January 27, 2012 9:53 pm

Football’s best managers

A look into club accounts reveals some unexpected top performers among football managers

Paul Sturrock sits in the overlit little manager’s office at Southend United Football Club. A flat-screen TV on the wall is set to Sky Sports. Otherwise, this is the bare office of a man who is not putting down any roots here. Southend play in League Two, the bottom tier of English professional football. Their stadium, Roots Hall, was a rubbish dump until the club reclaimed it in the 1950s. On this freezing December night, they are preparing to receive lowly Bradford City.

Sturrock arrived here in 2010, sapped by Parkinson’s disease, to find a penniless club. “My first day was probably the biggest shock of my life when nine players turned up for training,” he reminisces. “Five of them gave me letters of resignation because they hadn’t been paid.” Amid the sea of Essex accents, his soft Scottish burr stands out: the football industry inflicts that kind of displacement.

More

Simon Kuper

Sturrock should be at a much bigger club than Southend. He is an excellent manager. Going into this weekend, Southend are top of League Two and look headed for promotion – a common fate for Sturrock’s clubs.

But football does a bad job of valuing managers. Football managers are modern celebrities, yet the vast majority appear to add no value to their teams, and could probably be replaced by their secretaries or stuffed teddy bears without anyone noticing. Only a few managers, such as Sturrock and Alex Ferguson, consistently improve their teams. Yet some of these excellent few get overlooked. All these findings emerge from a 37-year study of English football managers by Stefan Szymanski, economics professor at the University of Michigan, with whom I wrote the book Soccernomics.

 

Football’s mistaken valuations of its managers raise questions that go beyond the game: how much value do managers or chief executives in any industry add? And how do employers gauge that value?

Generally speaking, the people who matter most in football aren’t managers but players. The market in footballers, unlike the market in managers, is frighteningly efficient. It’s easy to judge players, because they do their jobs in public, sometimes in front of millions of judges. In Soccernomics, Szymanski showed that players largely earn what they are worth, judged by their contribution to their teams’ performance. He found that the size of each English club’s wage bill (taking data from 1978 to 2010) largely explained where the club finished in the league. The club that paid the highest wages typically came top; the club that paid least came last. The correlation between players’ wages and league position was about 90 per cent, if you took each club’s average over about 15 years. As Sturrock says, “Money talks, and money decides where you finish up in the leagues.”

Alex Ferguson

Sir Alex Ferguson

12 Premier League titles (1992/93, 1993/94, 1995/96, 1996/97, 1998/99, 1999/00, 2000/01, 2002/03, 2006/07, 2007/08, 2008/09, 2010/11)

2 Champions Leagues (1999, 2008)

5 FA Cups (1990, 1994, 1996, 1999, 2004)

4 League Cups (1992, 2006, 2009, 2010)

1 Cup Winners’ Cup (1991)

1 Super Cup (1991)

1 Intercontinental Cup (1999)

1 Club World Cup (2008)

If players’ wages determine results, it follows that everything else – including the manager – is just noise. Most managers are not very relevant. In the long run, they will achieve almost exactly the league positions that their players’ wages would predict.

Still, there is an important caveat. Players’ wages don’t explain everything – merely almost everything at most clubs. That leaves room for a few good managers to make a difference. The question then is: which managers finish consistently higher with their teams than you would expect given their wage bills? Or, to borrow a phrase from Real Madrid’s manager José Mourinho, who are the special ones?

Szymanski has tried to answer that question. He analysed the financial accounts of four-fifths of English professional clubs from 1973 to 2010, and identified the managers who consistently overachieved. These men are the elite.

We should note right away that Szymanski’s model gives more credit to overachieving managers at the top of football than at the bottom. England’s 92 professional teams are spread over four divisions. A manager in League Two who has the 90th smallest budget in England but manages to finish 80th nationwide is overachieving. However, a manager with the third-highest budget in England who wins the Premier League is probably overachieving even more. At football’s summit, competition is fiercer, the amount of money typically required to jump places is higher, and so managers of giant clubs predominate at the top of Szymanski’s rankings.

The managers who make his elite list divide into two groups. One half are managers of giant clubs: icons such as Ferguson, Arsène Wenger and the number one on the list, the late Bob Paisley, who won six league titles and three European Cups with Liverpool from 1974 to 1983. These men are good, and football knows that they are good. They are correctly valued. Yet the other half of Szymanski’s elite are managers scarcely known to most fans: titans of the lower divisions like Paul Sturrock, Steve Parkin, Ronnie Moore and John Beck. They too have consistently finished higher with their teams than their players’ wage bills would predict. Yet the football industry and the media industry largely ignore them. These men are good but undervalued.

Arsène Wenger

Arsène Wenger

3 Premier League titles (1998, 2002, 2004)

4 FA Cups (1998, 2002, 2003, 2005)

Some may question whether a manager of Manchester United or Arsenal can overachieve, given that their players’ wages are very high. After all, United have the highest revenues in English football, and Arsenal aren’t far behind. Surely clubs that rich ought to win league titles?

In fact, Szymanski’s list helps us understand just how much value Ferguson and Wenger add to their clubs. United and Arsenal are not in fact outsize spenders. For many years they barely outspent some of their frustrated rivals. Both clubs tend to live within their means. Manchester United habitually make operating profits, used to pay dividends, and now fork out large sums each year to repay the debts of their owners, the Glazer family. That doesn’t leave Ferguson fortunes to spend on players’ wages. He doesn’t seem to need it.

The Premier League has 20 clubs, so the average club spends 5 per cent of the division’s total wages. Manchester United are always above that 5-per cent line, but for years they weren’t very far above it. In 1995/1996, for instance, they spent just 5.8 per cent of the Premier League’s total wages but won the title. From 1991 to 2000, United’s average league position was 1.8 (ie somewhere between first and second spot) and yet in that decade the club spent only 6.8 per cent of the division’s wage bill. Ferguson was getting immense bang for his buck. In part, he owed this to the Beckham generation. Beckham, the Neville brothers, Paul Scholes, Nicky Butt and Ryan Giggs were performing like mature stars, but given their youth they would have been relatively underpaid. Ferguson also benefits from his longevity. Having been at Old Trafford since 1986, by the 1990s he had chosen every player at the club himself. He wasn’t paying the unwanted signings of his predecessors to rot in the stands. That helped keep United’s wages down.

Ferguson continued to overachieve relative to his wage bill in the 2000s, even after Beckham’s generation had become big names earning top whack. Admittedly, his over-performance diminished. From 2001 to 2010 United’s average league position was again 1.8, but in this decade he spent nearly 9 per cent of the Premier League’s total on wages. No wonder, because life had become ever more competitive at the top, with Chelsea and Manchester City getting shots of oil money and Arsenal and Liverpool receiving ever more income from the Champions League.

Paul Sturrock at a football field

Paul Sturrock. Plymouth Argyle: promoted from League Two to League One (2001/2002), promoted from League One to Championship and League Champions (2003/2004, although Sturrock left for Southampton six weeks before the promotion was confirmed). Sheffield Wednesday: promoted from League One to Championship (2004/2005). Swindon Town: Promoted from League Two to League One (2006-2007)

The sums that Ferguson requires to dominate seem still to be rising. In 2010, the last year in Szymanski’s database, United’s share of the Premier League’s wage bill peaked at just over 10 per cent. Yet even that wasn’t outsize. Manchester City were spending about the same proportion, while Chelsea accounted for 14 per cent of the Premier League’s total outlay on wages from 2004 to 2010. That’s the largest share for any top-division club in the 37 years of Szymanski’s database. Other teams, too, had exceeded 10 per cent of the division’s total spending before. In short, Ferguson is a phenomenon.

Wenger is almost as awesome. In his first seven seasons at Arsenal, from 1996/1997, he averaged a league position of 1.6 while accounting for 7.5 per cent of the Premier League’s wages. That was a bigger share than Ferguson was spending then, but hardly plutocratic. Wenger’s performance has declined since. From 2005 through 2010, Arsenal had an average league position of 3.3 while spending 8.8 per cent of the Premier League’s wages. That’s only modest overachievement.

Yet during Wenger’s worst moments, especially after Arsenal’s 8-2 thrashing at Old Trafford last August, his critics were too harsh on him. Given that he was up against richer clubs, and against another great overachieving manager in Ferguson, it would have been astonishing had Arsenal continued to win titles. In particular, it was unfair to castigate Wenger for his regular defeats to Chelsea. The wage gap between the two clubs has been vast since Roman Abramovich bought Chelsea in 2003, and gave his manager Claudio Ranieri a mammoth 16 per cent of the Premier League’s wage spending for 2003/2004.

Kenny Dalglish

Kenny Dalglish

Liverpool

3 League Championships (1985/86, 1987/88, 1989/90)

2 FA Cups (1986, 1989)

Blackburn

Promoted to Premiership (1992)

Premiership champions (1995)

Clearly Ranieri ought to have won the title. However, his failure is forgivable. Even with the highest wage bill, it’s tricky to finish top, because you are competing against both bad luck and the fairly well-funded overachievers Wenger and Ferguson. Though Mourinho’s Chelsea outspent their rivals, he deserves credit for winning two straight titles. But Mourinho spent only three full seasons in England and therefore doesn’t figure in Szymanski’s rankings.

Manchester City’s wage bill probably overtook Chelsea’s last year (the accounts are not available yet). If Ferguson can keep his neighbours from a title this season, he will have confounded the odds again. Szymanski’s ranking of managers measures only spending on wages, not on transfers, but it’s worth noting that Wenger and Ferguson typically have relatively low net spending on transfers too. That makes their high rankings here even more impressive. By contrast, Rafael Benítez – also in Szymanski’s list – splashed out on transfers at Liverpool. So although Benítez economised on wages, he didn’t get his league positions cheaply.

Down in the bottom divisions, the likes of Sturrock, Parkin, Beck and Moore seem to be performing almost as impressively as Ferguson and Wenger. Sturrock et al also finish high in the league relative to their clubs’ wage bills. Yet their overachievement mostly goes unnoticed. Beck and Moore currently don’t even have clubs. Sturrock is sitting in his office an hour before Parkin visits with lowly Bradford. And Parkin isn’t even Bradford’s manager, only the assistant. (Cruelly, Sturrock’s adversary in tonight’s match is called Parkinson: Bradford’s manager Phil.) Titans of the lower divisions get ignored.

The market in managers is mostly inefficient: some stars go unrewarded, while mediocrities continue to muddle on and find good jobs. What are men like Sturrock doing right? And why don’t they get the credit?

. . .

Sturrock played as striker for Dundee United from 1974 to 1989. He wasn’t a glamorous player – his nickname was “Luggy”, after the Scottish word “lugs” for “ears” – but he was good. He then became a manager in the Scottish league, but soon outgrew it. “I made a conscious decision that I would like to manage in England,” he says in his downbeat way, “thus finishing up one rainy day in Plymouth. And I sat in a one-bedroom flat wondering what the hell I was doing there.”

José Mourinho

José Mourinho

2 English league titles (2004/2005, 2005/2006)

1 FA Cup (2007)

2 League Cups (2005, 2007)

(Mourinho spent only three full seasons in England and therefore does not feature in Szymanski’s ratings)

He didn’t do too badly. His Plymouth won the third division with a record points total, and were closing in on another promotion when he left in spring 2004 to join the big time: the Premier League with Southampton. Sturrock did decently there too, winning five matches out of 13, pretty good for a small club. “I probably had the most successful 13 games any manager’s had at that club,” he chuckles. However, he says he left within six months after falling out with the chairman Rupert Lowe. He never got a chance in the Premier League again. Sturrock muses: “‘I’ve ‘been to the show’, as the Americans would say. The one thing I’ll say is that I enjoyed every minute of it.”

Why does he think big clubs ignore him? “Two years ago I came out with it, told everybody I had Parkinson’s. I think that has been a feature.” However, that cannot be the whole story; he was undervalued long before that. When pressed, he talks about what he calls “the Southampton debacle”. Almost despite his results, his spell there tarnished his reputation. The first time the national media noticed him as a manager, he was squabbling with his chairman at an unglamorous club. Tara Brady, Southend’s chief executive, says: “I think Southampton may have been his one shot, unfortunately.” Sturrock admits, “Maybe people tagged me that I’d failed in that environment.”

The problem for men like him is that it’s hard to judge managers on their results. After all, results are mostly down to players’ wages: that’s why Southend, say, finish lower than Chelsea. Nobody, as far as we know, has ever systematically investigated which managers overachieve relative to their clubs’ wage bills.

It’s also hard for outsiders to judge managers on their day-to-day work. Most of the biggest managerial decisions are made in private, and the outcome of those decisions – signing a certain player, say – might only become apparent much later. This difficulty of assessment also bedevils judgments of corporate chief executives. That’s why a man can appear on a magazine cover as saviour of his company one month and appear in the dock the next.

Rafael Benítez

Rafael Benítez

1 Champions League (2005)

1 Super Cup (2005)

1 FA Cup (2006)

Because clubs seldom know which managers are good, they tend to recruit managers who at least look like managers. Looking the part is crucial. Christian Gross discovered this the day he became Tottenham’s new manager in 1997. The obscure bald Swiss walked into the press conference waving a Tube ticket, saying, in a heavily Teutonic accent, “I want this to become my ticket to the dreams.” Gross looked like nobody’s idea of a manager. Spurs sacked him within months. He had previously done very well in Switzerland; after Spurs he had an excellent decade at Basel. In England, he just didn’t look right.

In the collective British mind, the ideal football manager is a white middle-aged man, an alpha male with a conservative haircut who used to be a great player (even though Szymanski has shown that success as a player does not predict success as a manager). Managers tend to get judged on surface characteristics: their ethnicity, looks, charisma, and personality clashes as reported by the media. These characteristics mostly count against Sturrock. His Parkinson’s is not immediately visible, but it slows him down. He speaks softly: more headmaster of a village primary school than leader of men. Brady says: “He’s a bit of a dour Jock. He wouldn’t come across as over-impressive.”

After Southampton, Sturrock could have waited for another big club. However, he says, “I always made my mind up to pick the first club that asked me to be their manager, after I moved on. Keep myself in work, keep myself in work.” This strategy has probably tagged him with the image of a lower-division manager. He won promotion at Sheffield Wednesday and Swindon, then returned to Plymouth and led them to their highest league position in 20 years. “We also sold all our best players,” he adds glumly. When results declined slightly, Plymouth shunted him into a commercial post. He moved to Southend in 2010.

“So. Here I am,” he laughs at himself. He had taken probably the least sought-after job in English professional football. When he arrived in Essex, Southend were facing a winding-up order for unpaid tax. They had almost no players – something of a problem for a football club. “I signed 17 players in a week,” he recalls. One was his son Blair, who has played for his father at four clubs. Sturrock prides himself on his eye for a footballer. “I think I’ve had a high percentage of players who’ve been successful. I think that’s the secret,” he says. But because of Southend’s financial mess, the league wouldn’t register his signings. Only two days before the season began, as Sturrock was preparing his youth team to masquerade as the first 11, was the embargo on transfers lifted.

Brady, a smart-suited Essex man who had made money in technology and finance, came to Southend in December 2010. In the chief executive’s office with a view of the car park, he explains: “I am fanatical about football. The club needed money. I had money.”

Football is a bizarre industry, where key employees regularly get arrested after night-time brawls, but Brady has tried to impose some reason. He employs his own “stats guy” to crunch data on, say, completed passes in the final third of the field. From the data, he has deduced a strategy: in the lower leagues you must hit long passes. Relatively unskilled players cannot pass short à la Barcelona. You need to put the ball near the other team’s goal, and keep it away from your own.

Brady inherited Sturrock by accident, but soon discovered that they thought similarly about football. Unusually for an ex-player, Sturrock cares about statistics. He too employs his own “stats guy” who sends him findings. Like Brady he has concluded from the stats that “long-ball football done in a clever way” wins matches in the lower divisions. Sturrock hasn’t used the long-ball game all his career, and presumably he would work differently if he had better players, but he believes it is right for Southend. This is not “hoof-ball”, Sturrock emphasises: it’s not just blindly punting balls long. “There’s a way of doing it. I think you’ve got to be accurately playing balls up to your front men. And supporting them.” Playing clever long-ball football is a craft.

Brady and Sturrock are not soulmates. Together they perform the awkward dance of director and manager, with each trying to lead. Sturrock says: “Tara is a hoof-ball merchant.” Just before the match, Brady says: “Me and Paul disagree on a number of things. We disagree on who should play up front today.” Yet they have built an alliance. At Southend, Sturrock is overachieving again. The club’s annual revenues are £3.2m. Brady says, “We’ve the ninth highest wage bill. We should finish ninth, right?” In fact, going into the match against Bradford, Southend are second in League Two.

This overachievement doesn’t surprise Brady. He noticed early on that Sturrock has something special. “During a game he can instantly see what is going wrong and change it, when it will take me till after the game to work out what it was.”

Having a good manager makes a “massive, massive” difference, Brady believes, because there aren’t many of them. “I think most managers are fakes,” he says. In his observation, the City is competitive and football is not. He has concluded: “Based on the competition we are up against, if we have the ninth-highest wage bill we should finish much higher than ninth.”

It’s hard to explain what good managers do right, because if it were obvious everyone would simply copy them, but if anyone can identify Sturrock’s secrets it’s Brady’s father Chris. In the course of a long career, Chris Brady has played and managed in semi-professional football, taught courses to managers in the professional game, and been a professor of management studies at various universities. He now consults for private-equity firms, helps out at Southend’s training, and argues with Sturrock about football statistics.

Football’s besetting plague, says Chris Brady, is panicked decisions. “In the corporate world you are under scrutiny every quarter. In football you are under scrutiny every quarter of an hour. Paul resists that. He never gets rushed into decisions.”

Instead, Sturrock arrives at verdicts through clever deliberation. Chris Brady says, “He’s very consultative, but he’s not interested in consensus. He’ll be interested in more or less everybody’s view. But he’s very happy to make his own decision.” And afterwards Sturrock can analyse his own decision. Sometimes he’ll say, “I f***ed up.”

Footballers listen to Sturrock, adds Brady père. “You’ve got to be with him regularly in the changing-room to see that he has this quiet influence.” But the world isn’t regularly in the changing-room with Sturrock, and therefore it struggles to value him.

Tonight Southend run out for the match against Bradford in front of 5,526 diehards. Everyone here is performing an age-old ritual: there must have been 200,000 now-forgotten matches like this in English history. Bradford are low in the table, yet it fast becomes clear that they have the better players. Their winger, Kyel Reid, who should not be in League Two, outclasses everyone at Southend. Clearly, Sturrock has led a poor team to the top of the table. Yet tonight his magic isn’t working. Not a man to stir himself unnecessarily, he once or twice even ventures out of the dugout to call to players. In the second half, he changes the game: he brings on a midfielder, Anthony Grant, and suddenly Southend have possession. Yet two minutes from time, Bradford’s Luke Oliver pokes in the game’s only goal. In the tiny press box, Bradford’s radio announcer exults. The crowd files gloomily out.

. . .

 

A month later, Southend are number one in the table. Sturrock looks headed for another unnoticed promotion. He has apparently resigned himself to life in anonymity: in mid-January he signed a new rolling contract with Southend. And yet there are recent signs that clubs are slowly becoming more rational in their choice of managers. Charismatic ex-star footballers are losing their monopoly on managerial jobs. Three of the 20 managers in today’s Premier League never played first-team professional football: Chelsea’s André Villas-Boas, Swansea’s Brendan Rodgers, and Roy Hodgson of West Bromwich Albion (he never got past Crystal Palace’s reserves). The Premier League’s historical average is one in 20. Steve Bruce, the last ex-star player without much managerial success who still managed in the division, was sacked by Sunderland in November. Meanwhile, other ex-star players such as Roy Keane, Bryan Robson and Diego Maradona are no longer in demand as managers of serious clubs. Maradona, who after a disastrous world cup with Argentina now coaches obscure Al-Wasl in Dubai, grumbled this month that management jobs go to a “closed circuit” of intimates. Something is changing.

One day the market in managers might finally become efficient. But it will probably be too late for Sturrock.

Simon Kuper’s latest book is ‘The Football Men’ (Simon & Schuster, £16.99). To comment, please email magazineletters@ft.com

.......................................................................

The special ones

The special ones
Name Rank Rank
  (by “divisional wage” method) (by “total wage” method)
Bob Paisley 1 1
Alex Ferguson 3 2
Bobby Robson 2 6
Arsène Wenger 4 4
Kenny Dalglish 6 3
Rafael Benítez 11 5
Dave Mackay 8 9
Howard Kendall 9 11
Steve Tilson 10 1
John Beck 7 21
Ronnie Moore 12 17
George Graham 16 13
David Moyes 5 25
Martin Allen 17 14
Paul Simpson 28 16
Steve Parkin 38 8
Paul Sturrock 14 35
Dave Stringer 19 33
David O’Leary 33 34

Generally in football, the team with the best-paid players wins. Only a few managers consistently finish higher than their players’ wage bills would predict. These managers are the elite.

To compile his ranking of the best managers in English football, Stefan Szymanski, economics professor at the University of Michigan, examined the accounts of 80 per cent of England’s 92 professional clubs from 1973/74 to 2009/10. He only ranked the 251 managers – out of a possible 699 – who had managed five full seasons or more, examining how they had performed relative to their players’ wage bills.

The telling statistic is the size of a club’s wages relative to those of its rivals. The average Premier League club spends 5 per cent of the division’s total wage bill. Normally, a club with an average wage bill should expect to finish in mid-table. If that club finished above mid-table, the manager was overachieving. If it finished below, he was underachieving.

Few of these 251 were underachievers: men who consistently finished lower with their teams than their players’ wage bills predicted. One example who did is Malcolm Allison, a feted assistant manager with Manchester City in the late 1960s, but a failure as a “boss”.

Szymanski estimated that between 40 and 70 of the managers consistently overachieved. That is at most 28 per cent of the 251. Very few of the other 448 managers - those who had lasted less than five full years in managerial jobs - looked like overachievers. The worst performers tended to be forced out of the profession earliest.

He drew up two lists of overachievers. The first list ranks each English club’s wage spending relative to the other 91. We have called this the “total wage method”. The second list measures each club’s spending relative only to the other clubs in its division (“divisional wage method”). Each method produced a slightly different list of overachievers. The two full lists are available at www.ft.com/szymanski. Above are the 19 names who appear on both lists – Szymanski’s best stab at identifying the best managers in England in this era.

Of course, Szymanski’s list requires some caveats. First, the valuations aren’t exact. Arsène Wenger ranks just above Kenny Dalglish in the table, but that doesn’t mean that Wenger is better. The two managers worked at different clubs at different times, and so their experiences cannot be compared.

Brian Clough with the European Cup in 1980

Brian Clough with the European Cup in 1980

Second, the list is incomplete. Brian Clough might have topped it if only there had been financial data for his glory years with Nottingham Forest in the 1970s. Forest was not a limited company then, and therefore did not lodge annual accounts at Companies House. Nor could Szymanski include performances from leagues outside England, because detailed financial data was lacking. Alex Ferguson might have ranked even higher had his brilliant years with Aberdeen been counted.

Another caveat: factors besides the manager might have caused each club’s overachievement. It’s striking that Paisley, Dalglish and Benítez all overachieved relative to wages with Liverpool, and Wenger and George Graham with Arsenal. Perhaps it is easier to overachieve at Liverpool and Arsenal because these clubs produce many excellent youth players, allowing managers to succeed while scrimping on salaries.

In fact, every manager in this table requires closer scrutiny. A club cannot simply hire a manager from this list and sit back and wait for the trophies to roll in. Some of these 19 managers succeeded in circumstances that might not be repeatable elsewhere. Bobby Robson excelled at Ipswich in the 1970s probably because he was a rare manager of the time who favoured passing football and scouted on the continent. Today he would need new tricks.

Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

LIFE AND ARTS ON TWITTER

More FT Twitter accounts