Men’s professional soccer in Europe is dominated by the big, moneyed clubs. It was therefore no surprise to see that this year’s Champions League final was fought out between the two big European teams that had spent more on players (net of sales) in the last two seasons than any of the other big cubs. These were Chelsea and Manchester City, with Chelsea being the only club to spend over £100m.
If you are a little fish in a pond dominated by big fish, you have to think differently to succeed… and you have to actively take risk.
Brentford FC is a little fish. It is a west London club in amongst three other west London clubs, including Chelsea. In 2009, it was in the fourth tier of English men’s soccer and needed a £500,000 loan to enable fans to take over the club. The deal was that if they did not want to pay the loan back, the loan provider would take over the club – which happened in 2012.
The loan provider was a life-long Brentford fan, an ex-investment banker and professional sports gambler who made millions through bets placed on the basis of data analysis. Data analysis then became the guiding tool for Brentford in taking risk.
Matthew Benham changed the way Brentford thought. Winning or losing was not in itself important. Key performance indicators mattered more – they told them whether or not they were improving and where they needed to try something new.
Soccer is a naturally low scoring game – over the last 133 years of top flight football in England, the most common score has consistently been 1-0. Luck has a significant part to play in scoring goals, so chances created are a more important KPI – focussing on something other than your objective is often referred to as “obliquity”: e.g. if you want to make £1bn profit, you don’t focus on the profit, you focus on the great customer service that will deliver that profit.
The club also picked up rejects from other clubs in the 17-20 year-old bracket. Benham’s analysis suggested that you need to assess a young player over at least 35 games to work out their potential. Big clubs rarely give them the chance to demonstrate their ability. By taking a chance on rejected young players, trying them out and bringing on the good ones, Brentford earned millions in profit on selling those players later.
Benham bought a Danish club where he tested out his ideas – off-line, as it were. The club, FC Midtjylland, has won three league titles and two second places since Benham’s involvement.
It has taken a several years of work using the Benham method, but this season Brentford managed to get back into the top flight of English soccer for the first time in 74 years. One season in the premier league is worth at least £200m to them.
Having decided to take risks based on data analysis, Brentford have tested and learned as they went along. If they had not, it wasn’t that there was a risk of them wallowing in the lower leagues, it was a certainty.
Data Sources: FT analysis of Deloitte Football Money League, @JoePompliano on Twitter, Soccernomics – Simon Kuper and Stefan Szymanski, Wikipedia, The Daily Star