by Reg » Wed Aug 05, 2009 9:18 pm
Could be good, anyone read it?
Lehman Dies, Manchester United Survives; Thoughts on Why:
Aug. 5 (Bloomberg) -- Imagine a company that sells its star performers to the competition, rehires them within months, appoints managers on a whim and prices its product too cheaply.
Now explain why more soccer clubs don’t go bankrupt.
These and other puzzles are researched and rationalized in “Why England Lose,” a brainteaser of a book for any beach- bound soccer fan seeking more than another ghostwritten autobiography.
“In most industries a bad business goes bankrupt, but football clubs almost never do,” write Simon Kuper and Stefan Szymanski. “Despite being incompetently run, they are some of the most stable businesses on earth.”
“Why England Lose” has a broader appeal than the title’s British subject and grammar suggest. Kuper is a sports columnist for the Financial Times; Szymanski teaches at Cass Business School in London. Together, they have created a blend of “Freakonomics” and “Fever Pitch,” bringing surprising economic analysis to bear on the world’s most popular sport.
Consider the 88 clubs that formed the English Football League in 1923. In the 2007-2008 season -- some 85 years later - - 97 percent of those clubs still existed, and a majority remained in the same division, according to one study cited in the book.
Now look at what happened over a similar eight-decade time span to the 100 biggest companies worldwide in 1912. By 1995, almost half of them had ceased to exist, while many of those that survived had moved into new sectors or locations, according to a separate piece of research that the authors draw on.
The staying power of English soccer clubs is startling, given the strategic choices they make. Teams long failed, for example, to maximize the money-making potential of selling TV broadcast rights. Then, when the new Premier League sold them to Rupert Murdoch in 1992, it settled for about 60 million pounds a season (some $100 million at current rates). The league now gets about 10 times more per season, the authors say.
Another oddity: Managers are often hired because they can start work immediately. Why the sudden availability? It’s frequently because they’ve just been sacked, we learn.
So how do Manchester United and its like avoid the fate of Lehman Brothers Holdings Inc.? Answer: Soccer clubs aren’t subject to the same competitive forces that buffet most businesses, Kuper and Szymanski argue.
Yes, the teams exist to compete -- on the field. Yet they enjoy a brand loyalty and geographical appeal that most companies don’t. Their technology never becomes obsolete, foreign rivals can’t enter their markets, and debt burdens are typically absorbed by new owners. And even after a financial meltdown, as when debt-laden Leeds United dropped two divisions in a few years and lost its best players, clubs keep on going.
Sacking Skilled Workers
“Suppose that Ford could sack skilled workers and hire unskilled ones to produce worse cars; or that British Airways could replace all their pilots with people who weren’t as well qualified to fly planes,” the authors write.
Nor do clubs have much to fear from the global financial mess, they say: “Football clubs, unlike most businesses, survive crises because some of their customers stick with them no matter how lousy the product.”
This mix of economic analysis and anecdote makes for a thought-provoking, often amusing read. Here, at last, is a British answer to Michael Lewis’s baseball-meets-cash bestseller “Moneyball.”
Arsenal Fan Osama
From Osama bin Laden supporting Arsenal to the use of game theory in scoring penalty shots, the book offers a blend of stories and statistics sure to supply soccer bores with tales to tell at half time. Data crunching turns up other curiosities, showing why Norway loves soccer more than any other country and how talent scouts sometimes recommend blond players simply because they’re the ones that catch the eye.
As for the title? England doesn’t lose World Cups because, as pundits often allege, top U.K. clubs employ too many foreign players. The real reasons for the national team’s defeat range from a failure to encourage middle-class kids to play at the top level to having players who exhaust themselves before the full 90 minutes have elapsed.
This fusion of soccer and economics -- or “soccernomics,” as the book’s U.S. title puts it -- is timely given the influx of petrodollars into the game in the U.K. and Cristiano Ronaldo’s recent sale to Real Madrid for 80 million pounds ($135.5 million), a world record for a transfer.
For those signing the checks, a final piece of advice from Kuper and Szymanski: When trying to decide how well a player performs, look at his current salary, not at the size of the fat transfer fee his team is demanding.
“Why England Lose: And Other Curious Football Phenomena Explained” is from HarperSport in the U.K. and will be published in the U.S. by Nation Books under the title “Soccernomics” in October (352 pages, 15.99 pounds, $14.95).
(Simon Kennedy writes for Bloomberg News. The opinions expressed are his own.)
, I'd forgotten about this thread. 
