The goal of this article series is to offer a road map for successfully operating a professional soccer club. As someone who has run multiple clubs, I offer a candid approach to the modern game – and business – of professional soccer.
Importantly, most everything written in this article will validate the “exception proves the rule” axiom. Global soccer is a vast ocean and within it there are always exceptions to any operating principle, strategy, trend, etc.
The goal for successful operation of a club should not be: “How do we capture lightning in a bottle and win a title?” but rather: “How do we consistently create lightning?”
Let’s start with the sexy part
Owners without a strategic plan are doomed to fail
Owners want to be most engaged on their club’s soccer side. It’s a very appealing part of ownership. Buying and selling players, watching their phone light up as their manager’s name scrolls across the screen, offering tactical advice – they want all of it. Unfortunately, ‘all of it’ has often included making very costly mistakes repeatedly, piling up annual financial losses, and often alienating club supporters.
The main reason behind this? Most often it’s because there is simply no strategic plan. Many of these highly successful business owners/investors will scoff at this characterisation. They’ll note how strategically they run their main businesses and explain they plan to buy players cheaply, sell them for enormous profit, and win league titles and cups along the way, all whilst embracing the club’s heritage and growing its brand internationally.
Then, using vague criteria and intuition, they’ll hire a manager, giving him blanket authority to build the squad, play any style of soccer he prefers, and run the soccer operations group as he sees fit. And when results disappoint? They’ll sack that manager, hire another who most often implements a different style of play requiring different types of players and a realignment of the entire soccer operations group. Such start-overs always cost a club – financially, competitively, and often dilute value within the club’s academy. This short-termist approach is perhaps the most damaging factor to a club’s long-term performance. The good news? This instability cycle is avoidable.
Defining success realistically
How many points must a club earn in a season to compete for a title? Ownership groups, fans and many pundits will say fielding a squad that scores 90-plus points in a season is a good bet. True, yet in reality the cost of doing so in the short term is prohibitive for all but the wealthiest clubs.
But cost-efficient competitiveness is achievable. In the big five European leagues over the last 20 years, more than half of all titles (53 per cent) have been won with 84 points or less, and nearly a third of all titles (30 per cent) have been won with point totals in the 60s and 70s.
‘Down’ years points-wise happen more often than we think (see Leicester City’s 81 points winning the Premier League in 2016). Becoming an efficiently run club performing in the 65-84 point range is surely doable. History shows a club performing in that range consistently could well win a league title, say once a decade. Obviously no guarantees, but ask yourself, if your hometown club won two or three titles in the last 30 years, while regularly playing in Uefa competitions, would it be considered a success? Undoubtedly so.
The key to achieving consistent high performance levels is structuring a stable soccer operations group that delivers a competitive squad, within a manageable budget, durable enough to withstand soccer operations regime changes, player churn, and the random happenings of full-season top flight soccer campaigns. OK, but how does one do that?
Defining a club’s identity and style of play
High performance begins with consistency of approach. There are any number of styles of play a club can adopt – and many mistakenly change theirs to suit their latest manager’s preferences. This approach is fundamentally backwards. A club should commit to a style of play and player development principles and then run its decision-making processes through those parameters.
Not long ago, Barcelona had a dominant stretch fully committed to possession soccer. More recently, Liverpool, Manchester City and Bayern Munich have been fully committed to pressing, high intensity soccer, with title-winning results. Attacking, patient and suffocating, counter-attacking: the identity a club embraces allows it to deliver a style of play that should attract like-minded managers and players.
Pep Guardiola's Barcelona dominated soccer with a possession-based style
As soccer is an ever-evolving game, a club’s ability to recognise emerging trends and incorporate them into its style of play is critical to remaining competitive. For example, as high intensity, pressing play has emerged, players who can be utilised in multiple roles during a match – positional fluidity – have become more sought-after. Managers also need the freedom to implement their own approach to any style of play a club embraces. Indeed, prioritising player skillset versatility is an essential way to avoid being too rigidly aligned to any single technical approach. It empowers new managers to implement their programme whilst still allowing a club to maintain its on-the-pitch identity over time.
Once a club commits to a style of play, all manner of decision-making can index off that. Soccer operations staff hiring, player recruitment, training methodology – all those choices should be evaluated against the demands of the club’s approach. Before we get to those choices, however, we need to properly structure the decision-making process.
The importance of a durable chain of command
Operational effectiveness flows directly from a proper chain of command. Many clubs still ignore this critical structuring component. Historically, custom dictated hiring a single person to manage all things soccer, including the ball in play. This worked when soccer operations was a manager, an assistant coach or two, a club secretary, and a physio. In the modern game, a club’s soccer operations group is a multi-level organisation spanning first team performance, player recruitment, contract structuring/squad management, analytics and opposition scouting, academy management, representation in league-related matters, personnel management of dozens of non-playing staff, etc. A simple question: why should your club’s manager be spending time on many of these non-first team performance-related tasks?
“If you imagine,” explains Charles Gould, founder of Retexo Intelligence, a leading analytics and advisory firm working for leading European soccer clubs, “that a manager’s main focus should be the development of existing players and securing the right result in the next match, how and why should he/she have the time to be doing anything else?”
Clubs need a clear chain of command in order to avoid conflict
The leadership of this large and complex organisation should be vested in a sporting director/general manager (SD/GM) who is responsible for – and accountable for – all soccer-related matters. The SD/GM should report directly to the managing owner, chair, or chief executive, depending on the managing owner’s preference.
As Gould notes: “Recruiting and empowering the best [SD/GM] possible is a means of protecting ownership and ensuring that the player identification and acquisition strategic processes are in the hands of a professional working towards a pre-defined set of objectives.”
The manager should report to the SD/GM. Why? The SD/GM is charged with building and maintaining club competitiveness over a years-long window, recruitment and monetisation of player assets, and identification, signing, and development of younger talent from academy to first squad. The manager is responsible for winning this week’s match. The two sets of goals are complementary but when vested in a single individual they create conflict of interest as managers will, understandably, often sacrifice long-term club benefit in pursuit of winning their next match (and thereby keeping their job).
In my experience, a manager reporting directly to the managing owner instead of the SD/GM sets up ongoing channel conflict; it quite often seeds dysfunction that drags down a club’s performance levels. Ownership most often will, and should, want direct dialogue and a personal relationship with the manager, who has the minute-by-minute pulse of the playing squad. All of this is valuable. The key is to not mistake information sharing for reporting lines. For the soccer operations group to deliver consistent high performance output it must function as a single unit with a single leader focused on executing a long-term strategy.
Simplified, disciplined hiring
Successful hiring starts with matching style with structure
With a committed identity/style of play, and a clear chain of command, ownership can hire into that structure with clarity. For example, SD/GMs who have managed soccer managers (versus solely being responsible for squad management) should be prioritised. SD/GMs whose clubs have successfully played the committed style of play should be prioritised, as should managers who have a track record of success with that style of play and want to focus exclusively on first team coaching. One can see how this transparent approach adds proper rigour and discipline to the hiring processes, and minimises the ‘cult of personality’ issues that so often dominate the manager hiring process.
Player acquisition is really player recruitment
In today’s global game, the ability to acquire undervalued domestic and international players – thereby building the monetary value of your playing squad – is a direct result of consistent deep canvassing and effective analysis. Targeting talent which meets the club's playing style makes the recruitment process more efficient, and acquiring talent whose versatile skill set (eg., physical skills, soccer IQ) fits the club’s high performance training programme gives those players the best chance to improve their performance level.
The negotiations that follow the player identification process for all but the most elite clubs, who have tremendous cache and budget to match, will typically be a recruitment process. “Here’s why you (player) should play for us; here’s why you (club) should sell us player X for Y price.”
Use of analytics in player recruitment evaluation – a filtering step only
The most effective use of analytics in recruiting is as a filtering system, providing data-driven canvassing of players across domestic regions and other countries (to be clear, in-season match-based analytics of your current squad is quite different; let’s not confuse the purposes and value of each). “Player evaluation takes three principal forms,” Gould explains. ”Quantitative assessment of players’ in-game performances, qualitative assessment of players’ careers, and evaluation of the players’ characters.”
Identification of promising players should then be followed with thorough film evaluation, and finally in-person assessment. Ideally, in-person assessment of players is conducted in a home match setting so the SD/GM can discuss the player with people around the club who can provide character, temperament, and work ethic insights.
“While most analytics companies focus on the product of a player – his/her in-game contribution – more sophisticated clubs are also prioritising qualitative elements of players’ backgrounds,” says Gould. “If you focus solely on the product then you are fundamentally ignoring the source. If you can understand the source – who players are, where they are from, which coaches they have worked with, which players they have gelled with at previous clubs, why players with certain physical or technical characteristics are produced in certain regions/clubs – then the product may mean something completely different than when it is assessed in isolation.
“Clubs and companies which focus on quantitative elements at the exclusion of understanding the broader context of who a player is are missing the point.”
Simply put, nothing should replace your SD/GM using a layered range of evaluation techniques in recruitment as this methodical approach reinforces rigour, transparency, and accountability, while increasing the probability of success, throughout the player acquisition process.
Key squad-building financial metrics
Well-run clubs regularly maintain player compensation ranges between 50 and 65 per cent of annual revenues. This self-imposed salary cap range ensures long-term financial stability and the resources for strategic plan execution. Most first division clubs run annual budgets with player compensation ranging from 75 and 100 per cent (or more) of annual revenues, unsurprisingly losing significant amounts of money each season. A reminder: ownership groups consider themselves highly strategic – they wouldn’t think about running their other businesses with such a budgetary approach, so why is it acceptable here?
This financial imbalance is typically a direct result of two separate factors. One, within soccer operations: a lack of strategic planning and fiscal discipline, poorly-defined performance metrics, constant churn of managers and then the players who don’t fit a new manager’s system, etc. And two, under-developed commercial business operations producing less revenue for player investment.
How a non-soccer operations’ owner/manager can positively impact the player selection process
Let’s start with the core principle: being an avid fan or a former player in secondary school or even collegiate level counts for nothing in evaluating player talent. A sobering way to understand the difference between a professional scout/talent evaluator and the rest of us: give it your best shot and break down film of a match, take notes, go as deep as you can. Then sit silently with a professional SD/GM and watch them do it, explaining their evaluation as they proceed. They are watching a different match than the rest of us. Don’t dismiss that.
That’s not to say an owner/chair/chief executive should be hands-off. There are certainly ways to be effective. Ensure soccer operations has a multi-year plan that factors in player capabilities, contract length, player age and durability, etc, one that constantly identifies the squad’s areas of weakness.
The SD/GM is charged with building a competitive squad within budget and addressing its weaknesses. If the agreed need is to shore up the defence and, at the start of the transfer window, the player target acquisitions proposed are all strikers, or defensive reinforcements way out of budget parameters, those targets won’t fly. Ensuring the process remains disciplined is the key.
Individual player selections should remain the SD/GM’s domain so the executive can be cleanly evaluated on how those acquisitions and disposals play out over time. Weighing in on individual player acquisitions may be fun – again, the sexy part of the business – but it doesn’t let the SD/GM fully do their job while providing an out on their performance (“Well I only chose that player because you wanted him in the squad.”)
In short, respect the professionals and let them do their jobs over enough time to properly execute their plan, and hold them accountable for the results. And above all commit to and stick to the plan. It’s a winning formula; sometimes even with only 81 points.
About the author: Mark Pannes is the managing partner of Inner Market Media, a sports sector advisory firm. In addition to chairing the Center for Sports Communications & Media board, he is a teaching fellow at the University of Texas at Austin, where he is based. Having previously served as chief marketing officer of the New York Knicks and founding director of HSBC Private Bank's Global Sports Group in London, Mark has run elite professional soccer clubs on both sides of the Atlantic, where he has served as chief executive of Italian side AS Roma and the Vancouver Whitecaps Major League Soccer (MLS) franchise.
This is part one of a four-part weekly series. Part two will be published on 9th December and sees Mark explain how to implement a commercial structure and processes for maximising revenue, before delving into the all-important businesses of customer expansion (on 16th December) and stakeholder engagement (on 23rd December).