Sunday, March 17, 2024

Coaches in my course on soccer and economics

What is the role of coaches in soccer and what analogies can be established with economics? That is the subject of an interesting literature that is summarized by Peeters and Van Ours in their contribution to an IEB Report that I recently coordinated.

Sarina Wiegman, Jurgen Klopp and Pep Guardiola play the role of intermediate principals in a three-tier agency structure, similarly to referees. Upper principals are club or governing body officials, and agents are players. A problem they may have is that some agents may be more powerful than coaches. This weakness may be related to the extreme quick turnover of head coaches in soccer leagues. A graph for The Economist with data in 2016 showed that the median time in the job for a head coach (manager) in the English Premier League was less than one year. From coordination games (as for example in David Sumter's "Soccermatics"), we know that coaches could play an important motivational role to promote trust and team spirit, like Al Pacino in the movie "Any Given Sunday" in American Football. From empirical work in other branches of economics (like from Bloom and Van Reenen), we know that managerial practices are an important determinant of productivity differences among firms that produce similar goods. 

Intermediate executives can contribute to preventing organizational failure by allocating talent and wisely splitting resources between the short-run and the long-run. But it's not easy to see the impact of coaches in soccer data. In the book "Soccernomics," Kuper and Szymanski are very skeptical that coaches play any significant role (they quote Arrigo Sacchi criticizing some former players becoming coaches: "good horses do not make good jockeys"). Although they have to decide on a complex vector of multidimensional tasks, player talent seems to be much more important, and soccer coaches intervene less during the game than, say, basketball coaches. That irrelevance is confirmed by most empirical work on managerial dismissals mid-season, if those coaches that are fired are compared to coaches that experience a similarly bad streak but do not get fired. The teams of both types of coaches experience a rebound, but it is so similar that most probably it is because of regression to the mean. 

Peeters and Van Ours reach a similar conclusion in their contribution to the IEB Report when they compare the dismissal of Ronald Koeman in FC Barcelona with the non-dismissal of Valverde two coaches before. However, very recent research (which I found in Palacios-Huerta's article "The Beautiful Dataset") shows that distinguishing (imperfectly, using the notion of expected goals) merit from luck, wise dismissals really have a positive impact on performance, even after comparing with a control group of similar coaches that are not fired. It is just that there are not many wise dismissals. Peeters and Szymanski also have an article where they show that one of the reasons of the mediocrity of most managers, is that clubs are reluctant to hire new coaches with high potential due to credit constraints (new coaches may be better on average, but it is risky to hire one), and due to the fact that if they turn out to be good, they will be poached by better teams. Peeters and Van Ours argue that nevertheless, a few coaches may have as much as one goal difference impact on performance. Good coaches seem to exist, but they are rare. Perhaps artificial intelligence and big data will democratize the profession, but we are probably at a primitive stage on this.

Appointing the right coach in very popular clubs is as much a political decision as it is a business decision. That's why probably FC Barcelona tends to appoint famous former players that contributed to the past glories of the team (Guardiola, Luis Enrique, Koeman, Xavi), some of which are better as coaches than others. In general most former famous coaches do not have a good track record as managers (Guardiola is an exception: think of Rooney or Maradona), but clubs keep valuing player experience. When this experience is rich enough and is combined with a smart individual, then perhaps we have part of the secret to relevant impact (Xabi Alonso?). What surely empirical evidence shows is that coaches contribute to spreading successful tactical styles through networks of influence and evolution, as we've seen in the past with Dutch and Italian coaches and today with Spanish coaches. This season, the favourites to the English, French and German leagues are Spanish coaches. 

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