Let’s talk about the Moneyball theory. This system uses statistics and data analysis to buy and sell players. Using Moneyball, teams can buy players that are undervalued and sell overvalued assets. The Oakland Athletics of 2002 was the first team in the sports industry to ever use this theory. Billy Beane went on to create history in the sports industry when he along with the A’s won a record of twenty consecutive games. This theory sparked a new fire in sports & business managementfor the years to come.
The A’s total payroll that year (2002) was $41,000,000. This went all the way and competed with the New York Yankees payroll of $121,000,000. I’ll go ahead and attach the link about a brilliant article that Bleacher Report had done on this. It gives us deep insights into the achievements of Billy Beane and the A's during that season.
Anyways, let’s talk about football. What does some baseball theory that was invented in the 2000s even have to do with the game that we all love? Apparently a lot. Not all teams have the budget of a Manchester United. Let’s be honest, clubs would love nothing more than a few extra millions to be lying around. Every club wants top-notch players, and money gives them that opportunity to buy them. But the reality is that “there are rich teams, there are poor teams, then there’s fifty feet of cr*p, and then there’s us”. (one of the most famous dialogues of the movie.) The truth is funny because this actually makes sense. Some clubs simply don’t have the spending power of the ones above them.
This is when Moneyball comes into play. Take Liverpool for instance. They spent a combined ?328,000,000 on their starting eleven. Out of which ?143,000,000 was spent on Van Dijk and Alisson. This indicates that they spent 43% of the total team valuation on two players. Liverpool aren't just spending smart, they buy what they want and improve what they have. A lot of the credit has to go to Head Coach Jurgen Klopp. In the four years he has been in charge, he has transformed this team from a top-four contender to a sure title challenger. Transfermarkt evaluates the current Liverpool eleven to be just shy of a Billion Euros. This tells us just how far Liverpool have come using this formula.
Another aspect of this theory is not only buying undervalued players. But is also to sell overvalued and unproductive players. The best part about Moneyball is that you don’t have to splash needless cash to replace former glory. Teams need to understand that they don’t just buy the player. They buy what the player represents and what he delivers to the team. For example, Let's imagine that Liverpool make a trade for Sadio Mane. Fans would demand that the money be used for another world-class forward. But theory would suggest otherwise. Moneyball advises the club to keep hold of the cash and to pay a small amount for a high potential player. This player could offer as much as what Mane used to offer but has the potential to be even better.
It was only 2018 when Phillipe Coutinho had made it clear to Liverpool that he wanted to leave. The whole fan base was left heartbroken. He was a genuine hit in the red of Merseyside and the fans adored him. He performed on a consistent basis playing out wide and sometimes more centrally. Barcelona then came up with an appetizing ?142,000,000 bid for the Brazilian national. Liverpool kindly accepted the offer and soon Coutinho played for the Spanish giants. Nowadays he’s seen in Munich as a loanee from Barca. Things didn’t work out for him in Spain. But I do wish him all the best ;)
Coutinho is a typical example of an overvalued player. Paying upwards of a hundred million for someone who’s best season only included 13 goals wasn’t very smart business. Liverpool didn’t mind the cash at all. They kindly obliged and spent the money sensibly. They procured the services of Dutch center-back Virgil Van Dijk. And Brazilian Goal-keeper, Alison Becker. These players have now gone onto becoming world-class. Liverpool managed to build a squad with a balance between youth and experience. This team can now stand toe to toe with a free-spending Manchester City side. Liverpool were successful in applying the Moneyball concept that was inherited in Oakland more than a decade ago.
I’m not trying to say that they aren't spending money. But Liverpool have managed to spend smart and spend right. Selling overvalued assets for humongous chunks and acquiring players for the right cost has been the true accomplishment of the Liverpool board.
So let’s put this question out there. Would you rather be a free-spending club known to have no boundaries or be like Liverpool who spend wisely and shrewdly? One must keep in mind that the Financial Fair Play (FFP) regulations has seen Manchester City earn an appropriate ban. They violated the UEFA rules of transfer policy from 2014-2016. This rule was implemented in 2009 to stop clubs from overspending. The money that clubs spend on transfers must be backed up by the cash that they generate. This can be done via matchday ticket sales, endorsement deals, TV rights, or player trades. Failing to operate on the lines of such UEFA guidelines would see the club getting punished.
The executives of clubs like City and United must surely take a look at the model Liverpool has created. The ban imposed onto City ought to make other clubs think about their own business models. The Moneyball concept has been recycled and remodeled many times. But if clubs want to really survive then this is a theory to consider.
