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The seven habits of highly effective sporting directors

In the background of Euro 2016 and the Copa América Centenario, the summer transfer season is well underway. This is the time for sporting directors and other club executives to shine, filling in gaps in their sides and unloading unwanted baggage. In NYA’s work with clubs, a number of useful strategies have come to the fore. Below is an inevitably incomplete list focused on just one part of the sporting director’s job: recruitment. These strategies may be obvious to some, but hopefully a few will be worth remembering.

1. Do your biggest business early. Being the first mover in the market sends a signal to other potential signings that the club is ready to deal and the squad is getting stronger. It also forces other clubs in the league to consider spending more – perhaps more than they had anticipated – in order to keep up.* In addition, selling clubs, agents, and players may be willing to accept a lower price in return for a “bird in the hand”. By contrast, waiting until the last minute to sign a player can result in overpayment or a breakdown of the deal that neither side wants. And of course, bringing players in earlier gives them more time to work with the coaching staff and their new teammates.

2. Look for sleeper clubs. Every season, a few teams are extraordinarily unlucky with results despite strong underlying performances, as measured by expected goals or other robust metrics. These clubs usually lose a bit of luster as targets for transfer dealings; players on a 16th-placed club may be unfairly tarred as losers, even if their play might have merited a much higher finish. With fewer bidders, these players’ prices may be unusually low.

3. Buy surplus players. This point was made in Sid Lowe’s article on Monchi, the sporting director at Sevilla. Good players sometimes end up at clubs that don’t use them. Just because they’ve been sitting on the bench doesn’t mean that they’ve lost their abilities. The same goes for players who’ve suffered injuries and have a hard time getting back into the team once they’ve recovered. One way to find these players is to look for top performers from two seasons ago who, for whatever reason, didn’t get many minutes last season.

4. Don’t sell good players to direct competitors. Here’s where things could have gone wrong for Swansea City this past season. On the edge of the relegation zone during the winter transfer window, the club sold Jonjo Shelvey to Newcastle United – another candidate for the drop. Shelvey wasn’t getting many minutes for the Swans, but he had the potential to make a difference for Newcastle. Swansea needed the money, yet selling to a team higher up in the table or, even better, in another league might have made more sense.

5. Build a diverse portfolio of youngsters. A young player is a risky investment – the younger, the riskier. The way to make these risks manageable is to diversify, with several prospects at each position. Loaning these players out allows a club to build a bigger portfolio, much as Chelsea has done in recent years. If the players don’t end up reaching the level needed for first-team football, they can often be transferred permanently to their loan destinations.

6. Create option value. Many clubs are willing to loan a player with an option to purchase him at an attractive price at the end of his stay – not surprising, given that the player is unwanted. The option is almost always a good idea for the destination club, essentially allowing it to “try before you buy” without adding much, if anything, to the cost of the loan. And if the player performs well, the price is already locked in; the selling club can’t jack it up based on the apparent increase in the player’s value.

7. Offer team-based incentives. Players and their agents may be accustomed to negotiating individual performance bonuses, but these don’t create the best incentives from the buying club’s point of view. Bonuses offered equally to the whole team create a feeling of mutual accountability that can improve commitment on the pitch. They can also be less costly than offering a few stars huge payments that eat into any additional revenue from finishing higher in the table. Moreover, team bonuses reduce financial uncertainty for the club, since team performance is usually more predictable than player performance.

* It can be argued that the best way to catch competitors flat-footed is to make marquee signings at the very end of the transfer window, when other clubs have no time to react. I would suggest, however, that it is even better to create a “leader-follower” dynamic where a series of planned, hopefully optimal decisions by one club encourages a series of unplanned, hopefully suboptimal decisions by other clubs.