In the famous book Soccernomics, the second chapter is called “Why gentlemen prefer blonds: how to avoid silly mistakes in the transfer market”. The authors of the book, Simon Kuper and Stefan Szymanski, suggests that most of the money that is spent in the transfer market doesn’t contribute eventually to success on the pitch. It is the amount spent on wages that makes the difference in the long term.
In direct correlation, they have proven that spending more on player’s wages results in a higher league position finish. They do emphasise, that in general, spending more on your player’s wages will not lead to any success if you don’t have the required talent in the squad in the first place. However, they do believe that high pay attracts good performers.
The last sentence links me to the next field of study, the field of human capital management. Basically, human capital management is about understanding the value of workers within an organisation and how to evaluate them based on certain metrics to analyse their contributions.
Football clubs are organisations that their prime asset is their players. This is evident when looking at financial reports of football clubs where players are listed as intangible assets and valued by combining every player’s contract value.
The amount of money that was spent on transfers in the last transfer window was £2.8 billion(gross) across Europe’s top 5 leagues(BBC Sport). Usually, we will see clubs spend a lot on purchasing new players and paying them very well, but sometimes clubs miss out on the talent that is already in their squad and by maintaining a smaller wage bill strategy they lose out on those players. In contrast, on some occasions, the reason for high performing players to leave a club isn’t financial,but what worries me is the way football clubs often try to replace the lost players and their contribution to the team by spending heavy on transfers.
The human capital management institute in California came up with the top 5 metrics for workforce analytics. One of them is the high performer turnover rate. This metric looks at the relationship between the number of high performer termination to the average high performer headcount. But how do you define a high performer? First of all, it depends on the main activity of the business and then a business can look at certain KPI’s for each department of the business to determine and compare their employee’s outputs. The marketing department employees will be judged based on different metrics than the sales department for instance.
Now back to football. A football team is also divided into segments/departments. Goalkeeper, defence, midfield and attack. In each of these areas, there are different KPI’s to judge the player’s outputs and single out the high performers. Nowadays, where football statistics dominate the discussion around football it is easier for clubs to use data from companies such as Opta, Squawka and Prozone to have a better understanding of their player’s contributions.
A GK can be judged on clean sheets and saves per shots faced ratio, a defender can be judged based on tackles made, interceptions and clearances, a midfielder can be judged and pass accuracy and chances created and a striker on goals scored, shots on target, goals to minute ratios etc. these metrics eventually help football clubs understand the contribution of their players, compare them,value them, and realise they might be lacking.
All those metrics have a financial impact in the end. Players with higher outputs are valued higher than others, they will cost more to bring in and will be paid higher to attract and retain.
In the first Article of this series I’ll look at Atletico Madrid and how they replaced for several seasons their highest performing strikers and at what cost. Here’s a nice infographic to get you in the mood:
Method of analysis
To Determine which striker is a high performer I decided to focus and goals and assists for their previous club before joining Atletico and looking at their numbers when they left. I focused on the specific timeline because prior to that there were not many high performing strikers at Atletico. The same method was used for high performers leaving
As there was no information available to me about the wages expenditure besides a €66M (The Guardian) in 2014 and €105M in 2015(Talksport), I focused on transfer fees. This contradicts the concept from Soccernomics but still, supplies a good indication. As for the high performer turnover rate metric suggested by The Human Capital Management Institute, since I am focusing only on the strikers turnover, calculating this metric won’t be so useful therefore for I focused on the concept of a high-performing worker in a certain area of the business.(See comments for further explanation)
- In order to really determine the high performer turnover rate at Atletico Madrid in the years of analysis, a definition of who is to be considered a high performer across the other areas of the squad should be made.
- Stand out 1: Diego Costa, Joined from Braga in 2007-08 for £ 1.28 Million. Sold to Valladolid in 2009-10 unknown fee. Bought again from Valladolid for 850k.
- Stand out 2: Jackson Martinez, was expected to be a high performer but failed. He only played for the club until January.
- 2006-07: was only considered since Sergio Aguero joined that season for a high fee. Regarded as a high performer for Atletico from 2007/08.
- Future articles in the series will be more precise and will include football clubs who disclose wages via financial reports. This article was a work in progress.
- All of the goals, assists, matches and fees were taken from Transfermarkt.com