I recently finished the excellent Soccernomics written by Simon Kuper and Stefan Szymanski.  It uses statistics and economic principles to test commonly held notions about football, some of the more serious ones  include “Does English Football Discriminate Against Black People?”, “Why England Loses and Others Win”, “Why poor countries are poor at sports”, and the extremely entertaining “The Economists Fear of the Penalty Kick” in which the power of statistics proves to be a deciding factor in a certain Champions League final.  I won’t spoil the book by revealing conclusions here.  If you find this blog interesting then you will definitely find the book a great read.

The chapter I was most interested in was provokingly titled, “The Worst Business in the World: Why Soccer Clubs Don’t and Shouldn’t Make Money”.  In it Kuper and Szymanski highlight several factors which they feel explain the current state of mismanagement in football:

1.  Financial Irrationality – Multimillion pound transfers on players (assets) which completely wreck financial plans in the hope of winning a trophy.

2.  Club Invincibility – There are always seemingly owners willing to step up and bail out clubs (and previous owners) in distress or pay outsize sums for over-performing teams.  As the penalty for mismanaging a club is so small there seems little incentive to run one properly.

3. Insular Culture – The authors offer many examples of poor management decisions and a lack of business acumen, but emphasize the point that it is not a simple lack of knowledge but also the unwillingness of the ‘Old Boys Club’ to bring new ideas and people into the footballing culture.  This manifests itself in varied forms  from archaic financial planning to distrust of foreign or educated managerial talent.

All in all a list that is easy to agree with.  The closed culture of football is the hardest to see, but perhaps the most important as it rules the behavior of the English football industry.  Examples abound,  from the £80m debt accrued at administration stricken Porstmouth, the £700m at Manchester United, or Michael Owen’s reported £110,000 a week wages at Newcastle.  The question which the authors (unfortunately) decline to answer is what can be done to change the status quo.  Perhaps sometime soon a management expert will be inspired by Soccernomics and write a book on that topic.