Soccernomics and Wages

[nasser95]

So I've been reading a book called soccernomics written by Simon Kuper and Stefan Szymanski (Definitely worth reading if you've got any free time). Early in the book, they discuss a topic that I find quite interesting regarding the correlation between wages and success. Firstly, they found that a club's net outlay on transfer fees explains only 16% of their total variation in league position. This is found for 40 english teams between 1978 and 1997. This means that spending high transfer fees has a very limited effect on your league position in the very long term. What is more telling is that wages have a 92% correlation to league position variation (Ie the more wages a club pays relative to the average, the higher their average league position). This was retested between 2003 and 2012 for english and championship clubs in that time and still holds to 90% correlation. Despite this, for any one given season, the correlation is much weaker (70%) due to numerous factors (injuries, form, refereeing).

It seems like we did follow this pattern in recent times, paying big wages and low transfer fees in general but it hasn't worked (very clearly). I personally think it just highlights something we already knew, which is that TF outlays his money in the right way but was advised by the wrong people (Ie Mark Hughes) and in that man, I have no doubt Stoke's supposed rise will inevitably fall be it now or within the next few seasons, in the same way that so many clubs did.

I'm curious to gauge what people here think about this info because it does seem rather intriguing as to why it has gone so poorly for us when all we have done is follow the route that on average, a club takes to success. Has the landscape of the sport changed?

[Midgeyboy]

Do win bonuses feature anywhere?

[Is Dom Is Good]

Sounds like an interesting read might pick it up

[nasser95]

Do win bonuses feature anywhere?

Still haven't read much of the book, for all I know it might do but I assume win bonuses surely have an effect on the mentality of a player.

[TBLOCKRANGER]

Generally speaking, a bigger club will generally attract the best players and will pay the higher wages and thus isn't it obvious that these bigger clubs will on the whole finish higher up the league. Barca and Madrid pay massive wages and are the biggest clubs, city, utd and Chelsea pay the highest wages in England (I would have guessed) and generally dominate the league in recent times. Bayern I would have thought pay the highest wages in Germany.
As to teams like Stoke don't they just reinvest in better players as they have stabilised in the premiership and therefore their wage bill will naturally go up.

The risk for clubs like Stoke (unlike the huge clubs ..the arsenals, utds, liverpools, city etc who since the Premier league was introduced will unlikely ever get relegated) is if they go down the high wages will cripple them as with Wednesday, Pompey, Leeds etc before them.

As to us Nas I don't agree we have followed the route of success of other clubs. We may have paid high wages but city paid high wages to the likes of Toure, Silva, Aguero we paid high wages to luke young, SWP, Barton and Granero. As to other clubs they stabilised first and gradually built up their squads, we paid Barton £70p/w and Cesar £80k p/w whilst getting rid of the team that originally got us up, whatever we say about Adel ..he helped us up and what do we then do ...we buy mercanaries on triple his salary and they were rubbish.

I think what we did was unprecedented, I cannot think of any other club that went up and simply bought loads of players who in the main were injured, ill, old, useless, unresponsive...players that no other clubs really wanted but we stuck them on massive wages and long term contracts. No wonder we are in debt of over £150m or whatever it is.

[nasser95]

Generally speaking, a bigger club will generally attract the best players and will pay the higher wages and thus isn't it obvious that these bigger clubs will on the whole finish higher up the league. Barca and Madrid pay massive wages and are the biggest clubs, city, utd and Chelsea pay the highest wages in England (I would have guessed) and generally dominate the league in recent times. Bayern I would have thought pay the highest wages in Germany.
As to teams like Stoke don't they just reinvest in better players as they have stabilised in the premiership and therefore their wage bill will naturally go up.

The risk for clubs like Stoke (unlike the huge clubs ..the arsenals, utds, liverpools, city etc who since the Premier league was introduced will unlikely ever get relegated) is if they go down the high wages will cripple them as with Wednesday, Pompey, Leeds etc before them.

As to us Nas I don't agree we have followed the route of success of other clubs. We may have paid high wages but city paid high wages to the likes of Toure, Silva, Aguero we paid high wages to luke young, SWP, Barton and Granero. As to other clubs they stabilised first and gradually built up their squads, we paid Barton £70p/w and Cesar £80k p/w whilst getting rid of the team that originally got us up, whatever we say about Adel ..he helped us up and what do we then do ...we buy mercanaries on triple his salary and they were rubbish.

I think what we did was unprecedented, I cannot think of any other club that went up and simply bought loads of players who in the main were injured, ill, old, useless, unresponsive...players that no other clubs really wanted but we stuck them on massive wages and long term contracts. No wonder we are in debt of over £150m or whatever it is.

Thats the point I made though, we had the right aim, people like cesar should have improved the squad and for the most, he did, but TF following the right path being focussed on wages over transfer value would have probably worked were he better advised I feel. I'm still of the belief that following the wages over fee route will work, but it needs to be done with the right people.

[brightonr]

So I've been reading a book called soccernomics written by Simon Kuper and Stefan Szymanski (Definitely worth reading if you've got any free time). Early in the book, they discuss a topic that I find quite interesting regarding the correlation between wages and success. Firstly, they found that a club's net outlay on transfer fees explains only 16% of their total variation in league position. This is found for 40 english teams between 1978 and 1997. This means that spending high transfer fees has a very limited effect on your league position in the very long term. What is more telling is that wages have a 92% correlation to league position variation (Ie the more wages a club pays relative to the average, the higher their average league position). This was retested between 2003 and 2012 for english and championship clubs in that time and still holds to 90% correlation. Despite this, for any one given season, the correlation is much weaker (70%) due to numerous factors (injuries, form, refereeing).

It seems like we did follow this pattern in recent times, paying big wages and low transfer fees in general but it hasn't worked (very clearly). I personally think it just highlights something we already knew, which is that TF outlays his money in the right way but was advised by the wrong people (Ie Mark Hughes) and in that man, I have no doubt Stoke's supposed rise will inevitably fall be it now or within the next few seasons, in the same way that so many clubs did.

I'm curious to gauge what people here think about this info because it does seem rather intriguing as to why it has gone so poorly for us when all we have done is follow the route that on average, a club takes to success. Has the landscape of the sport changed?

You love a stat Nasser, don't you?

Good post TBLOCK.

[Superhoop Jim]

Isn't the result of that study a bit of a truism, as the big, successful clubs of the time period had considerably larger wage budgets than the rest. The study implies that their league position is a result of how much they are willing to spend on wages, when the truth I expect is that the large wages they are spending is a result of their success. Doesn't mean anything.

Have to read it myself, maybe you are explaining it badly or I misunderstood it but the methodology seems really naive. An equivilant arguement would be "The USA has the most expensive fighter jets in the world, and they are really rich. We must built lots of expensive fighter jets, then we can be rich too!". The wages are a result of their success, not a cause.

[loneranger]

So I've been reading a book called soccernomics written by Simon Kuper and Stefan Szymanski (Definitely worth reading if you've got any free time). Early in the book, they discuss a topic that I find quite interesting regarding the correlation between wages and success. Firstly, they found that a club's net outlay on transfer fees explains only 16% of their total variation in league position. This is found for 40 english teams between 1978 and 1997. This means that spending high transfer fees has a very limited effect on your league position in the very long term. What is more telling is that wages have a 92% correlation to league position variation (Ie the more wages a club pays relative to the average, the higher their average league position). This was retested between 2003 and 2012 for english and championship clubs in that time and still holds to 90% correlation. Despite this, for any one given season, the correlation is much weaker (70%) due to numerous factors (injuries, form, refereeing).

It seems like we did follow this pattern in recent times, paying big wages and low transfer fees in general but it hasn't worked (very clearly). I personally think it just highlights something we already knew, which is that TF outlays his money in the right way but was advised by the wrong people (Ie Mark Hughes) and in that man, I have no doubt Stoke's supposed rise will inevitably fall be it now or within the next few seasons, in the same way that so many clubs did.

I'm curious to gauge what people here think about this info because it does seem rather intriguing as to why it has gone so poorly for us when all we have done is follow the route that on average, a club takes to success. Has the landscape of the sport changed?

On occasion my wife starts a sentence with the word so. It makes me want to river dance her head. Are you a hairdresser or suchlike n all ?

[Olly]

In a nutshell, we were spending desperately to stay up because of the ten day transfer window that tango and cash had left us with. We weren't consolidating but totally rebuilding at the wrong time.

The 'Numbers Game' is a good read too, where for example it shows that spending the same money on defenders rather than strikers, gives a club a better chance of more points in a season.

[dsqpr]

Interesting OP nasser - and that book sounds interesting too. However, I think others have nailed it above: although there may be a correlation between wages and success, I doubt there is a causal relationship - in other words, simply increasing your wages (for the same players!) won't make you more successful. The causal relationship with success is more likely in the quality of players you employ - and better players typically command higher wages.

My recollection of our descent into paying extortionate wages is along these lines: Briatore and Ecclestone said that they didn't want to pay transfer fees but instead paid higher wages. Their interest in QPR was never anything but getting us promoted and then turning us over for a profit, so they weren't planning on getting stuck paying any huge contracts for the long term. By sheer luck they got us promoted although I'm not sure we had a lot of high earners even when they were in charge, no matter what they said. Then poor naive Tony came along and not knowing any better continued on with this high wage policy thinking it was the magic formula for success. He, however, did it with the best of intentions. I think he has now finally realized that paying extortionate wages to average players is the path to bankruptcy rather than success. We are QPR not Man Utd and our path to success, if we can find it, isn't as simple as theirs.

[TBLOCKRANGER]

Interesting OP nasser - and that book sounds interesting too. However, I think others have nailed it above: although there may be a correlation between wages and success, I doubt there is a causal relationship - in other words, simply increasing your wages (for the same players!) won't make you more successful. The causal relationship with success is more likely in the quality of players you employ - and better players typically command higher wages.

My recollection of our descent into paying extortionate wages is along these lines: Briatore and Ecclestone said that they didn't want to pay transfer fees but instead paid higher wages. Their interest in QPR was never anything but getting us promoted and then turning us over for a profit, so they weren't planning on getting stuck paying any huge contracts for the long term. By sheer luck they got us promoted although I'm not sure we had a lot of high earners even when they were in charge, no matter what they said. Then poor naive Tony came along and not knowing any better continued on with this high wage policy thinking it was the magic formula for success. He, however, did it with the best of intentions. I think he has now finally realized that paying extortionate wages to average players is the path to bankruptcy rather than success. We are QPR not Man Utd and our path to success, if we can find it, isn't as simple as theirs.

Totally agree, clubs like Utd and Chelsea are so huge that they can absorb poor signings or signings that just don't work out, however for us we are far too small with little income stream to absorb losses,.

I previously read somewhere that Swansea limit their basic wages to something like £30k p/w but have bonuses for wins etc that rival top six clubs, this controls the clubs outcome plus players that come to the club are hungry. For us our long and costly contracts attracted players who were comfortable in doing less than nothing, I think Zaha went to Utd on £35kp/w similar to what we were paying Luke Young

[nasser95]

In a nutshell, we were spending desperately to stay up because of the ten day transfer window that tango and cash had left us with. We weren't consolidating but totally rebuilding at the wrong time.

The 'Numbers Game' is a good read too, where for example it shows that spending the same money on defenders rather than strikers, gives a club a better chance of more points in a season.

Got that one too haha. Numbers Game, Soccernomics, Inverting the pyramid and Barca are my current reading life.

[Awin]

Thank you nasser

Soccernomics - awesome book.

Seems like Les might have read it too...

Also seems like a new stadium is a must and hope they are in it for the ride as it's almost impossible to have a club break even let alone be profitable.

[Fordy]

Soccernomics - awesome book.

Seems like Les might have read it too...

Also seems like a new stadium is a must and hope they are in it for the ride as it's almost impossible to have a club break even let alone be profitable.

I'm going to give it a go aswell. Sounds a very good read