How to play Moneyball in MLS

(Published Feb. 3, 2015 in The Philly Soccer Page)

In all the talk about MLS clubs like Philadelphia Union playing Moneyball, there tends to be some confusion at times.

Some people mix up the concepts of Moneyball, cheap, and dumb.

In actuality, they’re quite different.

Moneyball is neither cheap nor dumb.

Cheap and dumb are, in fact, cheap and dumb, respectively.

What the Union have been doing since John Hackworth was fired, at least in terms of what is publicly apparent, is not Moneyball. Whether they will continue on that route remains to be seen.

Let’s explore what Moneyball actually is, along with how it can be used in Major League Soccer.

Moneyball: What is it?

“Moneyball” is a term coined in the Michael Lewis book, Moneyball: The Art of Winning an Unfair Game, to describe how Oakland A’s general manager Billy Beane exploited inefficiencies in Major League Baseball’s player acquisition market to find underrated, quality players at low prices and compete with much richer clubs like the New York Yankees, Boston Red Sox, and even the Anaheim Angels and Texas Rangers.

Beane leveled the playing field by looking to player development and, more significantly, statistical analysis, identifying the most important offensive statistic (runs scored) and then finding an underrated and oft-overlooked secondary statistic that most often correlated with it (individual players’ on-base percentage). Oakland identified and acquired players with high on-base percentage who had been underrated in a league where most people concentrated on the big three stats of batting average, home runs and runs batted in.

In the process, Beane determined a new way of buying low and selling high. What was new was how he valued them. If you hit .250, rarely walked, but hit 30 home runs, you were not as valuable to Oakland as you were to another team. But if you hit .280 with an on-base percentage approaching .400, you were far more valuable.

Soccernomics: Moneyball for soccer

Soccer has its own Moneyball teams too, and the best example may be Olympique Lyon in Ligue 1, as described in Simon Kuper’s excellent book, Soccernomics. Lyon went from a debt-ridden second-tier club in 1987, when Jean-Michel Aulas bought the club, to winning seven straight league titles from 2002 through 2008 while maintaining profitability.

Aulas used his own business model tailored to soccer, but it had the same basic premise: Buy low, and sell high. Lyon identified young players they felt they could buy at one price and later sell for a much higher price when they reached their prime, and they sold anyone if they got offered significantly more than he was worth. For example, Lyon bought Michael Essien for 11.7 million euros in 2004 and sold him just two years later for 38 million euros. Further, by taking transfer decisions out of the hands of managers and putting them into the hands of a small committee — owner, technical director and manager — of which two-thirds was fairly stable, Aulas ensured the philosophy remained consistent.

It’s basic, common business sense.

The key to Moneyball in any sport

The concept is key: What’s most important is that you identify the inefficiencies, exploit them, and profit off them by prudently buying low and selling high.

The details of how you do this matter less. All that matters is that you do it right. (In other words, MLS Moneyball may not be the same as Oakland A’s or Olympique Lyon Moneyball.)

Logically, the inefficiencies and the model to exploit them will often differ from sport to sport and business to business. It may be statistically based – maybe soccer’s equivalent of on-base percentage is passing completion rate, and maybe it’s not – or it may be driven by other factors.

In Major League Baseball’s statistics-driven world, the inefficiency was that most people overrated certain statistics and underrated others. Oakland exploited this.

In European soccer’s model of putting transfer decision-making in the hands of a manager who could be fired after five bad matches, the inefficiency was that there was too little long-term decision-making going on. It was “win now and buy big.” Lyon exploited this by thinking long-term and creating a sustainable structure.

The Moneyball model for MLS: Kansas City

No MLS club has played Moneyball as well as Sporting Kansas City (although Columbus have impressed over the last year).

The primary inefficiency Kansas City has exploited is the fact that most professional soccer clubs, outside a few top European leagues, simply do not have first class infrastructure, high standards of living or positive work environments. In Latin America, eastern Europe and southern Europe, it’s often even hard to get paid on time.

Kansas City has exploited those inefficiencies by creating a first class organization that provides an alternative to all that with the following:

  1. Fantastic work environment: SKC created a first class soccer stadium, a state-of-the-art home locker room, nutritious meals for players, and rewards for high-performing players.
  2. Positive fan environment: Free wireless Internet and high-definition TVs at the stadiums, shrewd marketing and a winning team that offers a friendly, personal face to fans.
  3. Smart sales: SKC sold players at profit, such as Kei Kamara and Uri Rosell, and have made it clear they will not obstruct their players’ ambitions overseas. Meanwhile, they shrewdly held onto the rights of some players, like Roger Espinoza, who they hoped would return.
  4. Actual scouting networks: SKC has one, which boasts regional scouts in various areas. Many MLS clubs do not.
  5. Paying their players on time. (More on this in a bit.)
  6. No fan violence. (More on this too in a bit.)

Have they always gotten it right? No, of course not. But they have transformed a nothing franchise that nearly moved to Philadelphia eight years ago into a model MLS club.

How MLS clubs can replicate Kansas City’s success

How much of this can be ported to other clubs? Almost all of it.

The biggest inefficiency in the world soccer marketplace is this:

Soccer is a horribly run business around the world, and the environment for players is in many places extraordinarily poisonous. Fan violence, team insolvency, crumbling infrastructure and corruption mar leagues throughout South America, North Africa, and eastern and southern Europe, including such big name soccer countries as Italy, Argentina and Brazil.

To exploit this, as I wrote last year, MLS clubs just have to do a few things to create a superior alternative:

  1. Offer a good work environment (stadium, practice facilities, fan atmosphere, etc.);
  2. Pay their players on time;
  3. Keep their players safe;
  4. Scout well;
  5. Identify younger players who will appreciate in value and be sold later at profit, and then sell them;
  6. Don’t overpay.

Target players stuck in problem leagues that don’t offer points 1-3, such as those in South America, central America, eastern Europe, and much of southern Europe. Meanwhile, sell players to wealthier western European leagues that will pay more.

That is the MLS version of Moneyball. Certainly, there are specific on-field statistical metrics and other nuances — many of which can be imported from Lyon — that can be used, but the basics are those six points above. It’s really that simple.

Is Philadelphia playing Moneyball?

There has been a lot of talk lately about how Philadelphia Union is trying to play Moneyball.

What needs to be clear is that, again, just because you say you’re playing Moneyball, it doesn’t mean you actually are. Being cheap is not the same thing as playing Moneyball.

Here are a few examples of Moneyball-like personnel moves from the Union:

  • Vincent Nogueira: Scalable transfer fee, sub-DP salary, top player in his prime.
  • Cristian Maidana: Reasonable transfer fee for a creative attacker, a key role that America simply does not produce enough good players for. Sub-DP salary, still in his prime.
  • Andrew Wenger: It has never been revealed whether Montreal picked up a chunk of his salary as part of his trade, but it is likely the case. Shrewd move, undervalued player who was underused in Montreal.
  • Michael Farfan: Sold to Cruz Azul at profit.
  • Any free transfer acquisition who produces at a reasonable salary.
  • Trying to sign a striker who led a top second-tier league in scoring last year before struggling to fit into a new team.

Here are a few examples of non-Moneyball moves from the Union:

  • Paying a transfer fee for a goalkeeper in a country known for producing quality goalkeepers.
  • Paying an expensive consultant to live in Europe instead of a general manager who lives in his office.
  • Valuing the younger and cheaper Amobi Okugo less than Maurice Edu, despite their on-field performances actually being fairly similar in quality.
  • Losing/eliminating your entire press relations staff* — save for a recently hired former intern.
  • Cutting your technical staff to bare bones.

Union chairman Jay Sugarman wants to play Moneyball, and he is absolutely right in this.

But there’s a difference between Moneyball and just being second-rate.