to work toward achieving breakeven for the 2018–19 season.
In 2014, Manchester City and Paris Saint-Germain (PSG) were heavily sanctioned by UEFA for breaching FFP rules. Sheikh Mansour had bought Manchester City in 2008 for £210 million ($323 million) and has since accumulated annual losses of £535 million ($823 million), excluding approximately £200 million ($308 million) on facility upgrades, all of which was covered by its billionaire owner. Similarly, PSG was bought by Qatar’s sovereign wealth fund, Qatar Investment Authority (QIA). In 2011–12, it spent massive sums for players. Although this spending at both clubs led to massive losses—especially excluding a related party sponsorship of up to €200 million ($264 million) a year by the Qatar Tourism Authority to PSG—it has led to success on the field: Manchester City has won two of the last three Premier League titles and PSG won consecutive French titles. Neither team, however, has reached the Champions League semifinals.
In 2015, UEFA found that Liverpool, despite losses of £49.8 million ($78 million) in 2012–13 and £41 million ($65 million) in 2011–12, did not breach FFP regulations, having signed a series of lucrative commercial deals over the previous eighteen months and being able to exclude some expenses.
What is little known is that only a handful of soccer teams, such as Real Madrid, Barcelona, Manchester United, and Bayern Munich, make money. As discussed, club members own Real Madrid, Barcelona, and Bayern Munich, and there is no billionaire to fund the losses. Public shareholders own Manchester United (it is traded on the NYSE) and probably expect profits.
Although there is a correlation of having the money to pay the best players to winning, it doesn’t guarantee success, especially in the Champions League. Manchester United, for example, won their first European title in 1968 but would not win that title again until 1999. And although Manchester United had the highest revenues in soccer from 1997 (when Deloitte started their soccer team revenues rankings) to 2004 (when Real Madrid took over the top spot), and has been consistently one of the top five teams in terms of revenues, the team only won one Champions League title in the 2000s, in 2008, even with one of the greatest managers in history, Sir Alex Ferguson.
In the same 2014 interview with Sean Ingle of The Guardian, Billy Beane said, “When I first came into baseball, people didn’t want to hear that a team was a business, but it is. And the better the business is run, the healthier the team on the field is going to be . . . If I’m buying stock in a [soccer] team . . . they’ve got revenues . . . they pay down their debt. And ultimately in today’s world that’s the best way for a long-term success.” Although he is referring to another soccer team, Real Madrid personifies what he is describing, which is essentially the link between on-field and off-field success.
I aim to demonstrate that there is much more to success on and off the field than data analytics and talent, and even money, and that those who do not include culture in building a winning organization are the real dinosaurs.
Interdependence (Ronaldo and Sixty Seconds)
Baseball is very different from basketball and soccer because baseball requires less team collaboration—for example, the too-much-talent effect (page 148) doesn’t negatively impact baseball teams. There are other differences and nuances that add context to any lessons learned from comparing a baseball team (or applying moneyball concepts) to not only a basketball or soccer team but also generally to organizations. Most organizations require interdependence among team members. The key takeaway: the complexity and interdependence of soccer and organizations, in contrast to baseball, puts more responsibility on the management team to create an environment or culture that is conducive to teamwork. The analysis demonstrates how strong the connection is in soccer between teamwork and scoring goals, more than basketball and much more than baseball. Combine that connection with the limited scoring opportunities in soccer, and it is self-evident that teamwork becomes vital to winning in soccer, similar to most businesses.
Baseball is a team sport that is really an accumulation of individual activities. Throwing a strike or hitting a home run is primarily an individual achievement. Each play has a start and endpoint, with a focus on a battle between pitcher and hitter. Although the events in baseball are more discrete, some interdependence still exists (e.g., the quality of the infield defense behind a groundball-oriented pitcher, player chemistry), which can have a big impact on a player’s statistics. There are nine players on the field on a baseball team. Regardless of what the other team does or a teammate does, each baseball player will come to the plate to bat around three to five times in a nine-inning game. A baseball team has at least twenty-seven different scoring opportunities. There are nine players, so each player has at least around 11 percent of the offensive opportunities to impact the game.
Contrast baseball with basketball. Basketball is a team-oriented sport requiring teammates to pass to each other and work together on the court. The five players on the court on a basketball team are interdependent and need to interact effectively under time pressure. A NBA game consists of four twelve-minute quarters, for a total of forty-eight minutes. In the NBA, there is a twenty-four-second shot clock. Instead baseball depends upon outs and innings, however long it takes.
Although interdependent, star players in the NBA can significantly impact a game. Stars LeBron James and Kobe Bryant each take, on average, 30 to 33 percent of their team’s shots. If one includes assists, each is responsible for 52 to 57 percent of his team’s shots. An NBA team, because of the shot clock, takes around 77 to 90 shots per game, so there are plenty of scoring opportunities. James and Bryant typically play 36 to 39 minutes (about 75 percent) of a 48-minute game. Each can be substituted for any reason as many times as he or the coach would like. They both touch the ball around 80 times and possess the ball for about 5 minutes per game, or around 10 percent of total playing time and around 13 to 14 percent of the time they play. James exemplified a star player’s impact during the 2014–15 NBA finals. In the finals, the Cleveland Cavaliers’ offensive rating was 93.8 points per 100 possessions. With James in the game the offensive rating was 97.3 points, and with James not in the game, it was 50.9. James only rested on the bench a total of 23 minutes over the six games, during which time the Cavaliers made only six field goals (shots). With athleticism and skill, star players can impact the game defensively as well, by shutting down one of the opposing team’s top scorers, who probably possesses the ball a greater percentage of time than his teammates. In fact, Bryant and James have been elected to the NBA All-Defensive Teams twelve and six times, respectively. As a basketball team’s performance emerges from a chain reaction of individual actions, one star player alone cannot dominate and beat the opposing NBA team. For example, Michael Jordan needed Scottie Pippen, and even the outside sharp shooting of players such as John Paxson or Steve Kerr to spread the floor and the unselfish rebounding of players such as Horace Grant or Dennis Rodman.49
This brings us back to soccer. Soccer is—like basketball, unlike baseball—a highly improvised and team-oriented sport, but even more so than basketball. Eleven soccer players form one of two teams on the field, interacting in a fluid, rapidly unfolding manner, similar to the way most nonsporting organizations work today. In soccer, a team’s probability of scoring goes up as it strings together more and more successful passes. There is no shot clock, so a team can possess the ball as long as it would like and limit scoring opportunities. However, the teams face the pressure of a timed game, which consists of two forty-five-minute halves for a total of ninety minutes. Star players like Cristiano Ronaldo and Lionel Messi can significantly impact a game, as can NBA stars, but a soccer star’s scoring is much more dependent on the player receiving passes from teammates at exactly the right time and place. Keep in mind that during the 2014 Champions League final, Ronaldo barely touched the ball in the entire first half. On average, Ronaldo and Messi possess the ball twenty times a game, three seconds each time, for a total of merely one minute per ninety-minute game. You read that right! Ronaldo and Messi touch the ball for around sixty seconds per game, around 1 percent of the game time.50 Both stars have to work for their shots,
