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Dr Dan Parnell

FOOTBALL, SPORT, SOCIAL CHANGE, POLICY, MANAGEMENT

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Networks

Challenging football’s old boys’ network

Article was originally published on The Training Ground Guru – found here.

FOOTBALL clubs need to start using fair, transparent recruitment processes instead of relying on existing social relationships, argue Dr Dan Parnell and Dr Paul Widdop. Otherwise they risk missing out on new ideas, insights and information and holding back their businesses.


RECRUITMENT in football often seems to be based more on social relationships than on making the best rational economic decisions.

By social relationships we mean friends, family, past colleagues and historical trusted connections. Every season many football appointments are made in which there is a social relationship between the recruiter and the recruited.

Often there hasn’t been what we would consider a proper and transparent recruitment process – with a clear job description advertised, applications invited and interviews held.

These are some recent appointments in which there was a social relationship between a powerbroker and the person recruited. The recruitment process was not clear:

  • Dougie Freedman appointed Sporting Director at Crystal Palace. Was this based on a transparent process or his relationship with CEO Steve Parish? Freedman had not held this type of role before.
  • Daniel Talbot’s appointment as senior/ European Scout at Fulham. Was this based on merit or the fact his father Brian Talbot is the Assistant Head of Football Operations at the club? Talbot has no previous experience of scouting in an official capacity. [Head of Football Operations Tony Khan told TGG this was a “straightforward hire”, but the process behind it still remains unclear].
  • The double appointment of Chris Badlan, Head of European Scouting, and Kieran Scott, Head of Domestic Scouting, at Norwich. Were they the best talent identified through a clear process, or was the fact they had worked with Sporting Director Stuart Webber at Wolves before key?
  • Recruitment of Nuno Espirito Santo as manager at Wolves. What role did super agent Jorge Mendes play in the appointment?

This is not to question the merits of individuals involved – it is to question the process that led to their appointments. This approach, of surrounding yourself with trusted and like-minded people, might appear prudent, but research suggests more diverse connections can be more beneficial to football clubs.

The work of Economic Sociologist Mark Granovetter can help us explain why. Firstly, Granovetter put forward the principle of the quite contradictory idea of the strength of weak ties, arguing that connections with diverse groups of people are more beneficial than strong bonds with a few in many business scenarios.

Whilst strong bonds with people create a culture of trust and shared behaviours, it is the weak ties that bridge across a network allowing access to information or resources people may not otherwise have had access to.

Secondly, and relatedly, he put forward the notion of embeddedness, arguing that all economic action was rooted in social relationships. The Embeddedness framework has many implications for the general traditional economic view of football business, one being that the market doesn’t operate as a free market with perfect competition, and all people (buyers, sellers, recruiters etc) don’t have access to all the same information.

 

This is an excerpt of a piece of research from another prominent academic, Charles Tilly, in which you can easily substitute the word ‘society’ with the words ‘the football business’:

“It is through personal networks that society is structured and individuals integrated into society. Daily life proceeds through personal ties: workers recruit in-laws and cousins for jobs on a new construction site; parents choose their children’s paediatricians on the basis of personal recommendation; and investors get tips from their tennis partners. All through life, the facts, fictions, and arguments we hear from kin and friends are the ones that influence our actions most. Reciprocally, most people affect their society only through personal influences on those around them.”

Individuals who share strong connections to one another tend to be very similar in nature (which is termed homology). While some may argue this is important, especially for trust and shared culture, the downside is it can also create the dreaded ‘yes man’, or at least a blinkered view of the world, which may not see dangers looming or innovations happening elsewhere.

The network can become one of people who see the same things, think the same way and share the same information. If a group shares strong relationships and all the individuals are relatively similar, there will be many redundant connections regurgitating the same information, which stifles creativity and innovation.

Many leaders in football are overlooking a (perhaps better) wealth of talent that could be identified through a transparent and professional recruitment and due diligence process. Instead, they are turning to their closest network to make appointments.

To tackle this natural bias, leaders in football must develop and utilise a broader network of connections and undertake a transparent recruitment process. More diverse connections bridge networks of people and in turn introduce new ideas, insights and information that would otherwise be unknown.

Only then can football clubs be confident they’ve got the best man, or woman, for the job.

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Chelsea loan players to 87 clubs in five seasons

CHELSEA have sent players out on loan to 87 different clubs in the last five seasons, with destinations ranging from Club Universidad in Chile to the Metropolitan Police.

Vitesse Arnhem, who have had a close relationship with the Blues for several seasons now, are the leading destination, with 17 loanees going there. Next up is Middlesbrough, with six, and then Reading and Belgian Pro Division side Sint-Truidense with four each.

 

Courtesy of Dr Paul Widdop and Dr Dan Parnell

Courtesy of Dr Paul Widdop and Dr Dan Parnell

As things stand, 38 Chelsea players will be on loan at the start of the 2018/19 season. The above ‘ego network’ shows the destinations of Chelsea players during the last five seasons – starting in 2013/14 through to the upcoming season.

 

It was produced by Dr Paul Widdop of Leeds Beckett University and Dr Dan Parnell of Manchester Metropolitan University. The teams closest to the centre received the most players on loan.

 

Where do you find a Sporting Director?

Where do you find a Sporting Director?

Article originally published on The Football Collective here.

By Dr Dan Parnell and Dr Paul Widdop

Where do you find a Sporting Director in football? 

We have seen a growing media lens and attention given to the Sporting Director role in football (or Director of Football, Technical Director, Head of Football Operations as the role may also be known). Whether it’s Stuart Webber’s appointment at Norwich; Rangers pursuit for a new head of football operations; the emergence and success of Ross Wilson at Southampton; or ‘the Monchi move’ – the Sporting Director movement is gaining momentum. Whilst popular in Europe the role was often greeted with scepticism in Britain, but now it appears to be a panacea, curing all football clubs of their ills.

Our question is, where do you find a Sporting Director for your football club? We ask this because we don’t believe clubs are exploring all the available candidates, and as a result, the best talent available for such positions might be slipping through the recruitment net.

In a much cited academic paper on network connections, Economic Sociologist Mark Granovetter (1974) provided evidence that employment markets, such as finding Sporting Directors (or any kind of talent such as players for that matter), does not work as free and open competition, as laid out in neo-classical economic frameworks.

That is, any pursuit for talent depends on established ties to others; and behaviour is influenced by their social relationships.

In the case of the role of the Sporting Director, it is typically owners and CEOs that use their personal network to make contact with (i) potential employees, (ii) intermediaries and (iii) recruitment agencies.

However, within the everyday working environment of the owners and CEOs, they often rely on a network of strong ties/connections.

Why is this problematic?  Individuals who share strong ties to one another tend to be very similar in nature (the technical term for this is homophily).  Because of these strong ties, there is a significant amount of trust invested in the network and a source of what Sociologist Robert Putnam termed ‘bonding social capital’ (social networks between similar groups), which facilitates shared social norms, cooperative spirit, and trust.

Trust is important in this context in many ways, especially guarding against unethical or mischievous behaviour.  Networks of strong ties are important not least as a support mechanism.

Yet because of the nature of these strong ties, information (such as insight and recommendations on talented prospective Sporting Directors) which flows through the network tends to be often redundant as it is circulated many times. For example, if a juicy bit of gossip is being communicated through these strong ties you are likely to have been told it many times.

As such, whilst searching for a Sporting Director, a CEO or owner might overly rely on these strong ties resulting in the same information on the same names and faces, many times. Moreover, there are examples of where the same people are moving around the identical or similar roles.

In many ways one shift in the football pyramid of Sporting Directors, whether a transfer or sacking, creates an interconnected cascade effect of changes. However, it is clear from evidence we have collected, that recruitment agencies offer owners and CEOs similar names.

This is not to say that those individuals currently occupying, or who continue to be associated and forwarded for the Sporting Director role are not excellent executives or fit for purpose.  But it does mean that owners and CEOs are overlooking a (perhaps better) wealth of talent in the recruitment and due diligence process, simply as a result of being constrained by their network.

The issue of getting help to find talent

Who can blame owners and CEOs, they are working with a tinderbox marketplace, and relying on networks of trust is a rational choice, given the circumstances. They are already under significant pressure to lead a football club, without the added burden of (re)searching the football industry to find the best candidate for their club!  However, this reliance on strong ties is also how much of football operates, whether finding players, managers, sport scientists or medics.

As a result, owners and CEOs seek out recruitment agencies they trust to help find them talent. In this respect, it is fair to say, recruiters could do better.

Many in football reading this will acknowledge that key people, have the skills to do the Sporting Director role but don’t get considered. The role of acting as guardian over a football clubs sporting strategy is demanding so there is no surprise.

Moving forward: navigating the network to find the best talent

To move forward, we must return to Granovetter.  On the flip side of his research, evidence shows that it is in fact weak ties (ties to others outside the core group that reach out to other networks – see figure below), which are advantageous in economic activity, such as recruitment.

For Granovetter, these weak ties are a source of novel information and new network flows.  These weak ties can be advantageous because they bridge networks introducing new people, ideas, insight and information, that are otherwise unknown. It is these weak ties that have strategic importance.

Ties.jpg 1.jpg

What does this mean for future Sporting Director recruitment?

Placed in the context of the Sporting Director, it means owners and CEOs (and recruitment agencies) whilst continuing to utilise their strong ties, must also explore avenues away from their core connections to uncover new people and talent capable of delivering successful sporting strategies in football clubs.

Over the past few months, we have increasingly connected with leaders and influences in the football industry (including owners and CEOs) seeking to recruit the right talent, specifically for the Sporting Directors role. We found that these leaders in the football system are capitalising on weak ties to deliver new people, ideas, information and insight to inform decision-making and recruitment. This is not the status quo.

Our challenge to those involved in the recruitment of Sporting Directors, is to not abandon their strong ties, but to also capitalise on their weak ties.  To reach out to unexpected connections and to consider casting their recruitment net further to find the existing talent in the industry. Talent who possess the capabilities and who now need the opportunity to break into this often closed environment and prove their worth.

Open sesame to sports success: The guanxi of Alibaba

By Simon Chadwick, Paul Widdop and Dan Parnell – originally published here.

Jack Ma and Alibaba have forged global connections in sport. Simon Chadwick, Paul Widdop, and Daniel Parnell join the dots on a worldwide sports empire.

Ali Baba is a character from the folk tale Ali Baba and the Forty Thieves, a woodcutter who gains entry to a den of treasure using the phrase ‘open sesame’. As the tale’s title suggests, the treasure is ill-gotten, accumulated by a gang of thieves who try to kill Ali when he finds it. A willing servant strikes first though, killing the thieves and saving Ali, who then unites her in marriage with his son. What this tale might tell us about sport in the 21st century is probably best left unexplored at this point.

However, a door to the treasures of the 21st century has just opened-up for e-commerce giant Alibaba. In a deal announced at the World Economic Forum in Davos, the company was revealed as a new sponsor of the next six Olympic Games, as part of International Olympic Committee’s (IOC) global The Olympic Partner (TOP) program. As part of the deal, Alibaba will provide the IOC’s official cloud services, be its e-commerce platform services partner, and contribute to the IOC’s digital TV service aimed at young sports fans.

Whether or not company founder Jack Ma uttered the words ‘open sesame’ before meeting IOC president Thomas Bach to finalise the sponsorship remains to be seen. However, the deal marks a meteoric rise for a company that was only formed in 1999, yet which also recently signed a deal with football world governing body FIFA to sponsor the Club World Cup (via its Ali E-Auto internet car brand).

For an ambitious corporation, particularly one with global intent, such deals can be seen as part and parcel of its marketing communications activities and more general strategic development. However, unlike some other Chinese businesses, for example Wanda, sport did not play such a prominent role in Alibaba’s early development. Even so, alongside its sponsorships, the corporation set-up a sport division in late 2015, and it remains a shareholder in the Chinese Super League club Guangzhou Evergrande.

In the same way as other Chinese companies, like Fosun, are locked into a guanxi network of connections and relationships, Alibaba too is in the same position. Indeed, by virtue of its new IOC deal, ‘open sesame’ does in fact seem to be an appropriate phrase given the access to people, properties, and places that it provides. On this basis, we ran a social network analysis in the same way we have previously, which revealed the following.

Alibaba guanxi visualisation

Unlike its Chinese industrial rival Wanda, which appears to view sport as an entertainment commodity, Alibaba seems to be more focused on both its sports network and on next generation developments such as e-sports. The company’s recent deal with the IOC has opened up a whole new network of prospective relationships, which arguably warrants a further network visualisation at some point in the future. Even so, there is still plenty of interest in Alibaba’s existing network, ranging from its obvious relationship with Ali Sports, through to its links with Sina and Le Sports.

Over towards the right of the visualisation, Guangzhou Evergrande appears alongside Real Madrid and Bayern Munich. The reigning European champions Real have a long-standing relationship with the Guangdong province club, to help develop players. Alibaba is also now working with Madrid to run its online store in China, a relationship it also has with German club Bayern.

Over towards the left of the visualisation, there is an interesting array of relationships with the likes of CSM. Together with CSM, Alibaba will develop and run sports properties, which in turn will lead to the creation of mass participation events in China designed to foster the growth of grassroots and amateur sport. Given the nation’s sporting goals, this would appear to be an astute acquisition given CSM’s work with the clients such as US Club Soccer. The latter has 500,000+ members, from which Alibaba may be able to learn a great deal which is of relevance for soccer in China.

It is, however, the centre of the visualisation to which one’s attention is drawn, with Alisports and Le Sports clearly being important nodes in the overall network. Two years ago, the network would have looked very different, as Alisports and Le Sports were not actually formed until 2015 and 2014 respectively. Yet very quickly, through massive inward investments and ambitious external growth strategies, both companies have rapidly ascended to become important members of the domestic Chinese and global sports landscapes.

In 2015, Alisports’ website was a hollow shell that left one asking ‘what does it do and where is the business going to come from?’ A naïve question perhaps, as the company has rapidly become active in boxing, basketball, American football and more. Interestingly, while some of its Chinese industrial counterparts have become embroiled in a headlong dash to acquire soccer properties, Alisports appears to have gone in a different direction, contributing to China’s broader sporting goals.

No less intriguing, though apparently very different from its connections with Alisports, is Alibaba’s relationship with Le Sports. As the visualisation shows, this brings the company into direct contact with Wanda, which was set-up and is owned by Jack Ma’s Chinese corporate rival Wang Jianlin. Unsubstantiated rumours have circulated that the two of them have a somewhat fractious relationship; whether or not this is true, Ma and Wang have routinely traded places over recent years as China’s richest man.

The connection of China’s two mightiest corporations came about in early 2016 when both of their founders helped pump US$1.23 billion into Le Sports – Wang through Wanda, and Ma via his Yunfeng Capital investment vehicle. This has enabled the two to further build their own networks, as Le Sports has a diverse array of established relationships with the likes of the United States’ National Basketball Association (for which Le Sports serves as NBA China’s official smart TV and over-the-top broadcast partner) and boxer Manny Pacquiao (who will work with the company to open 400 Pacquiao-branded boxing clubs in China).

‘Open sesame’ indeed: the connectedness of Chinese sport and its embeddedness in the principles of guanxi never ceases to amaze. Alibaba’s IOC deal marks yet another marriage in the development of his corporation’s sports portfolio. There is treasure in the sports network, and Jack Ma knows it.

A feast for wolves China’s richest man is hunting the global sports and entertainment industry

By Simon Chadwick, Paul Widdop and Dan Parnell – originally published here.

From football to movies to Indian cricket, Wang Jianlin’s Wanda Corporation is leading a pack of business interests with the aim of building an entertainment empire stretching from China to Hollywood, Simon Chadwick, Paul Widdop and Dan Parnell write.

Wang Jianlin is China’s richest man, his fortune derived from his ownership of the Wanda Corporation. Wang set up the company in 1988, originally to deal in real estate. Through a process of conglomeration, the business is now also active across the hospitality, retailing, tourism, entertainment and sport industries.

This has enabled Wang to accumulate a personal fortune worth more than US$30 billion, and to build a company currently generating upwards of US$40 billion each year. This is a long way from his origins; Wang started out as a member of the People’s Liberation Army, later becoming an administrator in a local government office in the city of Dalian.

wanda-guanxi-diagram-768x570

Crucially, Dalian had its own football club, which was initially called Dalian Shipyards and later became Dalian FC (when it was taken over by the local government). In 1993, Wang acquired the club, renaming it Dalian Wanda. By the late 1990s, the football club had been sold again, although by this time Wang had already set about creating what has arguably now become the most influential business in world football.

Most people from outside China probably first became aware of Wang in early 2015, when Wanda purchased a 20 per cent stake in Atletico Madrid. At the time, the Chinese businessman talked of his intention to build a global entertainment business that would stretch from China to Hollywood. As the network visualisation below shows, Wang is following through on his intentions.

wanda-guanxi-diagram

We have followed the same procedure here as we did when creating our previous visualisation for Fosun. The outcome of this exercise reveals a network that at one level is very simple: Wanda is heavily invested into activities that can be broadly categorised as ‘cultural industries’. At another level, the network is so complex and diverse that it shows how influential Wang and Wanda have become.

Just like our Fosun analysis, the Wanda network visualisation further demonstrates the importance of guanxi – broadly defined as networks, relationships and connections – in Chinese business. In this network, the right of the diagram depicts an array of predominantly Chinese relationships that underpin Wang’s vision of a global entertainment axis. Whether it is Disney in particular or Hollywood in general, Wanda is already challenging global entertainment’s existing order. Indeed, the ebullient Chinese businessman hasrecently said of Disney that “one tiger is no match for [my] pack of wolves.”

Equally important in Wanda’s network, however, is the role played by both Atlético Madrid and Infront Sports and Media (ISM). Purchasing Atlético cost the Chinese conglomerate US$52 million, and the company has also recently agreed to take-up a naming rights deal on the Madrid club’s new stadium. In recent years, Atlético have been through something of a renaissance, twice reaching the UEFA Champions League Final. Yet the broader network in which Atlético is embedded is possibly more important to Wang’s long-term strategy of building his entertainment empire via sport.

Atlético Madrid are co-owners of Indian Super League football club Atlético de Kolkata. Together, the latter’s group of co-owners is called Kalkata Games and Sports Pvt Limited. The group consists of former India cricket captain Sourav Ganguly, businessmen Harshavardhan Neotia, Sanjiv Goenka, and Utsav Parekh, as well as Atlético Madrid itself.

Many people will recall Ganguly as being one of India’s best ever cricketers as well as one of its most notable national team captains. However, he is now a member of Indian Premier League (IPL) cricket’s governing council as well as being president of the Cricket Association of Bengal. It is worth noting too that Ganguly’s fellow Kolkata group member, Sanjiv Goenka, is also owner of the IPL’s newest team – Rising Pune Supergiants.

IPL cricket is a phenomenon, capturing the attention (and the wallets) of sports fans in one of the world’s most populous nations. Television viewing figures for a round of IPL games are heading towards two hundred million, reinforcing cricket’s position as one of India’s leading forms of entertainment (alongside Bollywood films). And through its investments, partners and connections, Wanda is therefore invested into one of 21st-century sport’s biggest commercial properties.

Wanda paid US$1.2 billion for ISM in February 2015; the Swiss-based sports marketing company manages the marketing and media rights of several of the world’s leading sports organisations. One of ISM’s biggest clients is FIFA, specifically the World Cup, for which it produces television content. This is helpful to Wanda, given its entertainment ambitions, and to the Chinese government and its vision for football. Wanda also serves as a World Cup sponsor, which gives the conglomerate unprecedented access to FIFA’s top decision-makers. This is helpful for a nation intent on one day hosting world football’s biggest tournament.

With the 2022 Winter Olympics due to be held in Beijing, and with China intent onbuilding a winter sport economy, it is helpful too that ISM also represents all seven Olympic winter sport federations, and manages media rights for the International Ski Federation’s World Cup events. This part of Wanda’s network of influence intensifies even further, as China Media Capital (CMC) and Shanghai Media Group (SMG) also have stakes in ISM. This links Wanda into the Abu Dhabi United Group, the China International Trust and Investment Corporation (CITIC), and the City Football Group (which owns a 13 per cent stake in Manchester City).

Beyond these important nodes in Wanda’s network lies a multitude of further, intriguing relationships. For example, there are links to controversial businessman Li Ruigang, who was president of SMG until 2011, a position he now holds at CMC. In another case, Wanda’s ownership of the AMC cinema chain extends the company’s network into the National Basketball Association (NBA) through an AMC board member who co-owns the Philadelphia 76ers.

If, as Wang has stated, his businesses are wolves, then he is without doubt leader of the pack. Indeed, as a voracious hunter who has accumulated massive corporate influence through his knowledge and understanding of guanxi, it seems likely that Wanda will not stop at hunting down Disney. Several of global sport’s leading properties, as well as some of Hollywood’s biggest assets (like Dick Clark Productions, which runs the Golden Globes) have already been gobbled-up. Expect the feast to continue for the foreseeable future.

A networked view of the international mobility of minors in football

Originally published on The Football Collective here.

By Alex Bond, Paul Widdop and Dan Parnell

The recent CIES Football Observatory Monthly Report investigated the international mobility of minors in football. The findings suggest a trading or mobility network of under 18yr old male athletes. However, they do not necessarily interrogate and unpick this network, which might show how it is structured globally and locally. This short blog post aims to extend their findings and explore the structure of the trade network regarding minors within football. Indeed, there are many ethical, moral, economic and, of course, legal debates to be had on the matter (the latter two can be read further in FIFA’s regulations on the transfer of players and KEA’s and CDES’ report).

There is a long history of academic research focussing on the labour market within professional association football – especially in Europe. Walters and Rossi (2009) edited series of research papers investigating the issues and challenges of Labour Market Migration in European Football – focusing on concepts such as, muscle drain, feet drain and feet exchange. On top of this, Frick (2007) empirically inspected the major European leagues’ labour market. Other research has focussed on Africa’s role within the European labour market, such as – Poli (2007) who provides specific insight into Africa’s status in the European Football Labour Market; and Darby (2000; 2007) who looks at African football labour migration to Europe and African labour migration to Portugal respectively. More recently, Bullough, Moore & Goldsmith (2016) examined UEFA’s home-grown rule and player’s migration and opportunity, and Rossi, Semens & Brocard (2016) book which explored the role of sport agents within football’s labour market. Other useful books on the topic, consist of Maguire’s (2010) Sport and Migration: Borders, Boundaries and Crossings, Elliot & Harris’ (2014) Football and Migration: Perspectives, Places, Players and Tiesler & Coelho (2008) Globalised Football: Nations and Migration, the City and the Dream.

The recent CIES Football Observatory Monthly Report highlights a very controversial issue within the European Football Labour Market – namely the migration of minors. Of course, this raises moral and ethical implications, that will stir a range of opinions. Darragh McGee seems to be at the forefront of minor migration within sport, so readers are directed to his 2012 book Displacing Childhood: labour exploitation and child trafficking in sport, or his conversation article last year What the next FIFA president could do to tackle child trafficking in football. Additionally readers may find Brackenridge et al. (2013) Child Exploitation and the FIFA World Cup: A review of risks and protective interventions useful. Nevertheless, the purpose of this blog post is to further interrogate the network of minor migration presented by CIES, without providing judgement on the topic or its implications.

The CIES report that within the top 5 major European leagues (Premier League, Liga, Ligue 1, Bundesliga and Serie A), the percentage of players migrating increased from 24.1% to 55.2% from 2009 to 2015. Additionally, over the same period the average age dropped from 23.2 to 21.1 respectively, which is attributed to the increase in minor migration figures, which in 1995 was 51 and in 2015 was 184, most of which the final destination was England. The report goes further to include a section on the ‘Networks’, and provides useful information regarding the relational direction, and flow of minor’s migration in football. Within this section they include information on minor’s migration across Europe in October 2016, but they don’t locate the work in a social network analysis framework, so therefore cannot show how the network is configured. Here we use the information in the report and place it with an SNA. The below figure shows the data held in the report in network form.

networks

This is a small-scale network based on the information provided in the CIES report, relating to the movement of minors as of October 2016. So whilst it offers an insight into the migration flow, it doesn’t explain net migration and is only a snapshot in time.

Obviously, much of this network could have been deducted through Figure 7 in the CIES report. Including that England is the clear end destination. But SNA allows us to look a bit more critically at the structure.  In network terms England has the highest in-degree and betweeness values within the network – which is a characteristic of a star topology seen here – suggesting that the England node (represented as a circle) has the most connections going into it or in this case, the majority of minor migrants from other countries migrating to England. However, England has the smallest (or none to be exact) out-degree, meaning no minor football players migrate abroad. It is Belgium who has the largest out-degree value, as they have the largest number of minors migrating, primarily to The Netherlands, and secondarily France and England. Again, deductible from the report.

What is not so deductible from the report is the structure of the network, so if we look a little closer, and apply K-core (clique of countries) (this establishes a core of nodes, or countries in this case, which are interlinked – this is a relaxed clique in that not every country (node) in the core is linked symmetrically), we find a number of countries (nodes) which were fundamental to the international transfer of minors across Europe as of October 2016. Therefore, we can depict that England, Belgium, The Netherlands, France, Germany and the Republic of Ireland, are all embedded to the mobility of minor footballers within Europe. Thus, research is needed to track this network historically, and continuously to investigate net-migration of players over time – and account for the impact of huge political changes across Europe, such a Brexit and the right populist movement. Considering the centralised structure of the network, then political shifts affecting the (K-)core, such as Brexit, could have detrimental implications on the network robustness. Finally, research of this nature could aid policy decisions, by providing evidence of whether we need tighter interventions to control the movement of minors within football across Europe.

The guanxi of football

From British railways to Hollywood A-listers, a world of connections lies beneath Chinese football investments

Originally published in the Asia & the Pacific Policy Society Post here and the South China Morning Post here.
SIMON CHADWICK, PAUL WIDDOP & DANIEL PARNELL

The purchase of a second-tier English football club by a Chinese conglomerate provides a window into a business culture of relationships and reciprocity, Simon Chadwick, Paul Widdop and Dan Parnell write.

When Chinese conglomerate Fosun International Limited acquired English second-tier football club Wolverhampton Wanderers (commonly referred to as Wolves), many of the club’s fans anticipated a cash windfall and some high profile player signings. Neither happened; indeed, the team’s performances were so unsatisfactory early on in the season that the team’s manager was sacked.

Fosun were clearly unhappy, as languishing in the lower reaches of second-tier English football neither cast the company in a positive light nor added significant value to China’s current football revolution. Even so, Fosun is unlikely to see its first foray into European club ownership as a disaster.

Football alone was never likely to be the only reason why Fosun bought Wolves. As a conglomerate, this might seem an obvious thing to say, as this type of organisation owns multiple businesses across a number of often-unrelated industrial sectors. At one level, Wolves could be just another investment in a broad portfolio of Fosun properties.

However, at another level, acquiring assets in football brings a much broader range of potential benefits. Fosun owns a 20 per cent stake in Gestifute, football super-agent Jorge Mendes’ player representation agency. Together, Gestifute and Wolverhampton have opened up a network to Fosun that is ultimately intended to be of much greater value to the company.

Networks in Chinese culture are so fundamental to doing business that China even has a name for it: guanxi. The literal translation of guanxi is often difficult to pin down but is sometimes defined simply as ‘relationships and connections’. Guanxi is rather more profound than Westerners might imagine, based upon their own notion of ‘connections’. It is a form of reciprocation – what Westerners may call ‘a favour for a favour’. That is, Chinese business people will often give something to someone in return for, at a later date, being able to ask that person to give something back or to exert influence on their behalf.

This is intended to enable Chinese businesses to create connections, relationships, and networks that help them bypass normal governance systems or conventional business practices. An important aspect of this is the social ties between individuals, which are intended to provide direct or exclusive access to insider information, business contracts or scarce resources.

In this context, it seems that Fosun’s acquisition of Wolverhampton Wanderers is a classic case of guanxi. Owning a successful football club in itself is good guanxi; with President Xi and senior members of his government having committed to a Chinese sports revolution, being part of the global football network makes good sense for Fosun.

Yet even if Wanderers do little more than play out the coming seasons in mid-table mediocrity, Fosun may not be too concerned. After all, guanxi dictates that there’s more to the Wolves deal than meets the eye. Indeed, having undertaken a social network analysis (which was derived from media sources) of Wolves and its new owner Fosun, it appears that the club is simply a hub in a much more significant collection of relationships and connections.

The diagram below gives some idea of what this network looks like:

widdop

Wolverhampton Wanderers’ owner Fosun is owned by Chinese billionaire Guo Guangchang. Guo is widely acknowledged as being one of China’s richest men, with a net worth of around US$5.9 billion. Guo has built a corporation with interests in everything from mining to pharmaceuticals to real estate. In many ways this is Guo’s guanxi, his network extending way beyond second-tier English football.
More significantly, in football terms, Fosun also set-up Foyo Culture and Entertainment Co Ltd. It is this company which in turn owns a minority stake in Mendes’ Gestifute. This provides agency services to football players through a subsidiary company, Polaris Sports. Among Polaris’ clients are Real Madrid players Cristiano Ronaldo and James Rodriguez. Polaris also works with current Manchester United manager Jose Mourinho, who has long-standing links with Jorge Mendes (his agent for many years).
Together, Gestifute and Polaris partner with American company CAA Sport (a global sports and entertainment agency), which has numerous clients across football including FC Barcelona and Chelsea. The agency is itself part of a larger company – CAA (Creative Artists Agency), which represents a number of Hollywood ‘A-List’ celebrities. Tom Cruise and Brad Pitt are two of CAA’s clients.
Cruise and Pitt may not appear to have too much in common with a post-industrial town in the middle of England, and are unlikely to be turning out on a Saturday afternoon in Wolves’ famed gold kit, yet our map of Wanderers’ guanxi network shows there is a road that stretches from Hollywood to Wolverhampton. This begs the questions: why, and what is the return on investment for Fosun?
In recent years, the Chinese conglomerate has diversified into films and television, via its production company Fosun Pictures. The network connections to Cruise/Pitt/CAA therefore make a lot of sense, especially if one looks ahead to a Fosun-produced Hollywood blockbuster at some stage in the future.
This still seems a long way, though, from Wolverhampton. However, the town’s location in England’s West Midlands conurbation (home to Birmingham – England’s ‘second city’) may hold some clues. Rumours are currently circulating that British terrestrial television broadcaster Channel 4 is about to relocate from London, with Birmingham thought to be its favoured location. It is also rumoured the move may be part of the development of a much bigger media and entertainment complex in the city.
A corporation like Fosun, already investing heavily into the sector, would therefore appear to be ideally placed to bid for contracts that might emerge out of such a development. At the same time, there are major plans for Britain’s HS2 rail link to pass through the West Midlands, which would generate further business opportunities. Fosun recently became the first private Chinese company to own a bigger stake (US$ 6.9 billion) than the government in a high-speed railway project. The company is therefore ideally placed to bid for HS2 work.
And this is how guanxi works: when Fosun bought Wolves, the conglomerate was not simply just buying a football club. It was buying into a network of relationships and connections that Guo no doubt knew would have much broader, deeper and financially lucrative implications for the conglomerate. While it seems unlikely that Brad Pitt will become a regular spectator at Wolves’ home games, the fact he forms part of the club’s wider network reveals a great deal about both guanxi and how Chinese business works.

The ‘Networked’ rise and power of the Football Super-Agent

By Dr Paul Widdop, Dr Dan Parnell & Tony Asghar

 

This summer, even for the hedonistic consumption of the Premier League, was unprecedented. Spending topped one billion pounds, with Manchester United breaking the World transfer record, in the region of £95million for Frenchman Paul Pogba.  Many within the football world were left dismayed that United payed so much for the Juventus player who the left the club for nothing in 2012. More disheartening for fans is the reputed 30% or if we conservatively round this down, the £20million fee super-agent Mino Raiola will collect.

Whilst football agents, the games infamous middle men, have been around since the early 1960’s , the term super-agent is only a recent arrival into the lexicon of association football. As money has flowed into the game, a powerful few have amassed enough resources to move from mere Agents to the grander media christened term ‘Super-Agents’.  Empirically of course it is difficult to typologise super-agents given the somewhat blurred boundaries, but we are told they are the most powerful men in football, not mangers, players, leaders of the games governing bodies, but agents.

However, what are we to make of super-agents and their networked world. Are they to be demonised as neo-liberal capitalists, fuelled by finance and commerce at odds with the cultural meaning of football as social institutions, or do they play a pivotal role in the production process, using there connected worlds to produce a global game.

It is somewhat easy to place all footballs ills at the doorstep of these business men. As Tony Asghar Managing Director of Revolution Global Sports Consulting Ltd and Masters in Sport Directorship student notes:

It is clear that the media and public perception of the role of the football agent has been dramatised as “the root of all evil” the people who “take money out the game” and “only think about themselves” , however on looking behind the curtain the role of the agent who represents a club in the transfer of player (buying or selling) or represents the player in negotiating an employment contract are necessities not only in football but in global commerce.

In this article, using a Social Network Analysis (SNA) we critically explore the networked rise of super-agents and how these structures give them power, resources and a means to restrict and skew the market. In doing so, we aim to provide both academic and industry insight.

 

The rise and role of the Super-Agent?

How did we get to this situation, where a powerful few have engineered a market-trading environment that not only facilitates a specific role for itself (agents), but one which would not function without them given their centrality to this market.  We consider that the rise in super-agent is fundamentally a network phenomenon.

We are interested here in whether this network takes away or restricts rational choice and constrains the trading market conditions, and ultimately whether this is positive or negative. Whilst it is difficult to define super-agents, it has been noted that a few represent the many, which has given rise to more networked with better connections than others (Poli, 2016). For Tony Asghar:

 “…the term Super-Agent has been tagged for a small number of agents (businessmen) who have created a business model which is clever and effective and is beneficial to the clubs who are working with them.”

However, it is clear that through their networks, super-agents have taken power from others and have created more for themselves. Perhaps the embodiment and archetypal manifestation of this is Portuguese businessman Jorge Mendes and his GestiFute networked empire.

Before exploring the networked nature of the GetisFute empire and its implications for global football, it is important to put the market and the agents role into context.

What is the role of an Agent

Agents can be described as those with the role of representing both clubs and players within the context of contracts or transfer negotiations, dealing with players image rights and carry out recruitment activities such as scouting (Poli, 2016). However, the actual role of agent (and intermediaries) has blurred boundaries. Fundamentally they are middlemen yet their role is increasing taking over responsibilities that were traditionally undertaken by the club. As Asghar notes:

“…representing the player in a contract negotiation requires payment whether it is a registered intermediary or a lawyer, whilst the credibility of a lawyer is not in question in most part (mostly due to the time spent educating themselves).

The role of an intermediary negotiating raises suspicion of lining their pockets. Intermediaries who are credible and have experience should only be looking for the best deal for their client and if this is matched by the club then the player is paid and the club may pay the agent fees on behalf of the player.

This is no different to any representation in entertainment, Media or other industry.”

Asghar believes the public scrutinise the role of agents for the most part because they don’t know exactly what they are being paid for:

“…most people agree that no person should sign a contract of any kind without seeking advice. Football players are no different. Perhaps the experience of an agent (who knows the market rate of salaries, knows how to structure a deal, knows the valuation of the player…) can be a lot more advantageous than an educated lawyer who may not have that experience.”

Asghar is also keen to raise awareness of all agents, not just those at the top of the pile:

“It is also important to note, that at present the public perception of agents who are making millions at the highest level of transfers does not alleviate for the majority of agents. Especially those moving players who are (i) free of contract (out of a job), (ii) not playing within a team, (iii) fell out with a manager and/or other reasons whereby time and effort are carried out (without payment) and not highlighted within the media.”

Jorge Mendes – a man at the top of the pile

Despite the significant numbers registered as agents, the market especially in the big European leagues follows somewhat of a power law distribution, i.e., more players are registered with a fewer number of agents. These agents gain further power and control becoming super-agents. We turn now to GestiFute and Jorge Mendes.

The rise in super-agents we believe is a network manifestation. The GestiFute networked business empire is illustrated below, it is an ego-net of Jorge Mendes.  To put this graph (network map) into context, the circles (nodes) represent football clubs and the line linking the two (an edge) represents a transfer between clubs (the players that Mendes represents).

The circle size is weighted on a measure of how often a circle falls along the shortest path connecting two other circle (football clubs), such that they might ‘broker’ between these parties (i.e., betweeness centrality). The lines (or transfers) are sized by number (or sum) of transactions between two clubs/circles. That means, the more transfers between the same clubs the greater the size of line.

sec-session-1

What does this tell us?

This is a basic sociogram and helps to understand the complex network structure that exists. The network of Mendes is complex. However, we identify six points to consider in this brief insight into this ego-trade network of a super-agent (up until June 2016).

  1. This is a truly global network covering approximately 88 football clubs across 15 countries, involved in 500+ transfers. Portugal still remains the heartbeat of the organisation, but Spain is becoming important in this network.
  2. Examination of the graph metrics show that there are relatively short lines linking a few football clubs. This perhaps makes trading patterns more predictable.
  3. The three giants of Portugese football, FC Porto, Benfica, and Sporting Lisbon are the most central in the network and the powerbase of the organisation. Interestingly, there is relatively very little trade directly between these three, indirectly this is different. That is, players don’t move from FC Porto to Benfica to Sporting Lisbon, and so forth.
  4. Smaller provincial football clubs play key brokering roles in this network. For example smaller clubs in Portugal, for example Maritimo and Rio Ave FC. It appears that almost serve to be used as a trading hub, whether older players getting one last transfer, or a test bed for two years of a young star before being traded off in the football circus. This will be possibly at odds with the traditions and beliefs of the supporters.
  5. This clearly demonstrates the network nature of this industry and gives initial insight into how these agents have become all-powerful.
  6. Finally, whilst it is interesting to see the football clubs that are part of the Jorge Mendes network it is also interesting to note those that are not. Leading us to raise further questions. What impact does this have on them when they are trading? Is the market restricted for these organisations? What about the economics of rational choice? Perhaps a better way to understand this market is transactionally or relationally – through the lens of relational sociology.

 

From an Agents perspective

From his deep knowledge of the industry, and understanding of the conventions and trading conditions of the market, Tony Asghar has somewhat of an alternative understanding of the network.

For Asghar:

“Jorge Mendes has created a network of players, clubs and managers with whom he has gained trust and respect as to being the man who can produce the best players for their clubs.

Mendes is a corporate head-hunter or talent finder who is no different to a Head-hunter is Silicon Valley or Hollywood as the “go to guy” to get the deals done.

There are other similar models by other agents working with a group of clubs and managers at lower level which again is bred by trust and ability rather than open a free market network to the ever increasing intermediaries after the de-regulation of FIFA agent regulations in 2015.”

Indeed, Asghar highlights that agents have an important contribution to the game:

“The issue of owning third party rights of players also comes into the world of the so-called super-agent, and although this is prohibited in the UK, FIFA and UEFA have still not regulated this type of transfer and Mendes and others have offered the service by purchasing a percentage of the player to allow the buying club to invest a more reasonable sum.

Like the banks and financial institutions used to provide loans for these fees, the super-agents are able to assist because they have the funds and more importantly have the experience and know the market and can make a calculated risk on their investment when moving a player say from South America to Europe and knowing he may accumulate club and international appearances and then be ripe for selling on to EPL or other top league for profit.

Therefore the commodities that players are becoming in the eyes of clubs and club owners are major financial investments and yes for every Pogba deal there will be a Falcao, some will work some will not.

The super-agent is becoming powerful but they are also becoming a necessity to the oligarch owners to make financial investment decisions on players, however managers will always have the say on players in order to create a winning team, and rightly so and in my experience most top level managers will not be swayed or overruled by a super-agent (if the player is not right for him), that will never happen.

Super-agents will be an exclusive and small band of football/business/relationship/social experts and even an agent who finds, nurtures a client that gets catapulted into super stardom then the super-agents are waiting to strike and offer that player into their exclusive club and why would the boys original agent say no, if he is getting a seat in the super-agents room, if only for a short time and not on the hard seats at the back of the room.”

The future

Clearly the network here only relates to Jorge Mendes and the players he represents. Therefore, this is not a clear portrayal of how the market is structured. Yet this does offers an insight into the networked characteristics of trading between clubs that warrants further investigation and critical thought.

This throws open questions of rational choice and utility models. In that clubs in the network, might be restricted by who they can trade with and for whom, whilst those clubs outside the network have barriers to entry into the market, given that this is an example of one of many super-agents in the market place.

What does this mean for smaller clubs? Are they destined to become small brokers or feeder clubs to the game’s elite? Will their players trading at the behest of external powers, or super-agents? It appears that power is ultimately being taken away from them as a single entity. They are at the behest of neoliberal forces that have significant access to resources and therefore power.

In a further development straight out of a text book example of Michael Porters five forces, the Fosun group who have a minority stake in GetisFute and heavily connected to Jorge Mendes  have entered into a new market and purchased a Football Club, it will be fascinating to view events unfolding at Wolverhampton Wanders founded in 1877. Indeed, it will be fascinating to see how Mendes and the Fosun group use Wolves to for their commercial gain.

At present elite level professional football continues to develop and extend its commercial power, whether in the English Premier League or in emerging football markets within the Global South. As such, we should expect the role of the super-agent to become more prominent as they grow their network and most certainly in their power to influence player transfers in football.

Perhaps the final word should be that of Asghars:

“The market is such that to have your club bring the biggest and best players, they need to call on the most expensive people and experts to provide the service. The culmination of transfer fees this window has exceeded 1bn and is excessive, however the market is dictating this and I don’t see it slowing down in the near future. A slow for deals at the top end or a slow for discretionary support at the bottom end”.

To contact the authors email: Dr Paul Widdop: p.widdop@leedsbeckett.ac.uk

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