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Soccernomics

Why England Loses; Why Germany, Spain, and France Win; and Why One Day Japan, Iraq, and the United States Will Become Kings of the World’s Most Popular Sport

By Simon Kuper and Stefan Szymanski
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  • Contains 12 key ideas
Soccernomics: Why England Loses; Why Germany, Spain, and France Win; and Why One Day Japan, Iraq, and the United States Will Become Kings of the World’s Most Popular Sport by Simon Kuper and Stefan Szymanski
Synopsis

Soccernomics (2009) applies economic and data analysis to explore the way the sport of soccer is played, watched and run. It explores everything from whether world cups make us happier to why Western Europe continues to dominate the sport globally. In the process, Soccernomics shows us that much of what we think about the world’s most popular sport is wrong.

This is a Blinkist staff pick

“I’m a big football fan, and I’ve always considered myself to be somewhat an expert on the beautiful game. These blinks proved me wrong. Using data analysis they explain how football really works – from how players act on the field, to how the managers and owners behave off it. If you want to get a unique insight into the sport of football, these blinks are for you!”

– Thomas, Editor at Blinkist

Key idea 1 of 12

Soccer is a small and historically bad business.

Observers of modern soccer often lament that it’s become big business. Newly infused with commercial thinking and big money, they believe the game has lost its soul.

The truth is, soccer’s never been big business, and it still isn’t.

Most people haven’t heard of United Natural Foods, a US distributor of organic foods. It’s doing well, but isn’t yet big enough to make it onto the S&P 500 – the list of the 500 largest publicly traded US companies. It’s 75 times smaller than Walmart and by all accounts a solid but unexceptional business. Yet United Natural Foods is a bigger business than every soccer club on the planet.

During 2015-16, Manchester United’s revenue was €689 million. That’s a decent sum, but it’s still less than a tenth of United Natural Foods, and 0.2% of Walmart’s.

Most clubs are the size of a supermarket. Not a supermarket chain, but a single supermarket. Costco’s warehouse stores averaged sales of $159 million in 2016, whereas average club revenues for the 700 top-division European clubs were under $25 million.

One reason for this is that most soccer clubs are simply not run like a business.

Statistical analysis bears this out. Szymanski analyzed the behavior of English and Spanish clubs from 1993 to 2005 to see whether they were pursuing profit or victory. Profit requires limiting wages, which means fewer victories. It’s a simple trade-off. He found that if FC Barcelona wanted to maximize its profits, it would need to aim for 15th in the league to seriously reduce its wage bill. For clubs like Athletic Bilbao, their most profitable position would be in the second league – where they could save a great deal on wages. The clear conclusion was that if profit was the goal, then clubs were spending way more than they should.

The good news is that for most clubs, poor financial management doesn’t matter too much, as they are unlikely ever to go bust.

If a club gets into trouble, it can cut its wages, suffer relegation and keep on playing in a lower division. This is not normal business practice. Ford cannot, in response to poor results, sack its workforce in favor of unskilled employees producing noticeably worse cars. Consumers would simply not put up with the inferior products.

It’s true that there’s more money in soccer than ever before, but most fans can take some comfort knowing that their clubs are being run with an eye on glory rather than the bottom line.

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