To those unfamiliar with English football, the name Nottingham Forest sounds more like a wooded area than a football club. Even today, new fans of football – especially in America – may be unfamiliar with the team who has won two European Titles and an English Title. Nottingham Forest is a club which has not played in the top flight since 1999 but within their history lies something truly remarkable. As a means of reference, what Nottingham Forest accomplished in the late 1970’s to the early 1980’s would be equivalent to Blackburn Rovers (currently 13th in the second division) getting promoted to the Premier League next May, then winning the league at its first attempt before winning the Champions League twice and a couple of cup competitions for good measure. The architect of this astronomical rise is a man by the name of Brian Clough.
What is the Transfer Market?
Teams acquire players in football differently than in American sports. In America, teams acquire players primarily through the draft, free agency, or through trades. Across the Atlantic there is still free agency (due to a mechanism called the Bosman Ruling which has its own complicated history) but players typically move through the transfer market. Basically, the transfer market involves moving a player’s registration from one team to another in exchange for a transfer fee. As in any market, there are inefficiencies within the transfer market, and Brian Clough was perhaps the first master at finding value in the system. Simon Kuper and Stefan Szymanski in their excellent book Soccernomics go to great lengths to show that despite popular opinion, it is spending on player wages that are most indicative of a team’s success but even they begrudgingly admit “If there was one club where almost every penny spent on transfers bought results, it would be Forest under Clough” (Kuper and Szymanski 44). Here are a few of Clough’s coups:
- Buying Garry Birtles from nonleague club Lon Eaton for $3,500 in 1976 before selling him to Manchester United four years later for $2.9 Million. Birtles costed United $175,000 per goal and was later sold back to Forest for a quarter of the fee after two years
- Buying future Republic of Ireland captain from a small club called Cobh Ramblers for $80,000 in 1990 and selling him to Manchester United (again) 3 years lager for $5.6 million which was at the time a british record fee
- Buying Kenny Burns from Birmingham City for $250,000 in 1977. At the time of his signing, he was regarded as a fighting, hard-drinking gambler… a stone [fourteen pounds] overweight
Although there is no reliable financial data on club wage bills from the late seventies and early eighties, Kuper and Szymanski posit that Clough was winning despite teams spending double Nottingham Forest’s wage bill. So why was Clough and Nottingham Forest so successful? He held steadfastly to three rules later publicized by his assistant Peter Taylor in the also fantastic With Clough by Taylor.
- Be as eager to sell good players as you are to buy them
- Clough knew that sentimentality was something that could not be tolerated in as competitive a business as football. Every time they signed a player, Clough and his team would tell them “Son, the first time we can replace you with a better player, we’ll do it without blinking an eyelid. In football, as in the stock market, it is important to buy and sell at the right time. Selling a player after a successful season means you can fetch a higher price
- Older players are overrated
- Clough knew that seniority was (and still is) a poor rationale for pay in football. Players are melting blocks of ice. It is the job of the club to get rid of them before they turn into expensive puddles of water. Many clubs insist on paying for past performance and while it is somewhat indicative of future performance, there are other less considered metrics that were apparent to Clough back then and moreso now with the advent of big data
- Buy players with personal problems at a discount
- As was the case with Kenny Burns, Clough knew that a player’s value decreased the more off field baggage they carried. Clough was a drinker himself so he knew how to get through to those who were fighting their own demons. Clough insisted on total knowledge of his players; if he knew the vice, he could stamp it out.
It is hard to state exactly how much of a feat what Clough accomplished at Nottingham Forest. From the second division to European glory in less than a decade. Even after Clough eventually lost his magic and Forest were relegated in 1993, what he accomplished is something that may arguably never be done again in the history of the sport. You couldn’t even write a script like that. Except for the time when they did…
Football Through Finances 