Introduction
The past six blog posts have all been about teams who have spent big to varying results. Historical examples show that large surges in spending make teams burn bright but fade fast. More modern cash injections such as Chelsea and Manchester City have reaped success on the field amidst a more heavily regulated financial environment. But do football clubs need to spend exorbitant amounts of money on player transfers and salaries in order to be successful? This blog post will focus on the French club, Olympique Lyon who dominated the French Ligue 1 during the early aughts, winning 7 league titles in a row between 2002 and 2008.
The above video showcases the net transfer spend by European clubs from the 1991/92 season to the current 2018/19 season. Olympique Lyon are notably absent from this list, surprising considering the team’s recent trophy cabinet. This post will not be so much a historical recap of what Lyon did but more of a how they did it. Once again I turn to Simon Kuper, and Stefan Szymanski’s Soccernomics which outlines the 4 rules by which Lyon came to dominate French football and defy conventional wisdom.
- Use the Wisdom of Crowds
Whenever Lyon wanted to sign a player, the decision was made by committee. There were of course key personnel present, including president Jean-Michel Aulas, sporting director Bernard Lacombe. Interestingly, whoever was manager at the time would sit in on the meetings but the final decision would not solely rely on the whims of one man. This is contrary to the way things are usually done; both in England where the manager wields a quasi-dictatorial level of control and America where head coaches are revered and enjoy celebrity status. The wisdom of crowds states that if one aggregates the average opinion of a diverse group, that opinion is far more likely to be accurate than if one expert is consulted. Using this method allowed Lyon to be successful no matter who was coaching the team. Its seven titles were won with 4 different coaches, none of whom enjoyed any significant successes after they left the club.
2. Buy Players in their Early Twenties
According to Aulas, Lyon aimed to buy young players “with potential who are considered the best in their country, between twenty and twenty-two years old”. This idea is so reminiscent of Moneyball it might as well have been said by Bill James himself. A team should avoid purchasing players too young because, as it turns out, how good a player is at 18 is a fairly poor indicator of how good they will be at 26. Billy Beane himself is a proper analogue for American soccer phenom Freddy Adu, both of whom peaked early in their careers but never came close to realizing their potential. Purchase a player too late and he either will not fulfill his potential or he is already an established name who will cost too much. Lyon was lucky in this regard because they come from a city with a relatively forgiving fan environment. Teams in Boston or New York demand stars; teams from the French countryside, not so much.
3. Help Foreign Players Relocate
Lyon made their name on the backs of players signed from outside France. Soccernomics delves into the difficulties relocation brings to both the player and club. Players are sometimes brought into a foreign country where they do not speak the language and have no idea of the culture. Without an arm around the shoulder, players miss their family and friends and become homesick. All of this means reduced performance on the field. Lyon not only helped players relocate (especially Brazilians who made a habit of coming to the club) but made a point of scouting players who were likely to be adaptable. Mercurial players prone to ill-discipline, such as the notorious Ronaldinho would not be signed no matter their ability. At Lyon, all players were equal; there were to be no superstars or massive egos.
4. Sell Any Player if Another Club Offers More than He is Worth
Aulas noted that buying and selling players is not an activity for improving soccer performance but rather a trading activity by which gross margin is produced. If another club offers more for a player than the club deems he is worth then it would be foolish to not accept the offer, no matter how important the player or how big the name. Lyon knew their best players would be bought so they had replacements in mind before their best players even left. Before star midfielder Michael Essien’s transfer to Chelsea in 2005, Aulas spent weeks saying the player was “untransferrable”. This was only to drive up the price. What Aulas really meant was that every player is untransferrable (until Lyon receives an offer they deem acceptable).
Conclusion
All of these insights are widely available to sports executives today. Soccernomics has been out since 2009 and Moneyball has been popular in the mainstream since before that. These are open secrets. Clubs would do well to follow them. Or, alternatively, clubs could stick to conventional wisdom and see where that gets them.
Football Through Finances 