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Bobby McMahon

Bobby McMahon

You can see me on Soccer Central most Mondays and Thursdays on Rogers Sportsnet in Canada. I write a regular column for Forbes.com and Soccerly.com and frequently guest on various podcasts and radio shows.


TANGENTS

Clubs Spending Big May Not Be The Story

Written by on February 2, 2011 | 21 Comments »
Posted in English Premier League

When 19th century economist and sociologist Vilfredo Pareto noted that 20% of the population owned 80% of the property, it is doubtful that he realized the impact of his statement.

Although it took until 1941 for management consultant Joseph M. Juran to bring attention to what he would name the Pareto Principle, it has become a widely known, used and discussed in the last 70 years.

However, you can be sure that neither Pareto nor Juran were ever thinking of the Premier League and the 2011 transfer window when it came to the 80/20 rule.

But if you are looking at a close to perfect application of the Principle look no further than the recently closed transfer window and the spending by top flight English clubs.

In total terms, spending in this winter window amounted to approximately $360M which outstripped the previous high water mark of $280M set three years ago.

But not every club came to the spendthrift party. January 2011 window expenditures were restricted to only a handful of clubs. When you add up the money spend by Aston Villa, Liverpool, Chelsea and Manchester City it comes to around $285M.

Taken as a percentage of the total it comes to 79% – remarkably close to matching one side of the Principle. And of course the four teams out of a total of 20 in the Premier League constitute 20%.

Interestingly the 80/20 rule also became known as “the vital few and the trivial many,” something that certainly rings true given the attention paid to the clubs who took out the cheque books in the last couple of weeks.

But apparently later in life Juran came to believe that the Principle was being misinterpreted and being used as a reason to ignore the other 80% of cases.

Rather like the last few days when the lack of, or certainly limited spending, by the other sixteen Premier League clubs has been almost totally ignored.

Although the UEFA Fair Play rules hover overhead (although not anywhere close to Stamford Bridge) they just are not a priority for the majority of clubs. For most Premier League clubs survival is the name of the game with qualification for European competition only possible in a parallel universe.

If any clubs had an incentive to spend on players in the transfer window you would have thought it would be teams in the bottom half of the table.  But that was definetly not the case.

Of the ten clubs only Aston Villa spend any significant money while the others pretty much stood pat or looked to loan signings.

The remaining nine clubs signed 25 players with around half on loan deals.  The remainder cost around $18M at an average cost of less than $1.5M each – an absolute pittance.

So while we have been expressing our amazement at how much money was spent by four clubs perhaps the more telling story is that the lack of money spent by clubs who have the most to lose.


21 responses to “Clubs Spending Big May Not Be The Story”

  1. Theo van Arshavregas says:

    It won’t really ‘sink in’ for clubs like Chelsea and Real Madrid until we see the very first team that qualifies for UCL but is not allowed to play in it because of their over spending ways. Maybe Roman doesn’t honestly believe the rule will ever be enforced? And these days, with creative accounting, he may be right. Much like the real world, laws which are not enforced will never be respected. Will the UEFA Financial Fair Play Rules be strictly enforced using fair, consistent, and transparent accounting rules or will it just be a toothless tiger?

  2. Creative accounting is very unlikely to get around the rules UEFA have come up with. Give this a read and let me know if you see anything they have not covered
    http://tiny.cc/ktu7s.

    Even the old “what’s stopping someone buying a season ticket for 10m” stunt is covered under fair market value criteria.

  3. Gus Keri says:

    Here what I think the owners with deep pockets are doing.

    They are going to spend as much as they need and as long as it’s allowed.

    When it’s time to apply the rules, they will ballance their club’s account by pouring their own money into it and remove all the debts.

    After that, they will go by the rules. But the damage has been already done and now they have a super rich clubs to compete with the other big ones.

  4. Theo van Arshavregas says:

    Bobby,

    Don’t have the time to read it now. I’ll try to do so later.

    As a qualified accountant, who is between jobs, I can tell you that we have many tricks up our sleeves. Even under GAAP accountants often have options and can make things look much more favourable or unfavourable depending on the organization’s wishes. There are also off balance sheet options as were done by Enron.

    Let’s just say that I’m an optimistic skeptic regarding Financial Fair Play. As both a Barça and Arsenal fan I’d like to see it and be on a level playing field financially with the likes of Real and Chelsea. But I won’t hold my breath and I’ll believe it when I see it. Remember, none of this means anything until behaviour is changed through real sanctions (such as disallowing participation in the UCL for offenders). Time will be the ultimate arbiter.

  5. Theo van Arshavregas says:

    As an aside, I had a ‘Bojan sighting’ today. Or at least I think I did. Much like people who claim to have ‘seen Bigfoot’, or the wee boy in the movies who ‘saw dead people’, I claim to have had a ‘Bojan sighting’. He started and played all 90′. It was the 2nd leg of the SF of the only domestic cup. The first leg ended 5-0 to the good for FCB, thereby making the normally improbable ‘Bojan sighting’ odds on for this fixture. He seemed to begin each half full of energy which dissipated over time. He seemed to be lacking a spark. He did have a nice ‘around the cow’ move, a lost dribble when approaching goal, and a squandered scoring chance which was nicely smothered by the goalie. Overall, his performance was disappointing and he was overshadowed by even younger prospects such as Nolito and Thiago. End of the aside and the off topic post but ‘Bojan sightings’ are very rare indeed.

  6. Ursusarctos says:

    I posted this on an older thread, but since it (more or less) directly relates to transfer spending, I’ll add it here as well:

    I’ve seen rumours that Torres’ medical at CFC was not exactly smooth sailing. Has anyone seen anything as well?

    Apparently (according to the rumours) there were issues with the knee he had surgery on last year that – in other circumstances, with another player – would likely have scuttled the transfer … as in, it’s fine now, but there exists a substantial chance of further problems down the line.

    I have absolutely no idea if this true or not … or, quite possibly, wishful thinking by an overly-imaginative LFC fan! In any case, I mention the rumour here in case something further comes out for or against it.

  7. Soccerlogical says:

    Sorry, are you wishing that one of your former players who provided so many wonderful memories and got LFC 50M (which brought 2 awesome strikers) and who may have even picked up the knee injury playing for your team while injured, will be confirmed of having a career ending injury or preventing him from demonstrating his amazing talent on the pitch for all football fans to admire?

    PURE CLASS, Liverpool fans are indeed “special”.

  8. rdm says:

    I don’t believe he did anything of the sort. He commented on a rumor and wanted it brought to light in an active thread. Hell I don’t even know why I’m saying anything, Urs can take care of himself far more eloquently on his own.

  9. Bryan says:

    In the end UEFA’s fair-play rules will turn out to be much ado about nothing.

    Overheard on another blog.
    “Harry Redknapp had to go to Madrid to get mugged.
    Kenny Dalglish just sat on his couch and phoned Mike Ashley.”

  10. Theo van Arshavregas says:

    RDM,

    SL may very well have something here. After all, Brown Bear did use “wishful thinking” in his post regarding the matter. I believe that speaks for itself and it conveys a devious undertone regarding the matter. Much like a lover scorned. Another story of unrequited love in a soap opera. The soap opera which is LFC and is never ending.

  11. Soccerlogical says:

    I apologize should I have misunderstood his post but THEO basically got the same sense I did from his “wishful thinking” which referred to a persistent or career threatening injury.

  12. rdm says:

    I’m not trying to put words into his mouth, but the way I’m reading it, is he was speculating about another person’s wishful thinking since he was addressing the previously mentioned rumors.

  13. Gus Keri says:

    SL:

    “PURE CLASS, Liverpool fans are indeed “special”.”

    I am starting to believe that you have some kind of a “complex” against Liverpool fans.

    How does one fan’s statement reflect on all the rest of them?

    Address your question to UA and save the rest of us your illogical comments.

  14. Soccerlogical says:

    I apologize Gusey, I was just addressing a percentage of the supporters’ having a certain “view” and not trying to generalize.

    You gotta admit though, any group of fans that constantly refers to themselves as “special” supporters is a bit deluded no? Talk about a grandiose self-image.

  15. Theo van Arshavregas says:

    Delusions of grandeur perhaps?

    RDM,

    There is no question Brown Bear was commenting on another LFC fan’s thinking. To include “wishful” insinuates that he shares such evil intent with this other fan and is certainly distasteful and uncalled for.

  16. Gus Keri says:

    SL”

    You are still generalizing.

    I, as a Liverpool fan, have never called myself as a “special” and before Bobby’s article, I have never come across such a claim, from the people around me or where I seek my information about the club.

    Of course, we are proud of the achievement of the club. And we bring it up when we face some people who tried to put us down.

    Any club’s fans would have done the same.

  17. Theo van Arshavregas says:

    Bobby,

    Here’s a quote I found regarding the subject, “When you scratch beneath the surface you find that around 80% of the total spending of £225M is concentrated across four clubs (Chelsea, ManC, LFC, and Villa) and spread across only six players (Torres, Carroll, Dzeko, Luiz, Suarez, and Bent),” a partner at Deloitte. “This was a particularly polarised window.”

    Remember when we were complaining that the cost of Bent was high? I still can’t believe that LFC spent £35m on Carroll while Barça spent £34m on Villa only 6 months ago. The January transfer window premium is one thing and six months’ of inflation cannot explain it. Nor can I. The world has gone mad.

  18. The point I was trying to make is that while the four clubs are getting all the attention we are ignoring that 16 clubs spent next to nothing.

  19. Theo van Arshavregas says:

    And doesn’t the quote reiterate the point you were making? I believe it hits at the heart of the matter rather succinctly … especially, “This was a particularly polarised window”.

    The second paragraph was just my added astonishment.

  20. Theo van Arshavregas says:

    Just reading up on the rap sheet on Carroll. Multiple assaults including beating up two different women and a teammate. Complete nutter and sheer class. And Liverfool ‘invested’ £35m on this guy? Shrewd. Very shrewd. I wonder what the over/under is with the English bookies on how long it will take for this ‘bit of business’ before it turns foul and heads south?

  21. Soccerlogical says:

    Stop digging yourself out of a hole and take a writing class to learn to express your thoughts more clearly and realize that human beings interpret language differently.

    PS Do bears not see the hypocrisy in constantly calling others trolls and trollin?

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