It’s all gone Tech!

Since promotion to the Premier League via the playoffs, many things have been written about Brentford FC and in particular their owner Matthew Benham and the policies he adopts in the running of his football club.

I suspect we will never find out the total details of those policies, as after all it has given not just Brentford but the Danish club FC Midtylland success, but they can’t be dismissed. Brentford have secured promotion to the holy grail of the Premier League and the riches that provides, but have done so not via sole financial backing from Benham, but by buying and selling players and realising profit on player trading for the last 6 years in the Championship.

Most clubs who trade players in this manner do not achieve the success on the pitch, because their best players are constantly leaving the club, but Benham and the people around him have managed on a constant basis to sell players and replace them with players that effortlessly step into similar performance levels. For endorsement, Midtyilland won their first title in 2014/2015 which coincided with Benham’s arrival as the majority shareholder, and have won it twice more since, making profit via player trading.

A former banker turned professional gambler, utilising algorithms to predict sporting outcomes, he has apparently taken those processes into the world of football, in particular with regards to predicting players worth - he buys cheap, they perform, and he sells high - nothing new, lots of clubs follow a Moneyball existence in various formats, it’s just that he has done it exceptionally well.

Enough of Brentford, with European football generally in financial difficulty - top clubs are struggling according to UEFA, Deloittes and any other organisation that analyses the clubs. Top club revenues are derived from broadcasting rights, commercial income and matchday revenue. Matchday revenue has been virtually non-existent for the last 14 months due to Covid, broadcasting and commercial revenues diminishing because of it.

The top clubs have overspent on transfer fees, and also on player salaries, and debt has grown exponentially. When revenues decrease as they have done, that debt becomes very difficult to service. The smaller clubs are more dependent on match day revenues over commercial and broadcasting, thus its magnified for them.

UEFA have stated that they will look to impose tighter Financial Fair Play rules to provide more sustainability, reducing expenditure on player transfers and player salaries. A reduction in player transfers will cause untold problems for some clubs, as the capital won’t be circulated amongst those who need it. We all read that the Top 5 leagues spend circa 5bn per annum (pre-Covid) on transfers but in reality its just circulated capital within the football ecosystem. Real Madrid buy a player from Chelsea, Chelsea buy one from Leverkusen, Leverkusen buy one from Porto, Porto buy one from real Madrid - same capital changing hands. Eventually, that capital finds its way into other European leagues and drips through the football ecosystem.

Most clubs need to change their policies to those akin to Benham’s. They don’t have to be 100% Moneyball, but they should put systems in place whereby player trading is at the forefront of their minds, that having a policy such as this means that eventually your players will be sold, and an immediate replacement is required, to continue the recycling.

There are successful clubs who do this in many leagues - Porto in Portugal for instance, Atalanta in Italy. All having their own logistical problems at the moment and I am certain adapting because of it, but player trading as a real focus over and above immediate success is likely to lead to more sustainability.