of your leading players than to risk losing a couple of them and have to go out and buy replacements. Benitez had a net transfer spend of minus £122 million in six years. If he had merely balanced his transfer budget in that period, let alone made a profit as Wenger did, he could have raised his team’s salaries by £20 million a year. In the 2008–2009 season, that boost would have given Liverpool a slightly larger wage bill than Manchester United. United won the title that year.
Clubs need to make fewer transfers. They buy too many Dioufs. But they will keep buying players, and the transfer market is probably the area in which clubs can most easily improve their performance. They need to learn from the few clubs and managers who have worked out some of the secrets of the transfer market.
Any inefficient market is an opportunity for somebody. If most clubs are wasting most of their transfer money, then a club that spends wisely is going to outperform. Indeed, a handful of wise buyers have consistently outperformed the transfer market: Brian Clough and his assistant-cum-soul mate Peter Taylor in their years at Nottingham Forest, Wenger during his first decade at Arsenal (though not since) and, most mysteriously of all, Olympique Lyon, who rose from obscure provincial club to a period of dictatorial rule over French football. From 2002 through 2008, Lyon won the French league seven times running. That era is now over, and the club subsequently made mistakes, as it tried and failed to compete with clubs with much higher revenues, such as Real Madrid or Manchester United. Lyon got tempted into paying big transfer fees for supposed ‘stars’ – for instance, gambling £18 million on the slow playmaker Yoann Gourcuff in 2010. It is now recovering through a new strategy focused on youth development. However, its seven-year reign remains an extraordinary feat. The usual way to win things in football is to pay high salaries. These clubs found a different route: they worked out the secrets of the transfer market.
There is a fourth master of the transfer market who is worth a look, even if he works mostly in a different sport across an ocean: Billy Beane, general manager of the Oakland A’s baseball team. In his book Moneyball, Michael Lewis explains how Beane turned one of the poorest teams in baseball into one of the best by the simple method of rejecting what everyone in the sport had always ‘known’ to be true about trading for players. Lewis writes, ‘Understanding that he would never have a Yankee-sized checkbook, Beane had set about looking for inefficiencies in the game.’ It’s odd how many of the same inefficiencies exist in football, too.
MARKET INCOMPETENCE
If we study these masters of transfers, it will help us uncover the secrets of the market that all the other clubs are missing. First of all, though, we present a few of the most obvious inefficiencies in the market. Although it doesn’t take a Clough or a Beane to identify these, they continue to exist.
Typically the new manager wants to put his mark on his new team. So he buys his own players. He then has to ‘clear out’ some of his predecessor’s purchases, usually at a discount.
Strangely, it’s Tottenham during its years under a famously tight-fisted chairman, Alan Sugar, that provides the worst example. In May 2000 the club’s manager, George Graham, paid Dynamo Kiev £11 million – nearly twice Spurs’s previous record fee – for the Ukrainian striker Sergei Rebrov. Clearly Rebrov was meant to be a long-term investment.
But nine months later, Sugar sold his stake in Tottenham, whereupon the new owners sacked Graham and replaced him with Glenn Hoddle. Hoddle didn’t appreciate Rebrov. The record signing ended up on the bench, was sent on loan to a Turkish team and in 2004 moved to West Ham on a free transfer.
This form of waste is common across football: a new manager is allowed to buy and sell on the pretence that he is reshaping the club for many years to come, even though in practice he almost always leaves pretty rapidly. A great example was Paolo Di Canio at Sunderland in 2013: in the six months and thirteen games that he managed the club, he spent £23.5 million on transfers, brought in fourteen players and let fifteen leave. When he was sacked, he left his successor, Gus Poyet, a team in last place in the Premier League. Tony Fernandes, the Queens Park Rangers chairman who spent a net £40 million on transfer fees while getting relegated from the Premier League in 2012/2013, told us mournfully: ‘Sunderland’s going through, in some ways, what we went through. The manager comes in, he changes everyone. If you change a manager, I don’t care who they are, they’re going to have a different opinion, right? Mark Hughes liked a certain player, Harry [Redknapp] doesn’t like a certain player.’
But why couldn’t a chairman just say no to a shopaholic new manager? ‘You yourself see the results,’ replied Fernandes, ‘and you think, “God, we need some change.”’
A manager typically doesn’t care how much his wheeler-dealing costs: he doesn’t get a bonus if the club makes a profit. Billy Beane told us: ‘When you think of the structure of most sports teams, there is no benefit to a head coach in the NFL or a soccer manager to think years ahead. The person who has access to the greatest expenditure in the business has no risk in the decision-making.’ He added that the exception to this rule was Wenger. Beane said, ‘When I think of Arsène Wenger, I think of Warren Buffett [the billionaire investor]. Wenger runs his football club like he is going to own the club for one hundred years.’
The worst time to buy a player is in the summer when he’s just done well at a big tournament. Everyone in the transfer market has seen how good the player is, but he is exhausted and quite likely sated with success. As Ferguson admitted after retiring from United: ‘I was always wary of buying players on the back of good tournament performances. I did it at the 1996 European Championship, which prompted me to move for Jordi Cruyff and Karel Poborský. Both had excellent runs in that tournament, but I didn’t receive the kind of value their countries did that summer. They weren’t bad buys, but sometimes players get themselves motivated and prepared for World Cups and European Championships and after that there can be a levelling off.’
Moreover, if you buy a player because of a good tournament, you are judging him on a very small sample of games. Take, for instance, Arsenal’s purchase of the Danish midfielder John Jensen in July 1992. The previous month, Jensen had scored a cracking long-range goal in the European Championship final against Germany. Arsenal’s then manager, George Graham, told the British media that Jensen was a goal-scoring midfielder.
But he wasn’t. The goal against Germany had been a one-off. Jensen would go years without scoring for Arsenal. Over time this failing actually turned him into a cult hero: whenever he got the ball, even in his own penalty area, the crowd at Highbury would joyously shout, ‘Shoot!’ By the time Jensen left Arsenal in 1996, he had scored one goal in four years. (Arsenal fans printed T-shirts saying, ‘I was there when John Jensen scored.’) Graham’s mistake had been to extrapolate from that single famous goal against Germany. This is an example of the so-called availability heuristic: the more available a piece of information is to the memory, the more likely it is to influence your decision, even when the information is irrelevant.
Signing these shooting stars fits what Moneyball calls ‘a tendency to be overly influenced by a guy’s most recent performance: what he did last was not necessarily what he would do next’.
Real Madrid are of course the supreme consumer of shooting stars. This is largely because the club’s fans demand it. Madrid (or Spurs, or Marseille) probably aren’t even trying to be rational in the transfer market. The club’s aim is not to buy the best results for as little money as possible. When it bought the Colombian James Rodríguez for about £63 million in 2014, it
