Over the weekend, it has been reported that the 2019 Premier League Champions, Manchester City Football Club have been found guilty of breaching UEFA (the governing body for European Football) fair play regulations and have been fined a whopping €30M and expulsion from the lucrative European Champions League competition. Although an entertainment business, professional football has to be run on a sound financial footing like any other business venture.
This is not a parochial blog about a sport with limited appeal but an analytical view of football as a metaphor for business management. As a lad born and raised in Liverpool (before leaving aged 21 in 1988), a Liverpool FC fan and a corporate performance management (a cross disciplinary research and teaching area) specialist, I am fascinated that managing (appropriate) performance metrics can be essential enablers for success. I will use a series of blogs to apply strategic management, operations management and entrepreneurial management theory to try to unlock the formula that has transformed Liverpool Football Club from a fallen giant to the world’s number one soccer team.
It was 1990 when Liverpool FC, a team that dominated the 1970s and 1980s, last won the FA League Championship and there have been many “Anfield Nights to Remember” and false dawns over the years. “Thirty years of hurt has never stopped me dreaming” and Liverpool are likely to be crowned champions of the Premier League as early as March 2020, but what is their secret?
Is it our award winning attacking team including Sadio Mane and Mo Salah? Maybe? Is it our award winning defence led by Virgil Van Dijk? Maybe? Is it our award winning Goalkeeper, Alisson Becker? Maybe? Is it our charismatic FIFA 2019 Manager of the year, Jurgen Klopp? Maybe? Is it the roar of the Anfield Crowd, AKA the 12th man? Maybe? Those factors will be discussed in later NBS blogs but for the opening blog I will offer an alternative contributing factor to the conventional wisdom.
The Norwich Business School teaching method encourages our students to think differently and the UEA motto is to “Do Different”. The above are arguably key pieces in a complex jigsaw that has finally released the yoke of under achievement from Liverpool FC.
My line of enquiry lies in the title of the blog, the owner of Liverpool FC, Fenway Sports Group led by Billionaire John Henry. Henry’s company also owns the Boston Red Sox Baseball team who famously hired the talents of Bill James (the Economist who pioneered Sabermetrics, a form of big data analysis before the term “big data” was coined, to determine why baseball teams win or lose). It challenged and changed the conventional wisdom of the baseball game to enable the Boston Red Sox to win its first of four World Series championships since 1918.
Brad Pitt Starring in the 2011 Hollywood film Moneyball
The story was popularised in the Hollywood film, Moneyball starring 2020 Oscar winner Brad Pit. Two scenes are pivotal in the film. The first is Brad Pitt and Jonah Hill discussing the principle of Bill James’ sabermetrics. The final scene is where Brad Pitt’s character is offered the largest salary of a sporting General Manager by John Henry, the owner of the Boston Red Sox to lure him away from his club. This scene which captures the essence of what the metrics achieved (it still has its detractors) and the implications for other industry sectors.
In 2010 Fenway Sports Group acquired Liverpool Football Club and during the last ten years a quiet revolution has been taking place. Using the principles of Sabermetrics in Football, Henry has employed Sporting Director Michael Edwards and University of Cambridge PhD graduate Dr Ian Graham to employ sporting big data to bring marginal advantage to get the best out of existing players and spot value in purchases where other clubs don’t. One of the major challenges was Liverpool’s perennial problem of return on investment from its big money football star purchases that had failed to deliver title success. Since 2010 Liverpool have done great business with their transfer sales of high profile players: Fernando Torres (bought for £27M sold for £52M); Luis Suarez (bought for £24M sold for £53M); Philippe Coutinho (bought for £12M and sold for £130M). Add to that the ability to off load players that no longer fit the Liverpool pattern for a profit such as Benteke, Sakho and Solanke and Liverpool negate the advantage of bigger money clubs such as Manchester City, Chelsea and Manchester United.
Michael Edwards: Sporting Director for Liverpool FC.
Dr Ian Graham: Director of Research for Liverpool FC
In the season of 2018/19, Liverpool went within a point of winning the Premier League in 2018/19 but lost out to Manchester City. However, they secured their first silverware in 7 years by winning the 2019 European Champions League, Europe’s top title. Since then they have also won the UEFA Super Cup. In the 2019/20 season Liverpool have gone a step higher to win the 2019 FIFA Club World Cup and are currently run away leaders in the premier league with a 25 point lead and everyone except Liverpool FC are saying the title race is over. Will Liverpool’s success continue unabated or will other clubs follow the big data analytical approach? If you look at the current market transfer value of the first team squad members (especially added value since purchased) and you will appreciate that this squad will win more trophies.
In business it must be borne in mind that metrics can be gamed (manipulated) or that the wrong metrics are selected and measured. To paraphrase the quote by Einstein: “Not Everything that counts is counted and not everything that is counted counts.”
My next blog will suggest that it is not simply big data but other ingredients that provide the synergy of Liverpool FC’s recipe for success.
Dr Graham Manville is an Associate Professor and Director of Employability and Innovation at Norwich Business School.
He is a Certified Management Consultant, a multi-award winning practice based academic and the author of three books on Management Consultancy and Performance Management.
by Graham Manville