emphasis the importance of strategy, but do not leave the obligatory blank page describing the average football club director's knowledge of the subject.
The authors play down outside interventions to take soccer back to a golden age when all teams were equal. There has always been an elite. Those worrying that only five teams have won the championship in the 1990s should remember that only five teams won the title in 1890s and the average winners per decade this century is less than six.
Professor Tom Cannon is chief executive of the Management and Enterprise National Training Organisation, and a keen follower of the football business
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