What can you get for a hundred grand?
Last year, the FT ran a feature on FC Barcelona’s Innovation Hub, and about how the club is looking for new ways to gain a competitive edge. For most other clubs around the world, it is not possible to match Barcelona’s spending in areas such as analytics, sports science, nutrition, and stadium infrastructure, so it is vital to have a framework on how best to distribute finite budgets.
While winning isn’t everything in football, it is certainly the most important thing. As such, when weighing up a decision whether to invest in, say, an analytics department or a commercial department, it helps to have business cases that equate everything back to points on the pitch.
For argument’s sake, let’s say we have €100k in budget to invest. The business case for an analytics department might look like this: if we spend €100k, we can build a department that identifies suitable players that are cheaper than those we would have otherwise identified. We could then reinvest these savings into better players at the top end of our squad. Based on what we know about the difference between top players and their replacements, this could return an additional 1.7 points over a season (illustrative figures, of course).
The same could be applied to an equal investment in a commercial department. If we hire well, and understand our market for sponsorship, we might expect €100k to deliver €400k in additional revenue for the club, with a certain amount reinvested into the squad. Based on what we know about the relationship between wage spending and performance, this could return 0.8 points over a season (illustrative, again – though we can use both our player models and spending models to provide bespoke estimates for clubs).
This framework will only ever provide estimates for return on investment, but we’re fortunate to be in an industry where, using benchmarks and models, it can be relatively straightforward to draw a line between investment and results.
In a post-financial fair play world where unlimited spending is no longer an option, every pound, euro or dollar needs to be allocated strategically; not just on players and within the playing budget, but within all aspects of the club. Knowing how that spend will translate to points on the pitch is the clearest and simplest framework within which to operate.