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Data Rant: how much will the Glazers release this summer?

May 24, 2014 Tags: , Data 16 comments
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Helped by few suspect refereeing decisions Guus Hiddink took South Korea to the semi-finals of the 2002 World Cup. In the process the Dutch manager confused many Korean journalists by referring to his 3-5-2 system as “1-3-3-2-2” – he often preached that a player’s position is always relative to others and that the goalkeeper is crucial in building up play. In a similar fashion incoming Manchester United manager Louis van Gaal also prefers to use the term “1-2-3-2-3” instead of 4-3-3.

Even though former Chelsea manager Hiddink rated the more innately gifted Chun-Soo Lee higher than Ji-Sung Park – it was Park that Hiddink brought to Europe after Lee turned down the Dutchman’s offer. The former Red winger was preferred throughout the 2002 World Cup campaign because versatility is more important than virtuosity in any system that starts with “1.”

At United van Gaal will find one too many specialists for these Dutch sensibilities, but the Dutch manager could appreciate the versatility of Ashley Young and Danny Welbeck. Even Tom Cleverley may have a shot at redemption with the new boss. And while many players at Old Trafford fall short of world class, van Gaal will find an array of ingredients at his disposal for a system that emphasises the collective. After all, United’s disastrous 2013/14 campaign was carried out with more or less same players that won the 2012/13 Premier League.

van Gaal will strengthen this summer, but United lagged only Manchester City in net transfer spending last season. Considering that the Reds won the Premier League in the previous campaign with an 11 point gap, United could very well boast the best “collective” in England.

Table 1

In a previous column Data Rant looked at the relationship between playing career and managerial success. Each point in Figure 1, below, represents a manager at one of the top 25 European clubs as measured by UEFA coefficient.

Methodology
1) All categories are weighted equally
2) Each figure has been adjusted relative to the “best” in each category
3) Assumptions dictating linear regression have not been held strict
4) In case of a caretaker manager/vacancy, the previous permanent coach’s figures have been used

Close examination of the data shows two distinct clusters of data: points to the far right behave as if they are separated from those to their left. These are managers, such as Sami Hyypia and Diego Simeone, who enjoyed a highly distinguished playing career, including numerous international appearances. We’ll limit our analysis to managers who had a more pedestrian playing career.

Figure-1 - managerial experience

Using this analysis – judging by his ‘peer group’ alone – van Gaal will boast a win ratio of around 66 per cent, which puts United in a title fight next season. This is not guaranteed, of course, but does suggest that the Dutchman’s experience will count for much more than David Moyes’. Using this model the Scot is predicted to produce a meager 55 per cent win ratio – he actually won 53 per cent in his time with the Reds.

Managerial history does not exist in a vacuum though; squad depth and strengthening counts. Although every new manager likes to bring in few players, the mooted £150 million summer budget seems out of scale given the Glazers’ history. It may not even be needed to compete next season. Manchester City’s hands are tied by the Financial Fair Play, Chelsea is walking a fine line with UEFA, while neither Arsenal nor Liverpool are likely to be the largest players in the market this summer.

van Gaal has to shore up his defence, but it is a task that is unlikely to cost £150 million. After all, Liverpool has spent two seasons out of the Champions League with little repercussions in terms of sponsorship revenue, so the Glazers could conceivably ask van Gaal to complete a season with a seemingly decent squad at hand before breaking the bank if disaster strikes again.

Yet, it seems unlikely that United is briefing the press merely to hype the Dutchman’s impending arrival. Indeed, the club has spent heavily in the market of late, which begs the question: what motivates the Glazers to spend now, rather than take the money for themselves?

Figure-2 - United's net spend

It makes logical sense if clubs all stopped spending, of course, but each wants to improve its position. In addition, no club knows whether its rivals will invest, or how much. This has created an ‘arms race’ for players, much like the one during the Cold War where the US and Russia stockpiled nuclear weapons.

But there is also a profit trade-off in heavily investing, with little bottom line difference between finishing fourth and winning the title. Yet, it is impossible for the Glazers to know how much they need to spend because there are other clubs aiming to reach the top four as well. After all, United could get trumped by Arsenal pulling off a big last minute signing. Rational owners of leading teams, therefore, must aim for the top simply because the possibility exists that rivals will beat them to the real prize, Champions League football.

In this scenario each transfer window becomes an auction for a single, collective, “top four.” The Glazers are bidding blind since they have no accurate idea of how other clubs will behave. This auction is particularly cruel in that they have to pay up even if they lose.

Glazers Pay Off Matrix

However, it is irrational to bid the true valuation of a top four finish in this ‘auction.’ It doesn’t make sense for the Glazers to pay more than the value they believe Champions League football is worth. Should the Glazers bid to the limit of their valuation, the Tampa Bay Buccaneers owners will not make any profit even if they “win.” By bidding lower than true value of Champions League football, the Glazers will minimise their loss. Not only do they minimise the loss, but they really profit if, and only if, they pay less than the value available to them.

Notice that the Glazers’ expected payoff increases as they lower their bid to reach the top four. Indeed, the Glazers siphoned much from the club’s coffers prior to 2011, during a period in which they supported Sir Alex Ferguson with words rather than the wallet.

However, losing out on £40 million by refusing to spend £20 million is frustrating to any investor. The Glazers stumbled onto this conclusion in 2011 when City became a genuine contender for the title. Paradoxically, investing as close to true valuation of Champions League qualification as possible minimises risk at this point.

United remains a force in the Premier League so heavy recruiting will only reinforce an already strong squad. As long as the Glazers spend less than their valuation of a top four finish, they will profit – and this has proven to be their primary motivator. If the Reds bring in even one player less than they should, however, the Glazers will then ‘lose’ the entire summer’s worth of investment. The family should have learned that lesson after the failed Moyes experiment.

Tottenham Hotspur and Arsenal will also challenge next season, with Everton lurking on the periphery. Only the Glazers know how much the Champions League is truly worth to them – in prize money, matchday income and sponsorship – but they now have to spend closer than ever before to the expected outcome. In this scenario £150 million might very well be available this summer.

16 comments

Niv Dror - May 24, 2014 Reply

as many pennies as

Paul O'Donnell - May 24, 2014 Reply

apart from a lot of hot air to push ST sales, I doubt very little.

Healy - May 24, 2014 Reply

Good looking lads.

Nav Rahal - May 24, 2014 Reply

These lot don’t give a shit about winning trophies. They only give a shit about making money. Like Arsenal only give a shit about finishing 4th and getting out of the group stages of the champions league.

geoff - May 26, 2014 Reply

True mate. People blamed Moyes for everything including not getting transfer deals done which was not his responsibility! That was Edwoodward’s job DAMN IT! Moyesie work was to gather the scouts assessments of the players & hand over his appovals to the chairman who together with his team carries out the whole process.

But instead most of united fans were blind & saw moyes as a scapegoat for everything. These are signs of disillusioned fans who have no understanding of how their club is run.

You may put this comment of mine on record that man united won’t sign any of Kroos, Fabragas, Hummels, Strootman, reus or Shaw. All this is a pipe dream. The Glazers would never release such huge funds for building the club especially now that they are rumored to be looking to sell the club at the “right value”. These vampires have milked the club for years & they are typical pure businessmen looking to get the maximum out of our empire.

MS Assefa - May 27, 2014 Reply

Moysie after he ruined the club? Moysie? You are obviously a Scot or a Liverpool fan mate.

wehavetogetfabregas - May 24, 2014 Reply

ok

Subterranean Steve - May 24, 2014 Reply

After all that, my eyes are Glazering over.

Think we should get rid of wide players and keep it narrow, preferring to focus on the spine of the team.

Perhaps a 1-1-1-1-1-1-1-1-1-1-1 would do the trick.

Kenneth I. Sporsheim - May 24, 2014 Reply

Glazer Out

JA - May 26, 2014 Reply

can you not photoshop a brown paper bag over those disgusting leeches? Their grinning faces make me want to throw up.

geoff - May 26, 2014 Reply

All smoke and mirrors. Fact one is, Woodward can’t bring home a transfer. Fact two is, United are really struggling to sell season tickets so, borrowing a tactic from other wannabe clubs, they leak ‘rumoured’ targets to their media chums in the hope that the gullible will buy. Same with all this kidology about transfer war chests. We’re meant to believe that the Glazers are serious about buying our way back to the top. Yet every year since they arrived we’ve been linked with big names but only once have they delivered. Woodward let the feckless Moyes be the patsy for last summer’s fiasco, now it’s all gonna be LVG’s fault. Talk is cheap: we need some impressive action by United before we can truly start to believe again.

We are on a decline and everyone is in denial. The appointment of Vaan Gaal brings optimism but am still doubtful if the man will be allowed to put his ideas to full implementation with the players he desire from the transfer market plus to add also the distraction from the “class of 92” who have used the fans to agitate for their inclusion in van Gaal’s staff. My question is why are is the desire to see these legends immediately into coaching & management? why didn’t the fans call on them to replace fergy? why didn’t sir alex himself not endorse them & instead went to look for an outside manager?

I hope Giggs & the class of 92 don’t become a stumbling block to the new manager but instead become implementers of his methods.

giggyjon - May 27, 2014 Reply

Possibly one of the most depressing articles yet, though very well researched. However I don’t understand why you would write an article that suggests that the Glazer’s probably wont spend because the economics don’t make sense and then you say £150m may be available.

If we spend £75m net I will be stunned!

Ed - May 27, 2014 Reply

Not the economics – its game theory. The logical approach is to spend less because of the expected outcome, but competition may force the Glazers’ hand

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