Yesterday afternoon, I linked to Zach Slaton’s latest analytics piece for Forbes. It’s a very interesting look at the limits of spending, both in the transfer market and on player wages. Slaton writes that deep-pocketed spending runs into a classic economic leveler:
There is a concept in economics called “the law of diminishing returns” that states that in the process of producing a good or service, there becomes a point where adding more of an input to the production process will yield lower per-unit returns. Thus, gains can be much larger with the first significant investment, but the gains per incremental investment will go down at some point. This can combine with another concept, diseconomies of scale, to make large improvements in big businesses very costly. These concepts can be especially challenging in very mature and costly marketplaces, where large expenditures can do very little to separate one organization’s output from another’s as all firms in the marketplace are making significant investments over time.
The footballing example Slaton cites is—surprise!—Chelsea FC. He argues that when Roman Abramovich first purchased the club and began to build his team, the club’s transfer and wage bill was significantly higher than “their next closest competitor and more than 5.5 times higher than the median Premier League club by the third year of Abramovich’s ownership.”
Since then however, market inefficiencies (ie overpaid shit players), coupled with increased spending among Chelsea’s primary competitors, coupled with the cap on XI players on the pitch, coupled with Jose Mourinho’s departure, have all led to the club’s inability to build on their initial success in the mid-naughts.
Now, footballing neutrals are watching as Rafa Benitez’s “adjustment period,” if that is in fact what it is, leads to a widening point gap in the Premier League and an possible early exit from the Capital One Cup after conceding two goals to Swansea at Stamford Bridge. Even if one takes Benitez’s claim that Chelsea would have “won that game nine times out ten” on face value, if Slaton is correct, even if Rafa’s club plays to his standard there’s no longer a guarantee that Chelsea has enough of a talent gap on its competitors to attempt some sort of Manchester United-like protracted dominance that fuel Abramovich’s wet dreams.
This should be a lesson for the bitchy Real Madrid fans who want Jose Mourinho gone. Unless one can go through the team top to bottom and find major flaws (save for Luka Modric), and better-than-like replacements that don’t already play for Barcelona, and a manager who can top Mourinho’s 73.47% win percentage, still the second-highest in the club’s history behind Manuel Pelligrini’s 75% after one season, they should be happy to have a leader so “distracting” and “controversial” and “outspoken.”
Rivalries Liverpool and United to join forces against costly away tickets.
Laudrup confident Michu to stay at Swansea.
West Brom reject Olsson bid.
Mancini’s praise of Van Persie motivates Tevez.
Udinese defender Danilo could be heading to jail for racist abuse.
Ronaldo stands up for Mourinho, asks fans to cease the abuse.
Ramos could face a lengthy suspension.
Sakai and Roecker extend contracts with Stuttgart.
Charles Gyamfi, one of Germany’s first black players.
Bit and Bobs
Hungary set to challenge FIFA ruling.
Adebayor to feature in Togo’s lineup for Africa Cup of Nations.
Balotelli sports another bizarre hairstyle, a blond mohawk.
Rangers threaten to leave Scottish league.
Thanks to Alima Hotakie for compiling today’s links.