10 Things to Learn from Soccernomics (by Simon Kuper)

imageSoccernomics: Why England Loses, Why Spain, Germany, and Brazil Win, and Why the U.S., Japan, Australia, and Even Iraq Are Destined to Become the Kings of the World’s Most Popular Sport by Simon Kuper is basically the Freakonomics for Soccer. It looks at how the game is played but also the business of the sport and has many many many good things to note. Ideally, this article would be fifty things to learn, but here are ten things to learn from Soccernomics:

  1. the most dangerous corner was the inswinger to the near post. The beauty of the inswinger was that it sent the ball straight into the danger zone.
  2. In short, the more you pay your players in wages, the higher you will finish, but what you pay for them in transfer fees doesn’t seem to make much difference. While the market for players’ wages is pretty efficient—the better a player, the more he earns—the transfer market is inefficient. Much of the time, clubs buy the wrong players.
  3. A new manager wastes money on transfers; don’t let him.        Use the wisdom of crowds.        Stars of recent World Cups or European championships are overvalued; ignore them.        Certain nationalities are overvalued.
  4. Older players are overvalued.        Center forwards are overvalued; goalkeepers are undervalued.        Gentlemen prefer blonds: identify and abandon “sight-based prejudices.”        The best time to buy a player is when he is in his early twenties.        Sell any player when another club offers more than he is worth.        Replace your best players even before you sell them.        Buy players with personal problems, and then help them deal with their problems.        Help your players relocate.
  5. It was Rupert Murdoch who went to English clubs and suggested putting them on satellite TV; the clubs would never have thought of going to him. In fact, the clubs often fought against new moneymaking schemes. Until 1982 they refused to allow any league games to be shown live on TV, fearing that it might deter fans from coming to the stadium. They couldn’t grasp that games on television meant both free money and free advertising. There is now a good deal of research into the question of how many fans are lost when a game is shown on TV. Almost all the evidence shows that the number is tiny, and that the gate revenue that would be lost is usually well below the amount that would be made from selling extra matches for television coverage
  6. Let’s compare the breakeven rule to the salary cap, widely used in American major-league sports. A salary cap generally restricts teams’ spending on players to a fixed percentage of average club income (55 percent, say). UEFA’s breakeven rule restricts player spending to the level of club income defined as “relevant.” The key difference is that the US cap is the same for all clubs, whereas breakeven caps each club at the level of its own resources—a lot for the larger clubs, not so much for the smaller clubs. So while the American salary cap encourages competitive balance between clubs (it stops the Dallas Cowboys from spending infinitely more than the Jacksonville Jaguars), UEFA’s breakeven rule cements inequality by making it harder for smaller clubs to compete with the aristocrats. This hardly seems fair, unless by “fair” you mean the idea that big clubs should be protected from competition from upstarts.
  7. “Two thirds of goals come from possessions won in the final third of the field,” he lectured. The great sin, to him, was losing the ball near your own goal.
  8. “Soccer” was the most common name for the game in Britain from the 1890s until the 1970s. … Soccer conquered the world so fast largely because the British gentleman was such an attractive ideal.
  9. Daniele Tognaccini, longtime chief athletics coach at AC Milan’s “Milan Lab,” probably the most sophisticated medical outfit in soccer, explains what happens when a player has to play sixty tough games a year: “The performance is not optimal. The risk of injury is very high. We can say the risk of injury during one game, after one week’s training, is 10 percent. If you play after two days, the risk rises by 30 or 40 percent. If you are playing four or five games consecutively without the right recovery, the risk of injury is incredible.
  10. Kevin Alavy, the managing director of the Futures Sport + Entertainment consultancy whom we met earlier in the book, says that often the Premier League enters a new territory by offering itself on free-to-air TV. That’s what it did in eastern Europe, across the former Soviet Union, and more recently in Indonesia. Until a few years ago, hardly any of the 247 million Indonesians knew soccer. But given the chance to watch top-class English games on TV for free, many began watching. In recent years, says Alavy, “typically Indonesia has been the number one market by TV audiences for the Premier League.” Once Indonesians were hooked, the Premier League gave them a new TV rights deal that offered them far less free soccer.

10 Things to Learn from Game Changer: How the English Premier League Came to Dominate the World (Mihir Bose) [Soccer, Sports Business]

imageContinuing my research into soccer-business (see my previous post, 10 Things to Learn from Sounders FC), I recently finished Mihir Bose’s Game Changer: How the English Premier League Came to Dominate the World. Although the book may discuss the TV contract negotiations / creation of the Premier League in the early 90’s a bit too much, there is a lot of great insight into the modern game (from a business perspective).

Here are 10 things that I would like to highlight from the book:

  1. All the major English clubs have targeted these fans and Chelsea have been particularly active trying to target disillusioned fans of other clubs who are not doing so well. These fans follow success and do switch loyalties.
  2. Indians probably watch more live Premier League matches, including the 3pm Saturday kick-offs, than most do in Britain.
  3. When the Premier League was founded in 1992, La Liga in Spain and Serie A in Italy were the dominant European leagues, secure in their own homelands and in the wider world. Italian football had even invaded England’s football scene, being broadcast every Sunday afternoon on Channel 4. But in the last 20 years all that has changed.
  4. In another curious reversal of the American experience, football embraced segregation in order to cope with fan violence. The Americans spent much of the 1950s and 1960s trying to eliminate segregation based on colour from their society. English football in the 1970s decreed that fans could only watch if there was strict segregation between fans of rival teams. For all the changes that have since occurred in football, this separation of home and away fans still exists, with grounds having large signs directing them away from each other. And even in new stadiums such as the Emirates, Arsenal’s ground, it is made clear even in the executive box areas that fans should not be wearing the colours of the visiting teams.
  5. Against this background, it is hardly surprising that English football failed to attract non-white fans. This failure persisted even throughout the 1990s when English football made strenuous efforts to oppose racism. The most prominent initiative, Let’s Kick Racism Out of Football, was launched jointly by the PFA, the Commission for Racial Equality and the Football Trust, and within a year all but one of the professional league clubs in England and Wales had signed up to its 10-point plan. This effort was supplemented by multiple individual initiatives from clubs, fanzines and community groups. However, in 2001 the FA Premier League’s national fan survey found that only 0.8 per cent of “active top-level fans” were Black British or British Asian. This represented a rise of only 0.1 per cent since the previous survey in 1997, and compared to a total minority ethnic representation of 13 per cent in the UK population. The same survey found that 7 per cent of all Premier League fans had reported witnessing racism against other fans and no fewer than 27 per cent had reported racism displayed against players at matches.
  6. Hilly’s great idea was to take the score and the time and put it on the screen. I remember thinking, “Oh fuck — why have we not thought of that before?” It had never been done. Anywhere in the world. Can you believe it, only 20 years ago when you were watching football, you’d switch on and you didn’t know who was playing, you didn’t know the time, and you didn’t know the score.
  7. The Champions League was born! The new marketing concept was both innovative and commercially adapted to the changing market conditions. Each sponsor would receive exclusivity in its product area, not only in the stadium as was previously done, but also on TV, with commercial airtime spots and programme sponsorship. By linking stadium advertising together with on-air sponsorship, it became almost impossible for non-sponsors to associate with the competition. The three pillars of stadium advertising, commercial airtime, and programme sponsorship generated a “multiplying media effect” that offered new levels of recognition to the sponsors. A “less is more” approach was taken and a maximum of eight international sponsors was decided upon. The sponsor package included four stadium advertising boards, ticket allocations, and identification on TV interview backdrops and in the VIP and press areas. Each of the sponsor ticket holders was also invited to specially arranged hospitality suites before and after the matches.
  8. In the years since 1995 the Bosman ruling has led to other changes in the transfer regulations. It led to transfer windows allowing player transfers only twice in a season, once at the start and once in the middle. But most significantly, it greatly increased player power. The court ruling meant that footballers were now free to move when their contracts expired. And this in turn paved the way for footballers to earn multi-million-pound salaries. Sport could no longer be exempt from EU competition rules and had to be treated like any other business. The net effect was that unless a club arranged a transfer before the player entered the last year of his contract he was free to move at the end of it. This tilted power decisively in favour of players and away from clubs. Now players, particularly high-profile stars, were masters of their own destinies. And as free-agent players they could suddenly demand huge signing-on fees and salaries on the basis that the club they were joining did not have to pay anything in transfer fees. Football clubs were powerless to prevent their best players from leaving at the end of their current deals. Conversely, players under contract could demand bigger, better and longer deals — because the threat of being able to leave for free, especially if they would otherwise command high transfer fees, was something clubs could not ignore.
  9. In his very first season Abramovich spent £111.3 million on transfers. Not only was this more than anyone had ever spent before in English football, but the Russian dramatically changed the terms of trade. He paid the full transfer fee at the timing of signing the player. This broke with the usual convention of fees being spread over a period of time. Cash on the nail proved a lifeline for clubs facing cash-flow problems. Indeed, it was immensely beneficial to clubs such as West Ham who were then under financial strain, as the then club chairman, Terry Brown, acknowledged. Since 2008 and the purchase of Manchester City by Abu Dhabi United Group, Chelsea have been challenged and even overtaken in transfer spending. In 2010–11 the club spent £141 million on players, the third successive season they had spent more than £100 million, double that of Manchester United and comfortably ahead of Chelsea at £91 million.
  10. While the 20 Premier League clubs had an income of £2.3 billion, the remaining 72 clubs in professional football in England between them had an income of under £700 million. Two of them, Port Vale and Portsmouth, are in administration and 13 of the clubs in these three divisions are classified by financial experts as in distress, meaning that they have serious court actions against them, including winding-up petitions and high court writs, or have been issued with striking off notices for late filing of accounts or have county court judgments against them.

10 Things to Learn from Sounders FC: Authentic Masterpiece: The Inside Story Of The Best Franchise Launch In American Sports History (Mike Gastineau)

imageI have been reading catching on the business of soccer lately, reading about Major League Soccer (MLS), the English Premiere League, and other aspects including David Beckham’s time in the United States with the Los Angeles Galaxy. Included in this research has has been Mike Gastineau’s introduction to the Seattle Sounders and its franchise launch. It’s absolutely a good read.

Below are 10 Things to Learn from the book:

1) Fifty-one percent of those eligible voted in the election and the decision to build the stadium passed by less than two percentage points. Mendoza’s response when asked if the vote would have been yes without adding soccer to the mix is doubtless and declarative. “Oh, God no. No way. It doesn’t even come close. If it had not been for the soccer moms and dads this thing would have died.” “It was a squeaker,” Kolde agrees. “We needed soccer. It powered this thing through. We wouldn’t have won it without that. Not at all.”

2) In a thoughtful nod to Seattle’s sports history it was the Sounders who opened the new stadium just as they had opened Seattle’s new Kingdome in 1976 in a legendary match against Pele and the New York Cosmos. On July 28, 2002 the USL A-League Sounders played their rivals the Vancouver Whitecaps. The home team won 4-1 in front of a league-record crowd of 25,515 people. Standing there that night it was easy to envision Seattle quickly making the leap to the big league of American soccer, Major League Soccer.

3) There are a myriad of reasons the NASL and the Sounders didn’t make it. The league was mismanaged and over expanded. Too many of the original owners were infatuated with soccer, but not dedicated to the long-term success of the league. In Seattle the Sounders of 1974 enjoyed little or no competition, but by 1980 the NFL and MLB had arrived, the Sonics had won an NBA championship, and the Washington Huskies had begun a long string of college football success. But Hanauer emphasizes that move from the cozy confines of Memorial Stadium to the Kingdome. Attending a game where empty seats outnumbered tickets sold couldn’t help but undermine the fan experience.

4) Leiweke proposed that Allen would own 25 percent of the team, but instead of putting up money he would provide business infrastructure in the form of the Seahawks marketing, sales, promotion, and media staff, as well as use of the team’s stadium rent-free for home games. Leiweke had convincing to do on both sides. On the one hand he had to convince Allen that his staff and management could handle the extra responsibility of a new soccer team. Allen’s only concern was whether or not his top executives would get distracted from their duties with the Seahawks, but Leiweke assured him that wouldn’t happen. Meanwhile, Leiweke convinced Roth and Hanauer that what they really needed from Allen was the Seahawks organization’s expertise. Roth and Hanauer wouldn’t get any capital in the deal, but they instantly had an office staff trained in how to run a professional sports team.

5) “One of the things I felt all along about MLS and soccer in America was they accepted their role as a secondary sport. So the first thing I felt was that we have to come out like we are a first-tier sport, like we are baseball, basketball, or football. I kept saying that everything we do we’ve got to do first tier. Our enemy was the 50-year-old white male sportswriters who thought of soccer as something their daughters played.”

6) for the primary marketing effort, the entire group felt the “market to the youth soccer organizations” model favored by many MLS teams was simply the incorrect way to go. “I never want to do something because it’s the way it’s always been done,” Hanauer says. “I can’t stand that kind of thinking.” He had studied and liked the way the MLS expansion team in Toronto had integrated into the community by marketing to soccer fans. “Toronto illustrated to us that this business didn’t need to be and shouldn’t be built on the backs of the youth soccer market,” Hanauer says. “In the history of MLS prior to that it had always been built on youth soccer, but trying to get people to come to a game after they spent eight hours at tournaments on a Saturday was a difficult sell.” So while soccer moms, dads, and kids would be enthusiastically welcomed, they would not be the focus of the new team’s marketing effort.

7) the final piece to connect the new soccer team to the Seahawks culture. Phones would now be answered “thank you for calling the Seattle Seahawks AND Sounders FC.” Business cards were updated to include the Sounders logo. Email addresses were changed to @seahawkssoundersfc.com. A small detail at first glance, that decision went a long way towards establishing the Sounders credibility. They would not be an afterthought. They would be a part of an already established and successful organization. The regular meetings on the team began expanding to include more than just executives, which allowed workers to begin to feel ownership of the new team. “What they (Leiweke and Wright) did from day one,” Hanauer says, “was position this thing within the Seahawks business offices as something new and exciting. Something you not only could be proud of, but that was also was good for your career. They treated it like a top-level professional team.”

8) Along the way to their leap from the USL into MLS the Sounders were smart enough to recognize a huge community of people who didn’t just play soccer on weekends or watch their kids play. The team embraced people who lived the sport, built their days around it, and made plans to be at their favorite pub to watch their favorite team, no matter the time. Leiweke felt too many MLS teams in the past had discounted the existence of such a market in their communities, but he knew it existed in Seattle from first-hand experience, and it was those fans who become primary targets of the Sounders’ original marketing efforts. “Those trips to The George and Dragon served as the inspiration for the core fan base we were going to build around. It was the epicenter.”

9) The Sounders didn’t just hit on the idea of selling the team to the pub crowd; they’ve cultivated the relationship over the years. Their website has a list of MLS Pubs in Seattle and players, coaches, and management make regular appearances to visit with fans. Bayliss says his customers are always pleasantly surprised at how accessible the Sounders are at these appearances: “They are happy to sit down and chat with anybody.”

10) It would be a fun twist if the narrative at this point became Keller teaming up with the USL Sounders to make the jump into MLS and challenge for a championship. It would also be unrealistic. To be sure, there would be some USL guys who made the jump, but to be as good as they wanted to be — immediately — Schmid knew the Sounders would have to succeed in four areas of player acquisition. “You’ve got to find someone in the draft,” he says. “You’ve got to make sure you find someone in the expansion draft. You’ve got to do well with your foreign signings, and you’ve got to discover some guys. If you hit it in three of those areas you’ll be pretty good. Hit in two and you’re 50-50. Hit all four and you’ve got a chance for the playoffs right away. I think we hit all four.”

10a) Swedish native and long time Arsenal star Freddie Ljungberg had been signed in October as the Sounders’ designated player. It was a move that made soccer fans in Seattle (and at least one guy still coaching in Columbus) sit up and take notice. “He was huge for the franchise from name recognition,” Schmid says. “He brought more credibility to the Sounders right away. His signing and Kasey’s signing made people think ‘these guys are serious with what they’re trying to do.’ It was a statement signing.”

10b) Maybe they should. Carey’s passion for the fan vote on the status of the general manager is not just some gimmick to attract attention. By the time he met Roth, he had thought through the plan thoroughly and realized that by empowering the fans they would be building in uncommon loyalty. “It’s great because the fans are invested in the team no matter what happens good or bad. If we ever have a bad streak the fans aren’t going to turn their back. They’re going to rise up and do something about it. People are never going to go ‘Fuck this I’m not going to the games anymore.’ That’s what you don’t want. I think the vote thing will keep that from happening. Fans will say ‘We have to rally together and get rid of this GM and save the team.’ That’s what they’ll do.”

The Real Madrid Estadio Santiago Bernabéu (Stadium) Tour

Over the weekend, Ha and I took a trip to visit the home of Real Madrid and Cristiano Ronaldo, Santiago Bernabeu! (Book a tour online here, but you can also just buy tickets at the stadium)

It is mostly as a stadium tour should be, lots of great access to special areas around the stadium and football pitch (field), but Real Madrid also has a great museum with tons of old jerseys, trophies, and other relics from team history. There is a tremendous amount to see, such as old match billings, game shoes from legends such as David Beckham, jerseys, and even Cristiano Ronaldo’s Ballon D’or trophy from last year. You can sit in the VIP seats near the field, the seats the reserves and coaches sit in on the field, and take a photo in the post-match press room. As you might expect, there is also huge official team store in which you can likely get anything you want or imagine with a Real Madrid logo on it, including your own personalized jersey to take home.

There were a couple of negatives from our trip, however. The first is that the tour costs 19 Euros ($27), and it’s not really a tour. It’s self-guided, so it’s more of an “open house”. For reference, the San Francisco Giants and Seattle Mariners tours that I have been to cost $22 and $10 respectively, and are actual guided tours. Then again, the Real Madrid tour is packed! I am guessing at least a couple of thousand people go through each day, an amazing number. The stadium itself is not ugly by any means, but it doesn’t look like a super new modern stadium either, which it isn’t.

The other negative is that we were not allowed to view the locker rooms and entrance tunnel. I think this may have been because we went on a game day, but this wasn’t mentioned clearly on the website. We were at the stadium 12 hours before game time, and the website mentions things may be closed 5 hours before game time. If we had known this, we definitely would have gone on another day.

More photos below, and all photos can be seen here: http://ispithotfire.smugmug.com/2014/Estadio-Santiago-Bernab%C3%A9u/i-MTWZ8NM