Asset Management in Professional Football
Creating a High Performance Culture to maximize Return on Investment of Talent
Elite professional football provides an interesting, yet misunderstood platform for comprehending the notion of human capital maximisation and the parallels to Asset Management in the traditional business world. Asset Management can be referred to “any system that monitors and maintains things of value to an entity or group”.
Professional football at the elite level has changed beyond comprehension over the past decade. The sports sector globally is valued around £100 billion annually and football sits at the top of the tree with respect to media, fan interaction and global appeal. Drilled down on an economic level and the average player in the top 20 teams in the world will be earning between £2.5 – £10m per year.
In the vast majority of these businesses they are spending between 75-80% of their total revenue on 2-3% of their entire workforce – a strange and unique business model.
However, until recently sporting organisations very rarely viewed their players as anything more than individuals who pulled on a jersey every 4-7 days and ran around for 90 minutes with the intention of (hopefully) being more skillful and productive than the opposing group of individuals. The science traditionally stopped there.
As football has developed the players are now viewed as individual franchises within a greater corporate shell of a holding company. Each ‘franchise’ has its own cost base (salary and transfer fee), KPI’s (position specific measurements) and projected ROI (appearances, goals, assists, future transfer value, etc). This has led to the bigger sports teams investing and prioritising systems and resources to maximize their return on investment.
Operationally this manifests itself in the investment in coaching, medical care, sport science and fitness, psychological support and pastoral and lifestyle care models to support all varieties of needs.
Risk Management in this context is about taking away all the excuses for under performance by providing an infrastructure and environment that reduces unwanted distractions and thereby allowing the Manager / Coaching team with the purist opportunity to assess talent under one question – good enough or not good enough? Once players are recruited (‘picking stock’) they are viewed like any product with the question of – How do we maximize the life cycle of this product (player)?
The parallels to how the asset management world would approach this same dilemma is incredible. Example of a traditional ‘Product Life Cycle” and its parallels to football:
Stage 1 – ‘Design & Construction’
Young players joining the Academy at 7 years old and being nurtured and taught how to be an elite athlete – both on and off the pitch.
Stage 2 – ‘Commission & Operate’
Smooth out core competencies and fundamental talents and identify where they will have the biggest chance of success using their natural skills. A focus on strengths above anything.
Stage 3 – ‘Maintain & Repair’
Once into the key productivity phase of their career (between 20 – 30 years old) work focuses on which ‘marginal gains’ will give the greatest probability of success improvement. Manage injuries and illness and coach back to full peak performance.
Stage 4 – ‘Modify & Replace’
At this stage the consistency of performance is dropping as a function of age, accumulation of injury and general inability to sustain consistent high levels of physical effort and skill execution. Understanding when this deflection point around investment (financial and time) and return occurs is critical for evolving the team and managing out low returning talent.
As one can see asset management is a combination of data, facts and screening (e.g games played, per positional physical and technical returns and repeatability of effort) and subjective and contextual understanding of the talent level required to meet the companies (teams) goals and objectives.
Finally, the worlds of sport and business have so much to learn from each other across a multitude of areas. Asset Management and how we view talent as products that need investment, nurturing, maximizing and replacement is an obvious bridge that links the elite level of professional sport and the cutting edge world of top level business.
We have just started this journey together but the mutual rewards for cross pollinating ideas is there to be seen for everyone.