In early August, before the season began I decided to share some of the discoveries I made through research for my dissertation “Can the Moneyball Philosophy be applied to The Beautiful Game’. So I contacted various journalists and many were interested. I had to condense my findings and predictions into a briefing note; The Mirror were interested but at the last minute decided it was too technical, The Guardian was equally interested but were worried that the Mirror would run with it and The Times decided that stats in football is a load of cobblers! Well here is what I wrote and here is why I have a lovely £100 put on at 12/1 for Arsenal to win the league. Issue: The discontent amongst Arsenal fans at Arsene Wenger’s transfer policy. The major problem is that fans do not understand why Wenger does what he does. Wenger bases his transfers on statistics and comparative value in the market and this has been proven by myself and professor Bill Gerrard. Taken further, it can be proved that Arsene has been using the equivalent of the Moneyball strategy in football. Using what is called “regression analysis” we can analyse, using a huge pool of data, how much a team relies on finances and how much it relies on team effectiveness (coaching and strategy). The Moneyball strategy is one whereby teams can compete with those with greater financial resources by finding comparative advantages in different forms. These are known as knowledge based and capability building advantages. There are various links that can be drawn between Wenger’s strategy and the Moneyball strategy, not only the empirical data found through regressions and mathematical formulas but also the more objective information, such as his use of tracking technology, the founder of Opta stats, his relationship with Damien Comolli, Kroenke’s motivations and Kroenke’s relationship with Billy Beane. Background “by buying assets that are undervalued by other teams and selling ones that are overvalued by other teams.’ (Tyler Cowen, 2011) 1998 – Moneyball story started with Billy Beane taking one of the lowest pay roll’s to the summit of Major League Baseball. Beane created the Moneyball philosophy by using sabermetrics (Sabermetrics is the advanced statistical analysis of players that then allows us to view their over all contribution to a win and thus enables us to quantify their value) to develop a strategy that could best be explained as the ‘systematic use of player performance data in player recruitment, player valuation, and team field tactics’. The strategy allows teams to compete with rivals using resources other than finance. 1996 – Arsene Wenger with the help of Damien Comolli who joined in 1996, began creating a system that used player performance analytics to distinguish a more objective valuation of players. Damien Comolli specializes in player recruitment through statistics and uses a team that is also the Fink Tank in the Saturday Times. Of course simple statistics can not give a true measure in football due to it’s complex nature, so a system was needed that integrated a level of human expertise with the numbers. Not so coincidentally, in 1996 Don Howe (Ex Arsenal player, coach and youth team manager in 1997) teamed up with a number of statisticians to form a company that infused his expertise with statistics to create an effective ‘weighting system’. Thus in 1996 Opta was formed. Wenger had always been interested in the quantitative, statistical side of football stemming from his economics degree and he knew the power of financial tools such as regression models. It was not until 1996 however where it all came together. Armed with an effective way of analyzing player performance, the equivalent to Sabermetrics being used by Billy Beane, Wenger was able to begin exploiting the market and excel in Resource picking and capability building advantages. The system enables the identification of undervalued players in the market, but it also enables the identification of specific qualities, specific qualities of players that would best compliment other players (chemistry) and ultimately fit into a system that could be constructed by advanced mathematics. Furthermore, Wenger realised that team chemistry, a resource un-identifiable to most and thus undervalued, can be quantified and built; my study showed that a whopping 23% of a team’s performance can be attributed to past results. i.e confidence and chemistry can be built and in turn lead to a stronger chance of winning the next game, and Wenger realised this and knew exactly how to quantify it using mathematics and regression analysis. Thus it is no coincidence that Arsenal are the only team to have gone an entire season unbeaten and always fare better in the final third of the season. The Mathematics: What is known as a hierarchical structural analysis best explains how it all works. Working back from “Points achieved” we can unravel the make up of what makes a team work, and this is what Wenger realized years ago: (1) League Points = (Goals Scored, Goals Conceded) (2) Goals Scored = Own Conversion Rate x Own Shots At Goal (3) Goals Conceded = (1 – Own Save-Shot Ratio) x Opposition Shots On Target (4) Own Shots At Goal = (Own General Play) (5) Opposition Shots On Target = (Own General Play) where general play includes number of passes, pass completion rate, crosses, dribbles, tackles won, interceptions, blocks and clearances. 1,2,3 can be improved with individual talent, in other words, financial power can improve a team here. 4&5 however require ‘team effectiveness’ to be successful and this is where a correct fusion of specific talent can create a winning formula. This is where Wenger has concentrated in the past and realized that a team with a better ‘general play’ column, ie a team that relied on team effectivness as oppose to individuals would be just as, if not more, successful than one that simply relied on marquee signings. He therefore concentrated on the ‘capability building advantages’ mentioned earlier. Proof Professor Bill Gerrard analysed the premier league over the seasons 1998 and 2002 using opta data and found a number of discoveries. 1) 1998-2002 Manchester United outspent Arsenal on wages by 25%. 2) When Arsenal won the league in 2002 they had the highest team effectiveness statistic in the league. Relying 50/50 on team and individual effectiveness. 3) Manchester United relied almost entirely on individual effectiveness 4) Manchester United purchased Veron and van Nistelrooy, Deigo Forlan and Lauren Blanc that year. The reliance on team effectiveness and the ‘general play’ column does mean that it often takes time for players to ‘gel’, there is no coincidence that Arsenal always fare better in the final third of the season than they fare in the 1st two thirds. Current Status The fact remains that finance is still necessary; Arsenal also spent 12 million pounds on Francis Jeffers that summer in an attempt to boost the ‘individual player’ statistics column. Results in football can be explained 77% by finance (This is what my study proved using regression analysis and 14 seasons of data). The philosophy was working when Arsenal’s only major financial rival was Manchester United, however now there exists Chelsea and Manchester City. The emergence of these two teams falls almost perfectly in line with Wenger’s barren spell as manager. Comparisons can be drawn with Oakland A’s, whom with all their success have never won a world series, falling short nearly every year to the New York Yankees whom have the highest pay roll in the league. Arsenal have since been taken over by Stank Kroenke a good friend of Billy Beane and business man, he sees the profitability in Wenger’s work and utilizes it for the good of his company. Kroenke does not care about finishing first, as finishing first is not ‘value for money’ where as 4th place is – champions league revenue without having to compete with top 3 spenders. Key Considerations Fenway Sports Group whom own Liverpool and Boston Red Sox attempted to sign Billy Beane as their general Manager in 2003, however he declined and they instead turned to Theo Epstein, a Yale graduate with no baseball experience. They used the Moneyball strategy but with a greater budget and won the world series for the first time in 90 years. Fenway Sports group have since taken over at Liverpool and employed Damien Comolli straight away. After Comolli they have now employed Ian Graham, ex head of the Fink Tank of the Saturday Times. (ie Comolli’s right hand man at Arsenal and Spurs). Liverpool are certainly ones to watch for future seasons. Options Due to Wenger’s comparative advantage in capability building, if he were to spend as much as the big 3 teams, they would be the best placed to win the league. It could be argued that with greater individual performers ie big money signings Arsenal would be a major contender. Like Oakland’s success then trumped by Boston Red Sox (a team able to go that extra mile in terms of finance) Arsenal should beware of being pushed out by Fenway’s Liverpool who’s system is perfectly in place to do what Wenger and Comolli did in 1996. Arsene Wenger’s ability to consistently employ these economic techniques whilst remaining in the top 4 are precisely what Kroenke wants and thus when Wenger finishes fourth he is fulfilling Kroenke’s ambitions perfectly. Conclusion Arsenal fans need not be angry at Wenger, but instead at Kroenke. As long as he is the owner Wenger will remain the manager. If Arsenal spend and increase their ‘individual effectiveness’ then they will be a title contending side. If they do spend the £40 – £70 million war chest quoted by most, I will be the first man in the bookies putting money on them to win the title.

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