The Performance of Football Club Managers: Skill or Luck?

The Performance of Football Club Managers: Skill or Luck?

Lankaster Lecture Theatre (University College London)
Medawar Building,
Malet Place (off Torrington Place),
London WC1

Wednesday 14th March 2012 at 6pm

(For directions click here)

Given by: Tom Markham, PhD in Football Finance Candidate at the ICMA Centre, Henley Business School, University of Reading.


Motivated by the much larger literature on the identification of mutual fund manager skill, this paper proposes the adoption of a bootstrapping methodology to evaluate the performance of football club managers. The bootstrap is a technique that is highly suited to the problem at hand since the distribution of league points accumulated, and consequently of the estimated model’s residuals, are highly non-normal making inferences from more conventional parametric approaches problematic. We first use a specification that models managerial skill as a fixed effect and examines the relationship between the number of points earned in league matches and the club’s expectation, wage bill, transfer spending, and the extent to which they were hit by absent players through injuries, suspensions or unavailability. We next implement a bootstrapping approach to generate a simulated distribution of average points that could have taken place after the impact of the manager has been removed. To synopsise this simply, we analyse the success of Premier League managers over five seasons (based on league points accumulation) using the bootstrapping technique whilst taking into account a club’s spending habits and player availability. The findings suggest that there are a considerable number of highly skilled managers but also several who have significant ‘negative skill.’

The model examines managerial performance on a match by match basis. Its results divulge that seven managers remained in employment at clubs when they could have been dismissed due to substandard performance during the five season sample period between 2004/05 and 2008/09. The model can also pinpoint the exact date on which they may have been sacked. Conversely, five other managers were sacked erroneously during the same period. The exciting aspect of the model is that the approach to evaluating managers can be conducted in real time thus allowing a club to monitor its manager’s performance on a weekly basis. It is also envisaged that the methodology is transferable to other professional team sports where a manager or head coach plays an integral role.



Tom Markham

Tom is a specialist on the topic of football finance. A qualified accountant and former foreign exchange trader, he has recently collaborated on projects with national associations, clubs, agencies and sports consultancies. Tom holds an MBA in Football Industries (with distinction) from the University of Liverpool and is currently researching for a PhD in Football Finance at Henley Business School’s ICMA Centre. His recent research has focused on: the optimum time to sack a manager, the effect managerial turnover has on football club valuation and the optimal method to value a football club.

Tom has presented at the European Conference on Sport Economics, International Conference on Sports Economics, Play The Game and the Science + Football conference as well as delivering guest lectures on the subject of football finance at the University of Liverpool, Birkbeck – University of London, FIFA Master Programme and UCFB. Tom also frequently provides expert media analysis pertaining to the business of football with his contributions featuring in 11 Freunde, FC Business, The Financial Times, The Times and BBC radio.

 Contact Details

Contact details:

For further details on this seminar series contact:

Sean Hamil
Department of Management
Birkbeck College
Malet Street

Tel: 020-7631 6763

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