Comparing management performance of Belgian football clubs

Késenne, Stefan Book Part Comparing management performance of Belgian football clubs Provided in Cooperation with: Hamburg Institute of International Economics (HWWI) Suggested Citation: Késenne, Stefan (2012) : Comparing management performance of Belgian football clubs, In: Büch, Martin-Peter Maennig, Wolfgang Schulke, Hans-Jürgen (Ed.): Zur Ökonomik von Spitzenleistungen im internationalen Sport, ISBN 979-3-937816-87-6, Hamburg University Press, Hamburg, pp. 195-205, https://doi.org/10.15460/hup.250.1898 This Version is available at: https://hdl.handle.net/10419/61483 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by-nc-nd/2.0/de/ Reihe Edition HWWI Band 3 Stefan Késenne Comparing Management Performance of Belgian Football Clubs in: Zur Ökonomik von Spitzenleistungen im internationalen Sport Herausgegeben von Martin-Peter Büch, Wolfgang Maennig und Hans-Jürgen Schulke S. 195–205 Hamburg University Press Verlag der Staatsund Universitätsbibliothek Hamburg Carl von Ossietzky Impressum Bibliografische Information der Deutschen Nationalbibliothek Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar. Die Online-Version dieser Publikation ist auf den Verlagswebseiten frei verfügbar (open access). 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Open access über die folgenden Webseiten: Hamburg University Press – http://hup.sub.uni-hamburg.de PURL: http://hup.sub.uni-hamburg.de/HamburgUP/HWWI3_Oekonomik Archivserver der Deutschen Nationalbibliothek – http://http://deposit.ddb.de/index.htm ISBN 978-3-937816-87-6 (Printausgabe) ISSN 1865-7974 (Printausgabe) © 2012 Hamburg University Press, Verlag der Staatsund Universitätsbibliothek Hamburg Carl von Ossietzky, Deutschland Produktion: Elbe-Werkstätten GmbH, Hamburg, Deutschland http://www.ew-gmbh.de Inhalt Abbildungen 7 Tabellen 7 Zur Ökonomik von Spitzenleistungen im internationalen Sport – einige Bemerkungen vorab 9 Martin-Peter Büch, Wolfgang Maennig und Hans-Jürgen Schulke Efficient Use of Resources in Sports Associations – Key Success Factors of the German Field Hockey Association 15 Uschi Schmitz Revealed Comparative Advantage and Specialisation in Athletics 25 Cindy Du Bois and Bruno Heyndels Regulation and Football Brand: Can We Talk About a Taylor Effect on the Performances of The Red Devils? 49 João Leitão Competitive Balance in the NFL? 73 Rodney J. Paul and Andrew P. Weinbach Reorganisation in Verbänden und Institutionen – Voraussetzung für den Leistungssport 85 Bernhard Schwank Listening To Community Voices – Athlone and Green Point Residents’ Views on the Location of the 2010 FIFA World Cup Stadium in Cape Town 101 Kamilla Swart and Urmilla Bob Table of Contents Professional Sports, Hurricane Katrina, and the Economic Redevelopment of New Orleans 123 Robert A. Baade and Victor A. Matheson Die Vergabe der Olympischen Spiele durch das IOC – eine institutionenökonomische Analyse 147 Frank Daumann und Hannes Hofmeister Comparing Management Performance of Belgian Football Clubs 195 Stefan Késenne Public-Private Partnership in Singapore Sports Hub 207 Belinda Yuen Abkürzungsverzeichnis 231 Zur Ökonomik von Spitzenleistungen im internationalen Sport 233 Referenten und Referate des 7. Internationalen Hamburger Symposiums „Sport und Ökonomie“ am 31. August und 1. September 2007 Abbildungen Büch, Maennig und Schulke Abb. 1: Sportproduktion 10 Schmitz Fig. 1: Organizational Structure of the DHB 17 Fig. 2: Development of TV Coverage 2001–2006 (Million Viewers) 20 Fig. 3: Pyramid of Sponsors and Partners 21 Paul and Weinbach Fig. 1: NFL Standard Deviation of Win Percentage 78 Fig. 2: NFL Average Printspread 79 Fig. 3: NFL Standard Deviation of the Printspread 79 Késenne Fig. 1: Basic Model 198 Tabellen Du Bois and Heyndels Tab. 1: Index RS for Revealed Symmetric Comparative Advantage (RSCA) in Athletics, IAAF-rankings 2005 (main categories) – Selection of Countries 32 Tab. 2: Explaining RSCA-index (main categories) 38 Tab.. 3 a: Explaining RSCA-index (sub categories; only outcome equations are reported) 39 Tab. 3 b: Explaining RSCA-index (sub categories – continued; only outcome equations are reported) 40 Tab. A 1: Index for Revealed Symmetric Comparative Advantage in Athletics for 12 Event Categories – Selected Countries 45 Leitão Tab. 1: The ADF Tests, and the PP Tests, Including Constant and Tendency 60 Tab. 2: The ADF Tests, and the PP Tests, Without Constant and Without Tendency 60 Tab.. 3: Selection of the Optimal Number of Lags 61 Tab. 4: Detection of Error Autocorrelation 62 Tab. 5: The Cointegration Tests 63 Tab. 6: The Contrasts of the Granger Causalities 64 Tab. 7: Dynamic Analysis of the Significant Causalities Relationships 65 Paul and Weinbach Tab. 1: Measures of Competitive Balance in the NFL – Preand Post-Salary Cap 80 Swart and Bob Tab. 1: Length of Stay in the Area (in %) 109 Tab. 2: Name of Area Where the Competition Venue Will Be Located in Cape Town (in %) 110 Tab.. 3: Name of Area in Which the Legacy Stadium Will Be Located in Cape Town (in %) 111 Tab. 4: Respondent’s Level of Agreement in Athlone towards Statements Pertaining to Key Aspects of Venue and 2010 Event (in %) 114 Tab. 5: Respondent’s Level of Agreement in Green Point towards Statements Pertaining to Key Aspects of Venue and 2010 Event (in %) 115 Baade and Matheson Tab. 1: Summary Statistics for U.S. Metropolitan Areas (2004) 125 Tab. 2: Aggregate Measures of the Fraction of the Economic Activity for Selected Cities and the United States Represented by the “Accommodation and Food Service Industry” (NAICS 72) for 2004 129 Tab. 3: Aggregate Measures of the Fraction of New Orleans Economic Activity in Total Represented by Spectator Sports for 1997 131 Tab. 4: Comparing the Preand Post-Katrina Economies for the New Orleans MSA 135 Kesénne Tab. 1: Statistics 200 Tab. 2: Correlation Matrix 201 Tab.. 3: Reduced-form Estimation 202 Tab. 4: Structural-form Estimation 204 Yuen Tab. 1: Singapore Sports Hub PPP Process 219 Tab. 2: Singapore Sports Hub Finalist Consortia 221 Comparing Management Performances of Belgian Football Clubs Stefan Késenne Introduction Over the last decade, Belgian football has been suffering, both on a national and on a club level. For the first time in many decades, the Belgian national team did not qualify for the World Cup and the UEFA EURO. The team did not participate in the World Cup 2006 in Germany, was absent at EURO 2004 in Portugal and will not be present at EURO 2008 in Austria and Switzerland. Fortunately, the Belgian football federation was the co-organizer of EURO 2000 together with the Netherlands, so that both countries were qualified without playing the qualification rounds. Also, for the first time in many years, no Belgian club qualified for the UEFA Champions League in 2006–2007. Many reasons have been put forward to explain this débâcle. The Bosman verdict of the European Court of Justice in 1995 seems to be the main scapegoat. It is not so much the abolition of the transfer system, but rather the opening of the European player market by abolishing the so-called “3+2 rule”, which limited the number of foreign players that could be fielded, that has had a major impact. Opening the European player market, and leaving the European product market closed, is asking for trouble.1 All former top clubs in the small European countries have experienced an exodus of all their best players to larger countries such as England, Spain, Italy, and Germany; a process that has been enforced by the media rights explosion in the these countries. This obviously weakens the playing qualities of the teams, and can also explain the weak performances of the national team. With few exceptions, many Belgian 1 Késenne (2007). 196 Stefan Késenne players on foreign teams end up on the bench or on the B-team, losing their competitive edge. In our opinion, things went wrong after 1995 because of the slow move of the football clubs, as well as the Belgian football federation (KBVB), to professional management. Belgian football clubs faced serious financial problems after the Bosman verdict because club managers offered and paid higher player salaries when there was no money for any general salary increase. In addition to this short-sighted management reaction, the general neglect and the low quality of youth training and formation are also to blame. After Bosman, and the abolition of the transfer system, many club managers considered it useless to spend money on youth training because if a promising young player were to show up, he would be hired by a larger and better paying club without any compensation. Instead, they turned to the transfer market and tried to attract many low-paid foreign players. What they overlooked is that, if one out of ten young players runs off, there are still nine to stay and to strengthen the team. In this contribution, we concentrate on management performances. We try to compare the management performances of the Belgian first division teams. Is Anderlecht, by far the richest Belgian club, a well-managed club compared with its Belgian competitors; does the club perform according to its potential? This analysis does not pretend to conclude anything regarding the absolute quality of Belgian club management. The Model In many applications, the total season budget, or the total season revenue, of a club is considered as the most relevant indicator of its potential playing strength. In a liberalized player market, a rich club can attract the best players by offering the highest salaries. If one compares the average season budgets of the Belgian first-division teams and the number of points in the final ranking over a period of eight years, one finds a correlation coefficient of 0.90. The ordinary least squares (OLS) estimation of the linear relationship between these two variables, with the t-values in parentheses, results in: Comparing Management Performances of Belgian Football Clubs 203 Variable Coefficient t-Statistic Brugge 17.8 Genk 11.7 Standard 5.5 Anderlecht 2.7 Lokeren 1.7 Westerlo 1.4 Mouscron 0.2 Gent -1.0 Lierse -3.9 St-Truiden -4.1 GBA -9.0 Charleroi -10.3 Beveren -12.8 Unweighted statistics including random effects R-squared 0.66 DW 1.86 Number of Obs 104 The quality of the clubs’ marketing policies can be detected by looking at the structural-form equations for attendance and revenue. They were comparable to the results found in the reduced form and are not presented here. The structural-form equation for the winning percentage reveals more about another important management quality. As mentioned above, the random effects in Equation (3) indicate how well a club is managed in terms of talent scouting, youth training and coaching. These results are presented in Table 4. From this, it turns out that Anderlecht has been doing a poor job, because it ranks only ninth and is performing worse than average in the first division. This does not come as a surprise for most football adepts. Over the last decade, Anderlecht has attracted and bought many expensive players on the transfer market who did not perform. They have also hired and fired many coaches, sometimes 204 Stefan Késenne three in one season, whereas many empirical studies have shown that changing coaches mid-season is ineffective and a waste of money.3 Table 4: Structural-form Estimation Variable Coefficient t-Statistic C37.4 13.51 Market 0.02 0.95 Champions League 1.36 4.24 Random Effects: Measuring General Management Quality Brugge 8.3 Genk 4.3 Standard 3.1 Anderlecht 2.5 Lokeren 1.3 Westerlo 1.1 Mouscron -1.2 Gent -1.5 Lierse -1.8 St-Truiden -2 GBA -2.6 Charleroi -3.5 Beveren -7.9 Unweighted Statistics including Random Effects R-squared 0.64 DW 1.93 Number of Obs 104 3 Koning (2003). Comparing Management Performances of Belgian Football Clubs 205 Conclusions One of the conclusions from this oversimplified analysis is that the four richest football clubs in Belgium are also the best-managed clubs. However, one can see that Brugge and Genk are clearly outperforming Anderlecht, which is by far the club with the largest market and budget. Also, a few clubs with very small markets, such as Lokeren and Westerlo, are performing quite well. The main weakness of Anderlecht is its performance in training, coaching, scouting and transfer policy. With less money, its main competitor, Brugge, has done a much better job between 2000 and 2007. Obviously, more research is necessary to derive robust conclusions; more variables have to enter the analysis to correct for their impact on the playing performances of teams. However, there is a dramatic lack of data, information, and openness concerning the Belgian football clubs, and even the data that are available are unreliable. But, if one cannot turn the wind one must turn the mill-sails. References Késenne, S. (2007): The Peculiar International Economics of Professional Team Sports, Scottish Journal of Political Economy, Vol. 54, No. 3, pp. 388–99. Koning, R. (2003): An Econometric Evaluation of the Effect of Firing a Coach on Team Performance, Journal of Applied Economics, Vol. 35, No. 5, pp. 555–564. Noll, R. (1974): Government and the Sports Business, Brookings Institution, Washington. Quirk J., Fort, R. D. (1992): Pay Dirt – The Business of Professional Team Sports, Princeton University Press, Princeton. Szymanski S. (2003): The Economic Design of Sporting Contests, Journal of Economic Literature, Vol. 41, No. 4, pp. 1137–1187.