Superstardom in the Professional Football Industry

‘an exploratory, qualitative study’

Universty of Groningen, Master of Business Administration Faculty of Management and Organization “Strategy & Innovation”

Dierenriemstraat 100 July 2006 Postbus 800 9700 AV Groningen Supervisors: Student: Dr. T.J.B.M. Postma R. Woestenenk, Dr. G. Gemser s 1231006 S Superstardom in the Football Industry & I -Preface-

Preface

This thesis is also the subject of many discussions between football experts ranging from a select number of professional football analysts to millions of people who follow the most popular sport in the world.

I would like to seize this opportunity to thank the many people who helped me to write this thesis. First of all I would like to thank my supervisors at the University of Groningen, Dr. Postma and Dr. Gemser, for the inspiring discussions and feedback. Secondly, I would like to thank the people who found the time to discuss my research: Professor Ruud Koning (University of Groningen), Bert Schaap and Valentijn Driessen (Telegraaf), Kees Ploegsma jr. (Kees Ploegsma Management B.V.), Alex Kroes (MT&V Sports International), Hans Nijland (FC Groningen) Joris van Benthem (Feyenoord Rotterdam) and Jan de Visser (SP International). Thanks to their efforts and input I was able to obtain and present an empirical insight on the phenomenon of superstardom. Finally, I would like to thank my family and friends who joined in discussions and supported me during the writing process.

I hope you will enjoy reading this thesis on the professional football industry and its key inhabitants: the superstar football players!

René Woestenenk

Groningen, July 2006

R. Woestenenk, s. 1231006 p. i S Superstardom in the Football Industry & I -Abstract-

Abstract

The purpose of this thesis is to construct and empirically underpin an exploratory conceptual model that comprises the plausible factors that lead individual players to superstardom within the selection system of professional football. The theories on selection system, value creation and value capture as well as the concepts of superstar effects and winner-take-all markets form the fundaments of this thesis. The empirical, qualitative research consisted of a number of explorative semi-structured interviews with representatives of football clubs, football players’ agencies and with independent sports experts.

The main conclusion of this thesis is that it is very difficult to pinpoint one or two factors or aspects that lead football players to superstardom. The most important factor appears to be a player’s tacit knowledge, represented by the talent to play football coupled with the right personal traits. Players that can perform decisively in a consistent manner are valued highly. Furthermore, the importance of commercial activities of individual players is emphasized in this thesis; when a player improved his reputation he can become an invaluable promotional / commercial medium for expert selectors like sponsors and advertisers.

The most important addition this thesis makes to the current theory on superstardom is the role of bargaining. The amount of value captured by an individual football player depends on a bargaining process, not on the amount of value created. Moreover, the valuing criteria of the two types of employers, i.e. the football club and the expert selectors, appear to differ. The first mostly values a player’s on-pitch-performance, whereas the latter appears to value his reputation more. The final conceptual model that concludes the empirical research can be used as a starting point for future, explanatory research.

Key words: Selection system - sports economics - experience products - value creation - value capture - superstars - football

R. Woestenenk, s. 1231006 p. ii S Superstardom in the Football Industry & I -Table of Contents-

Table of Contents

INTRODUCTION...... 1

RESEARCH OBJECTIVE AND RESEARCH QUESTIONS ...... 1 OVERVIEW ...... 2 1. THEORETICAL BACKGROUND...... 4

1.1. INTRODUCTION ...... 5 1.2. SELECTION SYSTEMS ...... 5 1.3. VALUE CREATION , CAPTURE AND PROTECTION ...... 6 1.3.1. Value Creation ...... 6 1.3.2. Value Capture...... 7 1.3.3. Value Protection...... 9 1.4. SPORTS ECONOMICS ...... 10 1.4.1. Peculiar Economics...... 11 1.4.2. Products of Professional Sports Clubs ...... 13 1.5. SUPERSTAR EFFECT ...... 18 1.6. SUMMARY AND CONCLUSION ...... 19 2. RESEARCH DESIGN ...... 23

2.1. INTRODUCTION ...... 24 2.2. RESEARCH METHODOLOGY ...... 24 2.3. DATA GATHERING & ANALYSIS ...... 24 3. DOMAIN: PROFESSIONAL FOOTBALL INDUSTRY ...... 27

3.1. INTRODUCTION ...... 28 3.2. SELECTION SYSTEM OF PROFESSIONAL FOOTBALL ...... 28 3.2.1. Selected: Football Clubs ...... 28 3.2.2. Selectors: Market and Expert Selectors ...... 30 3.2.3. Competitive Advantage in Football Industry ...... 32 3.3. ROLE OF INDIVIDUAL FOOTBALL PLAYER ...... 34 3.4. SUMMARY AND CONCLUSION ...... 37 4. EMPIRICAL FINDINGS: EXPLORING SUPERSTARDOM ...... 41

4.1. INTRODUCTION ...... 42 4.2. FOOTBALL SUPERSTARS ...... 42 4.3. EXPLORING SUPERSTARDOM ...... 45 4.3.1. Talent...... 46 4.3.2. Reputation ...... 48 4.3.3. Access to Large Markets...... 51 4.3.4. Bargaining...... 52 4.4. CONCLUSION ...... 59

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5. CONCLUSION & IMPLICATIONS ...... 62

5.1. INTRODUCTION ...... 63 5.2. CONCLUSION ...... 63 5.3. IMPLICATIONS ...... 64 5.4. SUGGESTIONS FOR FURTHER RESEARCH ...... 65 REFERENCES...... 67

BOOKS AND ARTICLES ...... 67 WEBSITES ...... 72 NEWSPAPERS ...... 73 APPENDICES...... 75

A. THE PRODUCTS OF SPORTS ORGANIZATIONS ...... 76 B. EMPIRICAL RESEARCH ...... 77 B.1.1. People Approached For Pilot Research ...... 77 B.1.2. Sent Information for Pilot Research...... 78 B.1.3. Results of Pilot Research...... 82 People Approached for Exploratory, Qualitative Research...... 84 B.2.1. Sent Information for Exploratory, Qualitative Research ...... 84 B.2.2. Results of Exploratory, Qualitative Research ...... 86 B.3. Confirmations by the Respondents ...... 93 C. MARKET POOL UEFA CHAMPIONS LEAGUE 2002-03 ...... 94 D. REASONS TO BECOME A FOOTBALL CLUB SUPPORTER ...... 95 F. PERFORMANCE OF TOP 15 HIGHEST VALUED CLUBS ...... 97 G. THE DIVISION OF WAGES OF THE DUTCH EREDIVISIE ...... 98 H. THE INCREASE OF WAGES OF THE FA PREMIER LEAGUE ...... 99 I. NUMBER OF PLAYERS OF BIG FIVE LEAGUES ...... 100

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Introduction

"He's the archetypal Western Prince," Yohei Kasuga, the UK correspondent for The Nikkan Sports News, Japan's biggest tabloid newspaper, said. "Asian women simply can't get enough of this blonde, tall, handsome man, who happens to be rather good at football and has a pop star wife. It's the women wanting to be with him, men wanting to be him all over." (the London Times, July 11 th 2005)

The quote shown above about football player David Beckham presents the very core of the subject of this thesis: the superstar effect in the domain of professional football. This report represents the final assignment for the Master of Business Administration “Strategy & Innovation” of the University of Groningen. The entire master-programme has been centered on the management of non-technical innovations. The subject of this thesis is derived from the Field Course for Strategy & Innovation, which I based on the organization of Manchester United F.C. During this Field Course, it was striking to see how individual players like David Beckham can become very important for such a multinational corporation. That is why I decided to further investigate the phenomenon where individual players capture so much value. Hence the subject for this thesis: “Superstardom in the Football Industry” .

Research Objective and Research Questions

Earlier research has shown “ that there is a positive relationship between revenue and the number of superstars under contract and between the number of superstars under contract and success in the [UEFA] Champions League” (Leijenaar, 2005: 56). This implies it can be rewarding for a football club to employ superstar football players. However it remains uncertain which factors lead football players to superstardom: “it is not clear which performance characteristic (if any) is valued by consumers in a way that leads to superstar effects in wage outcomes” (Lucifora & Simmons, 2000: 52). It would be interesting to explore which factors can lead individual football players to wages that are comparable to those of the top earners of the industry; i.e. the football superstars. That is why I have chosen the following research objective:

Explore which factors are most likely to lead individual football players to superstardom.

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This research is conducted by desk research and qualitative empirical research. The target audience for this thesis consists of every person that has an interest in professional football and its superstars. In order to fulfill the research objective, I have formulated the main research question:

Which factors are most likely to lead football players to superstardom within the selection system of professional football?

To answer this research question, I have formulated sub questions that are followed by an overview of the content of this thesis. Theory : What is a selection system? How is value created, captured and protected? What characterizes the peculiarity of sports economics? What is the superstar effect? Domain: How can the selection system of professional football be described? What is the role of the individual players within this selection system? Empirical: What defines football superstars and which factors are likely to lead players to superstardom?

Overview

The first chapter presents the theoretical framework of the thesis. Concepts like selection systems (Wijnberg, 1995) and value creation, capture and protection (Bowman & Ambrosini, 2000) are elaborated. Furthermore, the - experience - products of professional sports organizations are discussed, as well as the relation between on-pitch 1-performance and off-pitch-performance (Neale, 1964; Davenport, 1969; Hoehn & Szymanski, 1999; Stevens e.a. 2003; Fort, 2003). This leads to the introduction of the concept of superstar effects (Rosen, 1981). This theoretical background is used to describe the professional football industry and its relevant actors.

Before entering the domain of professional football it is important to elaborate the research design of this thesis first. The second chapter explains why I have chosen for a qualitative, exploratory research. Moreover, the methods of data gathering and analyzing of the two phases of the empirical research are discussed here.

1 With the term ‘pitch’, I mean the area in which the particular sport takes place. Examples are the tennis court, the boxing ring and the football pitch. R. Woestenenk, s. 1231006 p. 2 S Superstardom in the Football Industry & I -Introduction-

The third chapter introduces the domain of the thesis. The selection system and the role of individual football players are described here. This leads to the empirical subject of the thesis; namely football superstars. Accordingly, a preliminary conceptual model is constructed which presents plausible factors for the phenomenon of superstardom.

Before the conceptual model is evaluated, an operational definition of football superstardom is given in the fourth chapter. Consecutively, the preliminary conceptual model is subjected to the opinions of the experts of the professional football industry. The information gathered by this empirical exploration enabled me to complete the conceptual model, for example by adding the factor “bargaining” . This final conceptual model, accompanied by a number of research implications, can be used as a starting point for future, explanatory research.

R. Woestenenk, s. 1231006 p. 3

1. Theoretical Background

S Superstardom in the Football Industry & I -1 Theoretical Background-

1.1. Introduction

This chapter presents the theoretical background of this explorative thesis. Firstly, the theoretical framework of selection systems (Wijnberg, 1995) is discussed. This leads to the concepts of value creation, capture and protection (Bowman & Ambrosini, 2000). Next, the peculiar economics of sports are elaborated (Neale, 1964; Davenport, 1969; Sloane, 1971; Hoehn & Szymanski, 1999; Stevens e.a. 2003; Fort, 2003). Finally, the phenomenon of superstar effects is introduced (Rosen, 1981).

1.2. Selection Systems

When discussing a problem or phenomenon within a certain industry it is helpful to first present a good view on how this industry functions. To effectively explain the boundaries of such a particular domain, the framework of selection systems is a useful tool (Wijnberg, 1995). This framework can be used to describe and analyze the characteristics of a particular process of competition by focusing on the characteristics of the actors who are being selected, the actors who are selecting and the nature of the relations between both groups (Wijnberg, 2002).

There are three ideal types of selection systems: i.e. market, peer and expert selection. Market selection is the most traditional type, where end consumers are the selectors and producers are the selected. Peer selection means that the group of selectors and the group of those being selected are essentially the same. An example is that of the selection of the winners of the Academy Awards (or Oscars) by fellow filmmakers in Hollywood. Finally, expert selection represents the selection system in which the selecting is neither performed by market demand nor by producers, but by experts: persons or institutions considered to possess specialized knowledge and powers of judgment. It should be emphasized that these are ideal types. In reality, the outcomes of competitive processes are often determined by a combination of these types (Wijnberg, 1994).

Within a particular market a number of firms is competing to be selected by one or more selectors. Initially, the selectors select the firms which are valid competitors, thereby distinguishing between selected and non-selected firms. Consecutively, selectors separate the winners from the losers by attributing value to the products of some producers and less to the products of others. Hence, according to the framework of selection systems, competitive

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advantage stems from the value that selectors attribute to the products of a particular firm or actor (Mol & Wijnberg, 2005).

To successfully enter a selection system a firm needs to fulfill some requirements. First, the firms’ products need to be perceived as valuable by the relevant selectors. Next, in order to obtain a competitive advantage, these products need to be valued over those of rival firms. Finally, the firm needs to secure the resources that enabled them to create this value (Mol & Wijnberg, 2005). This implies that a firm has to possess just those resources – or assets – that create, capture and protect value. What characterizes such valuable resources is discussed in the following sections.

1.3. Value Creation, Capture and Protection

The inside-out perspective that takes the value creating resources as its starting point can be described as a Resource Based Theory or Resource Based View (RBV) (Prahalad & Hamel, 1990; Barney 1991). A theory that is related to the RBV is the perspective of Resource Dependence (Pfeffer & Davis-Blake, 1987). Whereas the first mostly focuses on the resources of an organization, the resource dependence approach focuses on the role that the organization fulfills in a specific environment (Jacobs, 2005: 111). Both approaches are adopted in the following sections.

1.3.1. Value Creation

The RBV generally addresses performance differences between firms using asymmetries in resources like knowledge, competencies and / or capabilities (Prahalad & Hamel, 1990; Barney 1991; Amit & Schoemaker, 1993; Conner & Prahalad, 1996). According to Bowman and Ambrosini (2000), an organization can be regarded as a bundle of resources (Caves, 1980; Amit & Schoemaker, 1993). Consecutively, resources that are valuable, rare, imperfectly imitable and imperfectly substitutable (Barney, 1991) are an organization’s main source of competitive advantage. Although this last finding is in essence tautological: “ indeed it is hard to imagine a resource that is valuable, but at the same time imitable, substitutable, and not scarce ” (Priem & Butler, 2001; Mol & Wijnberg 2005: 4-5).

Nonetheless, the main issue of the RBV is that the resources that can perform heterogeneously across firms are most likely to lead firms to a competitive advantage (Barney, 1986; Castanias & Helfat, 1991). Especially the employees of firms can become such heterogeneously performing

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resources: “ human or ‘cultural’ resources are the sources of above normal returns, and not the purchasable and tradable physical assets ”. This is because the employees are the only resources that are able to possess and use tacit knowledge (Bowman and Ambrosini 2000: 6).

Tacit knowledge can be best described as knowledge that cannot be explicated fully even by an expert and can be transferred from one person to another only through a long process of apprenticeship. Tacit knowledge is also described as knowing more than you can tell (Polanyi, 1967). Additionally, tacit knowledge is individualized knowledge, due to personal experiences and outlook, which requires a rich, broad communications medium to effectively transfer to another person (Tuggle & Goldfinger, 2004). In contrast, explicit knowledge is relatively easy to articulate and communicate and, thus, transfer between individuals and organizations. Explicit knowledge resides in formulae, textbooks, or technical documents (Madhavan & Grover, 1998).

Tacit knowledge consists of two different elements: cognitive and technical elements (Nonaka, 1994). The cognitive elements represent mental models which include schemata, paradigms, beliefs, and viewpoints that provide perspectives that help individuals to perceive and define their world. In contrast, the technical element of tacit knowledge covers concrete know-how, crafts, and skills that apply to specific context. This technical element has been discussed by other scholars, who also state that tacit knowledge and specialized skills show great resemblance (Polanyi, 1976; Levin e.a., 1987; Grant, 1996; Berman e.a., 2002).

For example, Berman e.a. (2002: 15) contribute the skill of a baseball player hitting a homerun to tacit knowledge: “it involves pattern recognition, it is acquired through cumulative experience, it operates unconsciously in the background, it is difficult to articulate, and it forms the basis of valuable individual human skills” . This means that the tacit knowledge of hitting a homerun is hard to codify or transfer which entails that it is hard to replace or substitute those players that are able to hit homeruns often and consistently. When you reason that a baseball club’s competitive advantage is dependent on the number of homeruns, you might also assume that those players that are hitting homeruns frequently - thus create important value - capture a lot of value. Whether this holds true is discussed in the following section that describes the process of capturing value.

1.3.2. Value Capture

Although the employees of an organization may be important sources of value and of competitive advantage, Bowman and Ambrosini (2000) argue that not all labor is a direct source of value or R. Woestenenk, s. 1231006 p. 7 S Superstardom in the Football Industry & I -1 Theoretical Background-

competitive advantage. They suggest three categories of labor, namely: generic, differential and unproductive labor. Firstly, generic labor is labor that performs homogeneously across competing firms. This labor is essential to be able to compete, but it does not lead to a sustainable competitive advantage. Secondly, differential labor is labor that performs heterogeneously across competing firms. This labor is the source of an organization’s uniqueness, and its competitive advantage (Bowman & Ambrosini, 2000: 6). Finally, there is unproductive labor , which does not contribute value to the firm nor is it a base for competitive advantage.

Interestingly, Bowman and Ambrosini (2000: 9) state that: “… there is no relationship between the nature of the use value2 supplied by the resource supplier, the role of this use value in the production process, and the amount of exchange value 2 that the resource supplier captures. Even where a particular employee or group of employees can be seen to be critical to the creation of use value, or where a particular inert use value is a vital element in the process, the sellers of these resources may capture minuscule amounts of exchange value, due to their weak bargaining power. ”

In other words: although the actions of labor are the sole source of value - thus profit - employees often do not capture the full value they create for the organization. This is because the value that is captured by the employees is a function of a bargaining process between labor supplier and labor buyer. The bargaining position of an employee becomes weak when there appears to be a number of close substitutes for the labor offered by this employee. This implies that most employees are treated as though they are homogeneous, although in fact some employees perform heterogeneously. This means that the value that is created by employees is still mostly captured by the organization itself; the employees only receive a relatively small part (Bowman & Ambrosini, 2000).

Situations where specific employees form the essential value creating resources for organizations are often described by scholars that adopt a ‘Resource Dependence’ perspective. One of the questions these scholars ask is which relations organizations should take part in to secure a stable

2 Bowman and Ambrosini (2000: 4) make a distinction between (perceived) use value and exchange value. The first is defined by customers, based on their perception of the usefulness of the product on offer; i.e. the monetary value the customer is prepared to pay for the product. Exchange value is realized when the product is sold. It is the amount of value paid by the buyer to the producer for the perceived use value. So firms (thus, its employees) create perceived use value, and through the sale of products, exchange value is realized. R. Woestenenk, s. 1231006 p. 8 S Superstardom in the Football Industry & I -1 Theoretical Background-

and maybe even prosperous future (Jacobs, 2005). In some situations this means that an organization’s future is highly dependent on the performance of its employees, because these have distinct characteristics that can not be substituted easily. According to the Resource Dependence perspective, situations where talent is complementary, an individual’s performance can add disproportionately to organizational output (Stinchcombe, 1963; Pfeffer & Davis-Blake, 1987; Jacobs, 2005). This is illustrated by Pfeffer and Davis-Blake (1987: 452): “Perhaps in contexts in which positions are especially critical, highly skilled or experienced people are recruited, and higher salaries are needed to attract those more capable individuals”.

There are situations where employees are very aware of their uniqueness and the distinct value they contribute to the organization’s output. This leads to high dependence on a few specific employees. According to Bowman and Ambrosini (2000: 10) examples of such employees are film stars, key sales people, top foreign exchange dealers and soccer players . Wijnberg (2002: 1481) presents the following situation, where: “every member of an organization can estimate his or her value to the organization [..]. In fact, this would mean that the member of the organization would be able to know and appropriate the value of his or her contribution as determined by the selectors of the selection system in which the organization competes. ”

These statements can be projected on the earlier example of the baseball player that consistently hits homeruns for his team. Such a player can be defined as a differential employee of his club; he consistently creates value that can ultimately lead his club to a competitive advantage in the baseball competition. Logically, this also implies that he can bargain to high wages; his club has become dependent on his (tacit) talent. However, if this same player is not willing or able to the bargain to the highest possible wages, then he will not capture the optimal value. So the value that is created by this baseball player does not directly influence the amount of value he actually captures; this is dependent on his willingness and ability to bargain.

1.3.3. Value Protection

The wages of a particular employee can also be viewed as the price an organization has to pay to exclusively benefit from his or her labor efforts. From this point of view, an organization protects its value creating resources, by allowing them to capture some of the value they have created for the organization. Furthermore, labor agreements enable an organization to limit the employment

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opportunities of its employees in that they cannot transfer or be released to another organization without the permission of their current organization (Dabscheck, 1975).

Besides the price of the performed labor, there is also the possibility to include a number of additional clauses to the employment contract. These might help to smoothen the negotiating process. Generally, there are two types of clauses: performance-rated clauses and future-based clauses. The first aims to stimulate a certain performance of the employee, which leads to a reward from his or her employer. The second type of clause has to do with future decisions of either employee or employer. Examples are clauses that prohibit employees from taking away customers from the employer when an employee leaves the organization to start a spin-off firm.

Organizations can also apply other protection tools to protect their competitive advantage. The ability of organizations to secure returns from investments in personnel and assets is also referred to as “appropriability” (Teece, 1986). Examples of such tools range from gentlemen’s agreements to Intellectual Property Rights. However, these are not the focus of this thesis, so these will not be elaborated.

The focus of this thesis is on the value created by the employees of an organization, because they represent the resources that possess and use tacit knowledge and skills, which enables them to perform heterogeneously across firms. These people do not all contribute distinct value to the output of the organization though. Only the generic and differential employees are able to do this, whereas the latter can also create a competitive advantage for their organization. The amount of value that an employee creates for his organization directly influences his bargaining position. Consecutively, the actual amount of value captured is dependent on this bargaining process. When an employee is aware of the value he contributes he can bargain to capture an optimal amount of value. Employment contracts enable organizations to exclusively exploit their employees and simultaneously enable employees to capture a part of the value they have created.

1.4. Sports Economics

Before entering the domain of the professional football industry, it is important to say something about sports economics. This is because sports economics functions differently from conventional economics. In conventional economics it would be most profitable to dominate - or monopolize - the market, but with sports economics this does not hold true. The interdependence between the

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competing clubs leads to a situation that led Neale (1964) to define sports economics as peculiar economics. This is elaborated in section 1.4.1. which explains the importance of the on-pitch- performance for the continuity and profitability of professional sports clubs. Consecutively, section 1.4.2. zooms in on this experience product, by discussing the four characteristics of this product as well as the contribution of individual players to this product. This section also presents other possible products of professional sports clubs, besides the on-pitch-performance.

1.4.1. Peculiar Economics

According to Davenport (1969), the profitability of a professional sports club depends completely on the ongoing cycle of attendance and winning. The attendance can be defined as the entire interest of consumers either at the stadium or through media like television. Moreover, by hiring high-quality players, a club can improve its on-pitch-performance, thereby attracting more interest from selectors. However these high-quality players often come at a higher price than their less talented peers (Neale, 1964; 1971; Scully, 1974; Hausman & Leonard, 1997; Davenport, 1969; Dabscheck, 1975; Hoehn & Szymanski, 1999; Fort, 2003). This can be summed up by the following findings of Hoehn and Szymanski (1999: 216): “ [i] for each team, increased wage expenditure leads to better performance on the pitch [ii] for each team, improved performance on the pitch leads to increased revenues.”

In Figure 1, I present the relation between on-pitch-performance, interest from selectors and revenues. To complete the cycle I have added the aspects of investment and reputation / brand value. I have added “investment”, because this shows the possibility of continuing the performance on the pitch, by investing the generated revenues in high quality players. The factor “reputation / brand value” positively influences the interest from selectors: this is explained in section 1.4.2.

-Fig. 1. Relation between On -Pitch -Performance, Attendance, Brand Value and Revenues -

Experience Product; Reputation / Interest from Selectors On-Pitch Performance Brand Value

Investments Revenues

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This cycle implies that it would also be most profitable for sports clubs to win every game and competition there is. This is called a utility maximizing strategy (Sloane, 1971). However, this is not the most profitable strategy for professional sports organizations. That is where the peculiar aspects of sports economics come into play (Neale, 1964).

Firstly, a utility maximizing strategy has a negative affect on a club’s cost structure. As stated earlier; if a club wants to win the competition, it should employ a high-quality team. Such a high- quality team comes with substantial costs. This means that utility maximizing teams might win every game in the competition, but simultaneously see the majority of its revenues flowing into the pockets of their employees (Dabscheck, 1975; Vamplew, 1982). Or as Vamplew (1982: 550) puts it: “although winning may produce profits, it is commonly accepted by sports economists that consistent winning does not maximize them” . Moreover, bear in mind that clubs can not consistently buy and employ more and better players. This is because market potential is not indefinite; if clubs can not earn enough revenues to cover the wage expenditures then this has serious implications on a club’s continuity.

Secondly, if a utility-maximizing strategy is executed effectively and consistently, this will have negative influence on the competitive balance. An imbalanced competition becomes predictable which in turn leads to a decreasing interest of selectors (Davenport, 1969; Sloane, 1971; Dabscheck, 1975; Vamplew, 1982). This centers on the interdependence of the participants within a league and the importance of competitive balance and uncertainty of outcome therein (Morrow, 2003: 5). This interdependence can also be described as a trade-off between collusion and competition between the competitors (Davenport, 1975). On the one hand, this concerns the need for cooperation among clubs to offer an attractive - hence balanced - competition. On the other hand, a club wants to win its matches, in order generate more resources

According to several academics (Neale, 1964; Davenport, 1969; Dabscheck, 1975; Vamplew, 1982; Fort & Quirk, 1995; Hoehn & Szymanski, 1999; Palomino & Sakovic, 2000; Fort, 2000; Morrow, 2003), profits of professional sports clubs can be maximized if the attractiveness of a competition is maximized. This is achieved when the competing clubs are of the relative same quality which leads to uncertainty of the outcome of a competition. This creates thrilling matches

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and fierce competition which appeals to the interests of selectors 3. In other words: if there is no uncertainty about the result of a competition, there will be little interest from the selectors. Consecutively, this means that attendances, gate receipts, television rights income – hence profits – will be low (Neale, 1964). That is why Neale (1964) was the first to describe sports economics as peculiar economics. An excellent example is the declining interest in Formula One, when Michael Schumacher won the majority of the races and also six consecutive championships (NRC Handelsblad, 2005).

So it appears that the on-pitch-performance is essential for the economical performance of professional sports clubs. That is why the following section discusses this and other products that are common in sports economics.

1.4.2. Products of Professional Sports Clubs

All professional sports club have at least one single product in common: the on-pitch- performance. This can be characterized as an experience product, because its value can only be determined through consumption (Nelson, 1970; Huber & Elrod, 1981; Pine & Gilmore, 1999). But how do selectors choose such a product if its value can not be determined prior to consumption? This brings us to the factor of reputation - or brand value - that was mentioned earlier in figure 1 and section 1.4.1. After the explanation of the role of reputation and branding, I will zoom in on the actual product of sports. Finally, I zoom in even further on the product of sports, by describing the contribution of individual athletes.

Reputation & Brand Value

According to Neelameghan and Jain (1999) psychological cues like expectations and word of mouth are essential for the success of an experience product. This implies that selectors tend to be influenced by the behavior or expected behavior of similar decision-makers, also described as bandwagon effect among users (Van den Ende e.a., 2003). In stead of every selector making up his own mind, he or she is influenced by the preferences of his peers in order to eventually choose the experience product of ‘his’ liking.

3 In some American sports leagues they have created mechanisms which counter the market influences on the demand for talented (young) players. For example, the National Basketball Association (NBA) has adopted a draft, which offers smaller-revenues teams to have the first chance to sign the most talented young players. This way, it is avoided that only the large-revenues teams sign the best players. This rule was adopted to stimulate the competitive balance, hence the attractiveness of the NBA (Fort, 2003: 227). R. Woestenenk, s. 1231006 p. 13 S Superstardom in the Football Industry & I -1 Theoretical Background-

Bandwagon effects are also closely related to the concept of reputation. Reputation can be described as the consumers’ beliefs about a firm’s behavior based on its past and present actions (Liebeskind & Rumelt, 1989). Consecutively, brand names are used to build respect and trust with the organization’s offerings, so consumers are more likely to accept the organization’s promises about its other offerings (de Chernatony, 1999). Reputation and brands also prevent organizations from benefiting from the selectors’ inability to determine the value of experience products before they purchase it. As soon as the offered products do not conform to the expectations of the consumers, the reputation of the supplier will deteriorate and the brand value will diminish (Liebeskind & Rumelt, 1989). So in this way, brand value can be interpreted as the commercial value of an organization’s and / or product’s reputation. When the reputation of the organization and / or product deteriorates, the brand value will diminish.

A football brand in specific can become quite valuable due to fan loyalty, brand longevity and low marketing / promotional expenditures (Middleton 1997, cited in University of Leicester 2002a). This is because (i) most clubs have their own share of - fanatic - supporters, (ii) clubs are set up as a long-term organization and (iii) marketing costs are very low for high-profile companies like football clubs. This implies that the brand and reputation of a football club can also be used to sell other product than just its on-pitch-performance.

So reputation and branding appears to be important for the selection of the products of professional sports clubs. But what characterizes the actual product of sports? After all; a reputation or brand has to be based on something. That is why the next section takes a closer look at the different characteristics of the product of on-pitch-performance.

Characteristics of the Actual Product of Sports

The product of sports clubs consists of four basic characteristics: athletic prowess, absolute / relative quality, thrill of victory and commonality, see Figure 3 (Fort, 2003: 13).

R. Woestenenk, s. 1231006 p. 14 S Superstardom in the Football Industry & I -1 Theoretical Background-

- Fig. 2. The Characteristics Of The Actual Product Of Sports -

Athletic Prowess

Absolute / Relative Quality Thrill of Victory

Absolute Commonality/ Relative Team Quality

Athletic prowess concerns the physical abilities of a team or of certain players (Fort, 2003). Berri e.a. (2004) and Hausman and Leonard (1997) found that the presence of specific highly talented players has a substantial effect on television ratings of the American National Basketball Association (NBA).

Secondly, absolute team quality refers to the level of quality (Fort, 2003); for example the difference between the Primera Division and the Segunda Division in Spanish football. Relative quality describes the competitiveness of a team. This product characteristic is closely related to the third product characteristic ‘thrill of victory’: “winning is very closely related to competition in the sense that victory over a bitter rival is the sweetest of all” (Fort 2003: 14). According Rivers and DeSchriver (2002: 166), the optimal winning percentage in Major League Baseball from an economic point of view is 60%; at that percentage the attendances will be the greatest. However, other studies have shown that some English football fans are not affected by the rate of success or failure of their favorite team. This means that strongly committed fans continue to support their teams irrespective of on-field success (Meier, 1979; Wann and Branscombe, 1990; Jones 1998, cited in Morrow 2003: 48).

This brings us to the fourth and final product characteristic of sports, i.e. the commonality that sports provide. This refers to the opportunity to commit or bond people to a particular club and each other. Football clubs offer a collective and symbolic focus for a sense of belonging and pride in a local community. Some people have even described following football clubs as a neo- religious form of devotion, which in turn can also explain the phenomenon of football hooliganism (University of Leicester, 2002b).

R. Woestenenk, s. 1231006 p. 15 S Superstardom in the Football Industry & I -1 Theoretical Background-

Collectively, these four characteristics form the actual product of sport. To improve the value of this product, sports club can invest in their players. Although having highly qualitative players is never a guarantee to win the competition, it does raise the expectation of a good result. This is of key importance for experience products since the true value of an experience product can only be determined after its consumption. For example: when one of the best basketball players of all time, Michael Jordan, returned to the NBA in 1994 after a period of absence the television ratings of his first game were 10,9%; the highest NBA ratings since 1975 (Hausman & Leonard, 1997: 587).

However, highly talented players often come at a high price. That is why professional sports clubs are searching for other ways to generate more revenues, for example by market development and / or by diversification (Ansoff, 1987; Jacobs, 2005). First of all, clubs are trying to bring their experience product to new markets. This is stimulated by the possibilities of technological developments of media. Secondly, clubs have started to enter new markets with new products in order to generate extra revenues; i.e. adopting diversifying strategies (Ansoff, 1987; Jacobs, 2005). This diversification strategy is fuelled by the reputation and brand that professional sports clubs have created. In Appendix A, an overview is shown about the diverse products that sports clubs offer nowadays. At the centre of the figure you can see the core experience product, which is surrounded by diversified and branded products. All of these potential revenue sources are based upon the core product, i.e. the on-pitch-performance. The actual product of sports is created collectively by the players of the professional sports club. But what is the contribution of the individual athletes to this product and why are some athletes more valuable then others? These questions are addressed in the next section.

Contribution of Individual Athletes

In team sports, individual athletes often fulfill specific roles on the field. This is often coupled with the position they occupy. In the case of football, goalkeepers are there to prevent goals, whereas strikers are there to score goals. But how can individual players be compared and valued, when they all play different roles? Accordingly, as shown in the introduction, Lucifora and Simmons (2000, 52) stated that “it is not clear which performance characteristic (if any) is valued by consumers in a way that leads to superstar effects in wage outcomes” .

That is where the research of Stevens e.a. (2003) can be relevant; they have investigated why some athletes were chosen as sports heroes. According to a survey among 888 Canadian students, R. Woestenenk, s. 1231006 p. 16 S Superstardom in the Football Industry & I -1 Theoretical Background-

athletes were perceived as sports ‘heroes’ because of five reasons: athletic skills, personal traits, pro-social behavior, celebrity status and ‘adhesion for other reasons’ (Stevens e.a., 2003: 107).

Athletic skills include aspects like strength, speed, agility and athletic competence. Personal traits are related to being succesful, friendly, committed, humorous and intelligent (Stevens e.a., 2003). These two characteristics can be defined as respectively the technical and cognitive tacit knowledge that define an individual athlete. Because this tacit knowledge is difficult to transfer, these characteristics define the extent to which a player is unique, thus the extent to which this player can be substituted by other players. The athletic skills and personal traits appear to enable athletes to perform heterogeneously, thus to create a competitive advantage for their club.

Pro-social behavior related to the sport hero’s level of social outreach both on and off the pitch and investment in the lives of others. Celebrity status is related to media promotion and image enhancements. These refer to commercial appearances, sport product endorsement and the physical attractiveness of the sports hero (Stevens e.a., 2003). These characteristics do not appear to be part of tacit knowledge of an athlete. Both pro-social behavior and the celebrity status of an athlete can be stimulated to some extent. This implies that these characteristics are less important for the substitutability of athletes.

Finally, adhesion for other reasons refers to reasons that have to do with either activity adhesion or social adhesion. In the case of activity adhesion, some respondents selected their favorite sport hero based upon their love of the game. “ For example, ‘I love basketball’ was offered as a rationale for admiring Michael Jordan.” In the case of social adhesion, arguments like nationality, gender or ethnicity were given (Stevens, 2003: 107).

Furthermore, Stevens e.a. (2003) investigated how to adopt a successful sports endorsements strategy, by selecting sports heroes as promotional representatives. This is because athletes possess both credibility and attractiveness which are vital for sport endorsement communication. Moreover, their credibility is associated with expertise and trustworthiness (Shank, 1999 in: Stevens e.a., 2003). This implies that athletes not only contribute value on the pitch, but can also fulfill promotional purposes; either for the club or for third parties like sponsors and advertisers.

The question remains why some athletes are valued substantially more than others. This phenomenon is described further in the next section. R. Woestenenk, s. 1231006 p. 17 S Superstardom in the Football Industry & I -1 Theoretical Background-

1.5. Superstar Effect

Imagine a situation where it is very hard for firms to create a sustainable competitive advantage, due to high rivalry. Within such ‘rat race markets’ every resource is often directed at creating a obtaining the highest rank order. The only thing that matters is to be better than the competitors: at all costs. Such an environment can be interpreted as a winner-take-all market (Frank & Cook, 1995). Now imagine that an organization in this market is very dependent on a small number of employees, because these create a specific value which is essential for the competitive advantage of the organization. When these key employees are aware of their uniqueness and of the value they contribute to their firm’s output, they can bargain their way to enormous salaries. In other words: winner-take-all markets form excellent scenarios for superstar effects to occur in.

The phenomenon of ‘superstar effects’ was first described by Rosen (1981: 845), who defined it as a situation “ wherein relatively small numbers of people earn enormous amounts of money and dominate the activities in which they engage” . This phenomenon is very similar to the phenomenon of winner-take-all markets (Frank & Cook, 1995), although the superstar effect looks at individual persons with the same activity, whereas winner-take-all markets look at firms that compete within the same market 4.

Several scholars relate both phenomena - the winner-take-all market and the superstar effect - with the entertainment industries and the industry of professional sports, i.e. industries that are centered on experience products (Rosen, 1981; Adler, 1985; Fort & Quirk, 1995; Frank & Cook, 1995; Pepall & Richards 2000; Rosen & Sanderson, 2002; Lucifora & Simmons, 2003; García del Barrio & Pujol, 2004). For example, MacDonald (1988: 166) described the superstar effect within the music industry: “there are a few stars in the industry [... who] serve a large fraction of the audience and obtain an even larger share of the returns” .

Both superstar effects and winner-take-all markets are the result of competitive interactions. Firstly, selectors often find lesser talent a poor substitute for greater talent . This means that small

4 However, Rosen (1996) has argued that the concept of winner-take-all market tends to exaggerate the importance of rank order or competitive advantage. Rosen (1996: 135) comments that winning does not have to be everything and that the less talented people can also live useful and rewarding lives.

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increases in talent lead to great increases of income (Rosen, 1981; Frank & Cook, 1995; Fischbacher & Thöni, 2002). When you translate the factor talent into football terms, it appears that the personal aspects of football players are relevant. Especially the tacit knowledge of an individual player, like athletic skills and personal traits, reflect talent. This is because these qualities can be unique and hard to transfer or learn. The exact aspects of the factor talent remain to be explored.

Secondly, the superstar effect is the result of technological developments which enable superstars to access markets effectively and efficiently (Rosen, 1981). This either means that (i) the activities of superstars can be reproduced endlessly at a fixed cost, for example by recording the activities, or (ii) the costs of production do not rise in proportion to the size of the seller’s market (Rosen, 1981; Frank & Cook, 1995; Fischbacher & Thöni, 2002). This implies that the potential size of a market might also be of importance for the phenomenon of superstardom. After all, in markets where there is a lot of demand for a product, it is plausible that these markets will also generate more revenues. Whether this holds true for football superstars, is explored in chapter 4. Thirdly, Adler (1985) attributes the superstar effect to the extent in which a particular musical performer is known and appreciated among the selectors. Thus, when an artist is more widely known – and appreciated – it becomes easier for selectors that are not familiar with this artist to select this artist too 5. This corresponds with learning factors that are pivotal for the success of experience products (Huber & Elrod, 1981), like for example bandwagon effects. Aspects that presumably are relevant are reputation or personal aspects of players that appeal to selectors, for example pro-social behavior, celebrity status, nationality, and ethnicity. Furthermore, the influence of other selectors might also be of relevance for the occurrence of bandwagon effects with regard to individual players, for example in the form of opinions of experts. This is also kept in mind when empirically exploring the phenomenon of superstardom in chapter 4.

1.6. Summary and Conclusion

The framework of selection systems can be used to present a particular industry, by describing both the selected and the selectors who eventually choose the ‘winners’ of the competitive process of that particular industry. The ‘winning’ firms obtain a competitive advantage because their products are valued over those of rival firms by the relevant selectors. The value of the

5 With this statement, Adler (1985) argues that large differences in earnings could also exist even where there are no differences in talent at all. R. Woestenenk, s. 1231006 p. 19 S Superstardom in the Football Industry & I -1 Theoretical Background-

products of an organization is created by its resources. Especially the employees are able to perform heterogeneously across organizations which can lead these organizations to a competitive advantage. This is because the employees possess and use tacit knowledge which consists of technical and cognitive elements. However, not all employees contribute distinct value to the output of the organization. Only the generic and differential employees are able to do this, whereas the latter can also create a competitive advantage for their organization. Consecutively, the amount of value that is captured by these people is dependent on their ability to bargain; not directly on the amount of value they create. It can be assumed that those employees that create considerable, specific value are also the toughest bargainers. Employment contracts enable organizations to exclusively exploit their employees and simultaneously enable employees to capture a part of the value they have created.

The domain of this thesis lies within the context of sports economics. This is characterized by the experience product of on-pitch-performance. When the on-pitch-performance of professional sports clubs improves, the size of the attendances increases which in turn leads to an increase of revenues. Within sports economics the actors need to obey the demand for an attractive, thrilling, thus balanced competition. This means that clubs can not afford to adopt a utility maximizing strategy. Maximum profits can be achieved when the attractiveness of the experience product of sport is maximized. The attractiveness of the product of sports is partly dependent on the expected value of the product, which is derived from bandwagon effects among users. That means that factors like reputation and brand value are relevant. The actual value of the product of sports is derived from four factors, namely the athletic skill, the absolute / relative quality, the thrill of victory and the commonality the sport provides.

To improve the actual value of this product, a club can invest in the quality of its players. Because the players in team sports often have different functions or positions, it is hard to assess the true quality or value of individual players. Both cognitive and technical elements of tacit knowledge seem to be relevant for the quality, like for example personal traits and the athletic skills. These two characteristics enable an individual player to perform heterogeneously, so they are important for his individual contribution to the product of sports. Furthermore, pro-social behavior and celebrity status are also characteristics that influence a player’s value. However, these characteristics can be influenced or stimulated.

R. Woestenenk, s. 1231006 p. 20 S Superstardom in the Football Industry & I -1 Theoretical Background-

-Fig. 3. The Experience Product of Sports -

Experience Product of Sport:

Expectations - Reputation – Brand Value

Actual Product of Sport Athletic skills Absolute / relative quality Thrill of victory Commonality sports provide

Ind ividual Athlete Athletic skills Personal traits Pro-social behavior Celebrity status Nationality Ethnicity

Supe rstar Athlete Dominates football, thus high wages, due to: Talent; Access to large market Reputation

The purpose of this thesis is to empirically explore the factors and aspect that lead individual football players to substantially higher wages than their colleagues. Superstardom often occurs in winner-take-all markets of experience products. Firstly, this dominance is a result of a difference in talent. This can be translated into the athletic skills and personal traits. Secondly, technological means of distribution and reproduction enables superstars to access vast markets. Thirdly, due to their reputations superstars are well-known by the relevant selectors. This last factor is supported by the way superstars and winning firms use their reputations and brands. This also implies that factors like for example pro-social behavior and celebrity status can be relevant for the status of superstardom.

The dominance of superstars leads them to bargain to enormous wages. Or in other words; the great value that is created by superstars enable them to bargain to capture great value. However, the factor of bargaining is not incorporated explicitly in the definition of superstardom. This can mean that there are individuals who do create essential and unique value, but do not bargain to capture a lot of this value. In my interpretation, these individuals can not be defined as true superstars. After all, these individuals do not extort great amounts of value; so they do not dominate their activities. This is also kept in mind when empirically exploring the phenomenon of superstardom in the professional football industry in chapter four. R. Woestenenk, s. 1231006 p. 21 S Superstardom in the Football Industry & I -1 Theoretical Background-

In chapter three I will construct a preliminary conceptual model which combines the characteristics of individual football players with the three factors that lead to superstardom as well as the factor of bargaining. This model is then evaluated with the respondents of the empirical research. This is all done after the research design and the domain have been discussed in respectively the second and third chapter.

R. Woestenenk, s. 1231006 p. 22

2. Research Design

Superstardom in the Football Industry S& I -2. Research Design-

2.1. Introduction

This chapter discusses the research design of this thesis. The methods of research, data gathering and analysis are presented here.

2.2. Research Methodology

This thesis empirically explores the factors that lead individual players to superstardom within the industry of professional football, by conducting a qualitative research. According to Blumberg (2005) exploration typically begins with a search of published data. By conducting desk research, relevant literature about both superstar effects and sports economics were framed. This literature often explained the effects of employing superstars, measured in their contribution to their organization’s performance. However, most research did not examine just how individual players were able to capture these enormous sizes of value. That is why this thesis attempts to explore just those factors and aspects which potentially lead football players to superstardom.

This thesis presents an empirical research that is based upon earlier, academic literature. I have chosen to conduct a qualitative survey method, because this is the most effective research tool to uncover in-depth, detailed information (Cooper & Schindler, 2003: 325). The research is conducted by addressing football clubs, football players’ agencies and independent experts. The actual data gathering process consists of two phases; an exploratory pilot research which tested the possibility of further explanatory research and an extended exploratory research which consisted of a number of semi-structured interviews with primary sources; see section 2.3. The goal of this research was to construct a comprehensive conceptual model which can possibly be tested in future, explanatory research. The results of the empirical research can be found in Appendix B.

2.3. Data Gathering & Analysis

For the empirical, exploratory research I have chosen to collect primary data as well as secondary data. The respondents were selected because of their direct knowledge of the football industry: all respondents either reside within the professional football industry or are indirectly involved with

R. Woestenenk, s. 1231006 p. 24 Superstardom in the Football Industry S& I -2. Research Design-

it through academic / journalistic research. The independent experts, misters Schaap and Driessen and Professor Koning helped to define a superstar football player. Consecutively, I interviewed both football players’ agents and representatives of football clubs to obtain an objective image of the employment negotiations of football players. All respondents are shown in Table 1.

-Table 1. Empirical Research- # Date (1 st ) Respondent Organization Description Method Confirm. 1 11-11-2005 Prof. Ruud University of Groningen First and only Semi-structured Not added 6 Koning Sports Economics interview 6 Professor in the Netherlands 2 21-11-2005 Bert Schaap & Newspaper ‘Telegraaf’ Sports Journalists E-mail Not added 6 Valentijn correspondence Driessen and telephone conversations 6 3 15-11-2005 & Kees Ploegsma Kees Ploegsma Players’ Agent E-mail 5-5-2006 5-5-2006 jr. Management B.V. correspondence and telephone semi-structured interview 6 4 a. 11-11-2005 Alex Kroes MT&V Sports Players’ Agent a. E-mail 1-5-2006 6 b. 16-3-2006 International correspondence b. Semi-structured interview 5 22-3-2006 Joris van Feyenoord Rotterdam General Counsel Semi-structured 10-5-2006 7 Benthem interview 6 23-3-2006 Hans Nijland FC Groningen Chairman Semi-structured 10-5-2006 7 interview 7 7-4-2006 Jan de Visser SP International Players’ Agent Semi-structured 10-5-2006 interview

The information I discussed with the respondents was based on secondary data like earlier academic research on superstar effects in sports and also on personal ideas. These secondary data were then subjected to those people who are directly involved in the wage negotiations of football players. In fact, this is where multiple primary sources are used to verify the secondary information. This process can also be described as triangulation. According to Blumberg e.a.

6 Part of the first data gathering phase; i.e. the pilot research. For these parts I have not asked for confirmations, because they were purely meant as an inquiry and as help for the research process. 7 These respondents did not respond to the request to verify their contribution to this thesis. However, in this request I have incorporated a reasonable period of ten days in which they could alter or comment on my interpretation of their contribution to this thesis. If they would not respond before this deadline (May 10 th ), then their contribution would be incorporated exactly as it was sent.

R. Woestenenk, s. 1231006 p. 25 Superstardom in the Football Industry S& I -2. Research Design-

(2005: 197), triangulation is a method which increases the construct validity of a research because it uses multiple sources of evidence to increase the independence of the sources of information. The data gathering process consisted of roughly two phases, the first - pilot - research was conducted in November 2005 and the latter research was conducted in March 2006. The methods of these phases also differed, the pilot research aimed to roughly explore the area of research and the possibility of further explanatory research. The methods of data gathering of this pilot research ranged from semi-structured interviews to e-mail correspondence. The results of this first phase led me to explore the phenomenon of superstardom in the football industry even further. This is because (i) the response was too low to conduct a valid quantitative, explanatory research, (ii) the possible causal factors needed to be explored better in order to conduct a proper explanatory research and (iii) the statistics on wages of football players are confidential (Simmons, 1997: 17), which prevents to get an objective and reliable insight to the valuation of players.

The second phase consists exclusively of semi-structured interviews, which were recorded with a dictaphone and summarized. These summaries were verified by the respondents which ensures their reliability. The date of confirmation is shown in the most right column of Table 1. The results of the empirical research are shown in Appendix B. According to Blumberg e.a. (2005: 193) semi-structured interviews have two main objectives: (i) to uncover the respondents’ perspective and (ii) to get to know whether the respondent conforms to ideas that were suggested in earlier research. Especially the latter is difficult, because it must remain the highest priority to get an objective and valid insight from the respondent’s point of view, without guiding the respondent to ‘desirable’ answers. By organizing these semi-structured interviews it was possible to pose follow-up questions which enabled me to fully explore and unravel the complexities of the phenomenon of superstardom in the football industry (Blumberg, 2005: 294). During the interviews the respondents first explained their view on football superstardom, after which I presented the preliminary conceptual model (chapter 3). This model was evaluated by the several respondents. One thing I did encounter was the unwillingness to discuss financial specifications of individual players or their contracts. This seems like a taboo within the culture of professional football, where this type of information is viewed as extremely confidential. The implications and findings of the empirical research are discussed in the fourth chapter. But first, the third chapter describes the domain of the professional football industry.

R. Woestenenk, s. 1231006 p. 26

3. Domain: Professional Football Industry

S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

3.1. Introduction

This chapter introduces the domain of the thesis, namely the professional football industry. The theoretical background that was presented in the first chapter is projected on this industry, thereby creating a sound image of the context of the phenomenon of superstardom. This chapter is concluded with a preliminary conceptual model which is evaluated empirically in chapter four.

3.2. Selection System of Professional Football

The market for professional football can be described as a combination between a market and an expert selection system, wherein the market selectors can be considered as the most influential. This section elaborates on this description, by analyzing the actors that are being selected and those actors who actually select. The section is ended by describing how a competitive advantage is created within this selection system of professional football.

3.2.1. Selected: Football Clubs

Professional football clubs are scattered all over the globe. The wealthiest clubs are all situated in the region where professional football was invented, i.e. Europe (Deloitte & Touche, 2005a). That is why the focus of this thesis is on these European clubs.

All of the European professional football clubs compete in a national competition. Within these national competitions, the best teams qualify to compete in European competitions. The highest competition to compete in is the UEFA Champions League. This last competition also generates the highest revenues, presumably because it is the most viewed football competition in Europe. To distribute the revenues from the television rights, the UEFA uses a market pool method. This means that these revenues are distributed according to the proportionate value of each TV market, coupled with the on-pitch-performance of clubs participating in the UEFA Champions League that season (UEFA, 2005a; 2005c).

When looking at the global market for football, it can be concluded that there are five national leagues that are the most successful. These large revenue markets take up 54 % of the entire European market, compared to 15 % of ‘non-Big-Five leagues’. The Big Five leagues are the English Premier League, the Italian Serie A, the German Bundesliga, the Spanish Primera R. Woestenenk, s. 1231006 p. 28 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

Division and the French Ligue 1 (Deloitte, 2004). In Appendix C the market pool distribution of the UEFA Champion’s League 2002-2003 is shown. These figures evidentially show the difference between the Big Five leagues, totaling 91,4 % of the market pool, and the non-Big Five leagues who make up for the last 8,6 %. This also implies that the winners of the UEFA Champions League on the pitch might not always be the winners of that competition in an economical sense. Consider season 2003-2004 of the UEFA Champions League, where the eventual on-pitch winner – FC Porto – was not the economical winner. This is because FC Porto earned relatively little prize money ( € 29,980,000 or 11 % of all eight quarter finalists) compared with the other clubs that made it through the quarter finals, like Arsenal ( € 43,258,000 – 16 %) and Real Madrid ( € 29,767,000 – 11 %) (UEFA, 2005c; Appendix D).

As discussed in chapter 1, the experience product of on-pitch-performance is very important for professional sports clubs. To generate even more revenues, clubs are also offering their experience product on other markets nowadays. This market development is often done through broadcasting through - broadband - media, coupled by promotional actions. Manchester United for instance, has estimated its global fan base at 52,7 million people. These are divided over Europe (45,7%), North-America (8,0%), Asia (31,5%) and the rest of the world (14,8%). Manchester United is promoting its brand, by touring the world with their team in the off-season. Hong Kong, China, Korea and the United States were visited on a ‘roadshow’, trying to trigger people to become football fans (Manchester United website, 2004).

Another way to generate more revenues is to diversify the product range of football clubs. Most professional football clubs nowadays not only offer merchandise and paraphernalia, but also catering, security, financial and betting services, next to diverse media products like - online - television and radio (also see Appendix A). In other words: the performance on the football field stimulates the commercial potential of a professional football club.

A relevant example of a football club that is now positioning itself consciously through football performance, combined with branding strategies is Chelsea F.C. This club has been injected substantially with financial resources, which enabled them to set up a team of high quality players, led by a high quality manager. Consecutively, Chelsea is positioning its brand as a fashionable, modern one. Chelsea even refused to renew the contract with its shirt-sponsor, ‘Fly Emirates’, because it believed that the airline company did not relate to the ambitions of the club. Furthermore, the club started branded services in mobile telephony, online shops, mega stores, R. Woestenenk, s. 1231006 p. 29 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

betting services and financial services. Besides this, Chelsea has transformed its stadium grounds into a leisure and entertainment complex housing two four star hotels, five restaurants, conference and banqueting facilities, a nightclub, an underground car park, a health club and a business centre (Thomas, 2004; Chelsea F.C, 2005).\

3.2.2. Selectors: Market and Expert Selectors

The selection system of professional football can be described as a combination of a market and an expert selection system. Figure 3 shows the relation between the football club and both market and expert selectors (also see Appendix A). It has to be noted that the term selectors is chosen in stead of consumers, because (i) the passive selectors do not pay for the experience product of clubs and (ii) the expert selectors do not consume the products of football clubs. This is elaborated further on.

- Fig. 4. The Market and Expert Selectors of Football-

Expert Selection

€

Active Market Selectors Expert Football Selectors Clubs Passive Market Selectors

€

Market Selection

Market Selectors: Active and Passive Selectors

Initially, football was solely selected by the spectators that visited the stadium. I call these the active market selectors . With the development of media and broadcasting technology, this group has expanded with passive market selectors , or as Maandag and Visscher (1993: 14) call them: followers . These are the people that follow the football competition through written or broadcasted media. The active and passive selectors combined form the market selectors, or as Maandag and Visscher (1993: 14) say: primary market .

R. Woestenenk, s. 1231006 p. 30 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

In chapter 1 I have already presented the four product characteristics of the experience product of on-pitch-performance and the five reasons why fans select athletes as their heroes. To complement these I have added Appendix E, which shows the reasons for a football fan to become a supporter of a particular club (University of Leicester, 2002c). For both the active and the passive market selectors ‘locality’ (56%; 41%) and ‘family influences’ (47,7%; 38,6%) were the most common reasons to become a football club’s supporter. What it is very interesting is that the third, fourth and fifth reasons for the passive selectors are respectively: ‘certain player(-s)’ (29%), ‘the way the team played’ (27%) and ‘the club’s image’ (22,5%). These findings are based upon research among 20,470 English football fans before the season of 1995-1996.

The revenues that stem from the active market selectors - the stadium spectators - take a part of 30 % of total revenues for English Premier League club. Another 45 % flows from the sale of television rights (Deloitte, 2004). Hence, the passive market selectors - the television viewers - and the active market selectors collectively attribute the most value to football clubs. However the revenues for television rights do not originate directly from any of these market selectors but from the expert selectors. These selectors are discussed next.

Expert Selectors

The expert selectors are represented by those entities who mostly aim to use professional football clubs (and / or players) for their own motives. These expert selectors consist of mostly corporate entities and are described by Maandag and Visscher (1993: 15) as the secondary market of football. These selectors do not consume the products of football; they either support or broadcast them.

Expert selectors of football consist mainly of those who aim at the market selectors, like television companies, advertisers and sponsors. Especially the income from television rights are an important source of revenues for football clubs. This is because football is the most viewed sport across the world (Sport & Technology, 2004). This in turn means that football offers a very effective option to advertise. That is why television companies are competing to hold the broadcasting rights for football matches: it attracts a lot of viewers, hence advertisers and income. This also entails that the true value of football television rights originates from the interest of the market selectors, i.e. the people who actually watch these matches on television. In other words: without market selectors no expert selectors, but without expert selectors no high revenues from broadcasting companies. Besides conventional broadcasting through television, football clubs R. Woestenenk, s. 1231006 p. 31 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

nowadays also offer their experience product of on-pitch-performance through media like the internet. This way, football clubs try to penetrate new football markets and reach potential fans across the entire globe.

Expert selectors are also involved with the personal endorsements of individual players, as I also mentioned in chapter 1. According to Shank (1999 in: Stevens e.a. 2003), athletes possess the appropriate level of credibility and attractiveness which they can exploit for commercial purposes. That is why multi-national corporations choose professional athletes as their spokespersons and promotional showcase. The value of these commercial contracts can rise to enormous proportions. For example, Nike has estimated its total commitments on sports endorsements for 2004 at $ 338.6 million ( € 269,187,000) (Thomaselli, 2004). Marketing Week (2005: 17) illustrates that: “among adults, Vodafone scores highest with 21 per cent recalling the brands’ association with football, again ahead of Adidas with 18 per cent and Nike with 16 per cent. ”

It has to be concluded that market selectors remain the most important selectors, although the expert selectors generate a lot of financial resources. This is because the expert selectors are driven towards football clubs due to the interest they enjoy from the market selectors. The reasons for these market selectors to select the products of football clubs vary from locality and family influences to the valuation of individual players, collective team performance and of the club’s image. The next section addresses the relation between the selectors and the selected.

3.2.3. Competitive Advantage in Football Industry

This section discusses the interaction between the selectors and the selected. The main topic here is to explain how football clubs achieve a competitive advantage. To do this, I go back to the theory on sports economics that was discussed in the first chapter. This showed the relationship between on-pitch-performance and off-pitch-performance, as well as the strategies of market development and diversification of professional sports organizations.

Table 2 shows the actual figures of wage expenditures, on-pitch-performance and revenues in the Big Five competitions for the season 2002-2003 (Deloitte, 2004; 2005a; 2005b; UEFA, 2005b). With the figures of this table I want to illustrate that the findings of Hoehn and Szymanski (1999) appear to be very plausible. This also corresponds with the research of Leijenaar (2005), who showed the positive relation between revenues and the results in the UEFA Champions League. R. Woestenenk, s. 1231006 p. 32 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

That is why I think that the cycle presented in figure 1 of chapter 1 is very plausible. This implies that increased wage expenditure leads to better performance on the pitch and that improved performance on the pitch leads to increased revenues.

-Table 2. The Big Five Leagues: Wages, Performance and Revenues, Season 2002-2003- National Total Wage UEFA * Total UEFA Total Wage Total 8 Leagues Expenditures Coefficient Revenues Coefficient Expenditures Revenues in Rank in Rank in Rank Sources: Deloitte, (2004; (UEFA, 2005b) (Deloitte, 2004) (UEFA, 2005b) Deloitte, (2004; (Deloitte, 2004) 2005a) 2005a) 1. England 1 2 1 62.153 € 1,200,000,000 € 1,790,000 2. Italy 2 3 2 59.186 € 848,640,000 € 1,162,000 3. Germany 4 4 3 49.489 € 493,920,000 € 1,108,000 4. Spain 3 1 4 79.851 € 607,000,000 € 847,000 5. France 5 5 5 48.326 € 467,000,000 € 689,000 * The UEFA-coefficients are based on the results of football clubs from the corresponding national football leagues, in the European competition over the season 1996/97 to 2000/01. These coefficients determine the allocation of places per national competition for both the UEFA Champions League and the UEFA Cup, i.e. the European competitions that generate the highest revenues (UEFA, 2005b).

To complement the plausibility of the relationship between on-pitch and off-pitch performance, I have added Table 3 on the next page. This table shows statistics of on-pitch-performance, interest from active selectors, brand value and revenues. It is interesting to see that there are clubs with relatively low attendance, but at the same time high brand value and revenues (Juventus, Arsenal, Liverpool and Chelsea). When it is assumed that the stadium tickets of these particular clubs were priced similarly to those of the other clubs, this means it is also plausible that these clubs are not solely dependent on the revenues that are generated by the active selectors. What can be derived from is that these clubs have other sources of revenues, for example by strategies of market development or diversification. The revenues from these alternative sources lead these clubs to continue to invest in the quality of the experience product of football.

However, it is has to be stressed that these figures are not the undisputed evidence of the preceding findings. But it does appear that all of these factors (on-pitch-performance, attendances, brand value and revenues) show a very plausible relationship. Since the focus of this thesis is on the valuation of individual players, it is sufficient to assume that this relationship is in line with reality. The following section addresses the role that individual football players within the professional football industry.

8 Total revenues consist of: match day income, television rights sales, commercial and other sources (Deloitte, 2004). R. Woestenenk, s. 1231006 p. 33 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

-Table 3. Top 15 Clubs in Performance, Attendance, Brand Value and Revenues, Season 2002-2003 - Football Clubs # Quarter Avg. Brand Revenues Avg. Brand Value Total Finals Attendance * Value Attendance Revenues Champions League 9 (1999-2005) In Rank In Rank In Rank (€ million **) (€ million **) Sources: Appendix F (European (Futurebrand, cited in (European (Mortimer 2004) 10 (UEFA, 2005b) Football Mortimer 2004) Football Statistics, 2004) Statistics, 2004) 1. Manchester United 6/6 3 1 1 67,602 288 251.4 2. Real Madrid 6/6 1 2 4 69,232 278 192.6 3. AC Milan 1/6 6 3 3 61,534 197 200.2 4. Bayern Munich 5/6 11 4 5 51,588 149 162.7 5. Barcelona 3/6 4 5 13 66,058 141 123.4 6. Juventus 3/6 22 6 2 39,771 131 218.3 7. Arsenal 1/6 28 7 7 38,042 111 149.6 8. Inter Milan 2/6 5 8 6 61,534 97 162.4 9. Borussia Dortmund 1/6 2 9 12 67,765 85 124.0 10. Liverpool 1/6 19 10 8 43,243 84 149.4 11. Chelsea 1/6 23 11 10 39,770 80 133.8 12. AS Roma 0/6 9 12 11 57,160 60 132.4 13. Newcastle United 0/6 10 13 9 51,923 52 138.9 14. Schalke 04 0/6 7 14 14 60,600 47 118.6 15. Bayer 04 2/6 69 15 >15 22,500 40 ? Leverkusen * Other European clubs within the top 15 high attendances include: Celtic, Scotland; Glasgow Rangers, Scotland; Olympiue Marseille, France; Ajax, Netherlands; Club Athlético de Madrid, Spain. ** (OANDA, 2005) Exchange rate of 25-11-2003 Deutsche Mark - Euro: 0,511; British Pound – Euro: 1,442 3.3. Role of Individual Football Player

The first chapter already showed the importance of individual athletes for clubs that compete in team sports. If a club wants to generate more revenues, it has to invest in the quality of its experience product; i.e. to invest in high-quality players. Other factors might also play a role, like the influence of the club’s manager 11 , but for this thesis the focus remains on the players.

According to the theories on value creation, capture and protection, the employees of an organization often are the source of competitive advantage. This means that those players that are

9 This represents the on-pitch-performance of the clubs over six Champions League periods. For example, Manchester United has reached the quarter finals stage six out of six times, where as Chelsea only reached this stage once during the seasons 1999-2005. 10 Brand value is based on research by Futurebrand, total revenues are derived from Deloitte’s figures. An explanation of how these figures are composed is not included by Mortimer (2004). 11 Dell’Osso and Szymanski (1991) have stressed the importance of football managers by analyzing the performance of Nottingham Forrest manager Brian Clough. Furthermore, there are the success stories of managers like Alex Ferguson winning twenty-four championships in eighteen years, and José Mourinho, winning seven championships in three years (Manchester United F.C. Official Website, 2005; Chelsea FC Official Website, 2005). However, these managers could not have done this without the players. R. Woestenenk, s. 1231006 p. 34 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

aware of the value they contribute can also bargain their way to capture a lot of value. According to the pilot research - the first phase of the exploratory research - the role of bargaining is very relevant for the valuation of football players (Appendix B). This entails that the factor bargaining should also be included in the exploratory research. I will describe this process just a bit more, before this chapter is concluded.

When a player wants to leave his club for a new club before his contract has expired, the player has to compensate his old club for a transfer fee. However, these transfer fees are mostly settled by the new club of a player (Blanpain, 1996). Before the Bosman case appeared to the European Court of Justice in 1995, transfer fees were paid even if the players were out of contract. This entailed that players were ‘owned’ by their clubs, even if their employment contract had ended. After the Bosman ruling was introduced, players could move freely when their contracts had expired (Blanpain, 1996).

Besides the transfer fee, the new club has to negotiate over the matters of the commission of a player’s agent, the signing fee for the player and the future wages of the player, which consists of a basic salary and performance-rated bonuses. The basic salary is a structural reward for the services of a player and sometimes also includes a compensation for the use of a player’s image rights in case of personalized merchandise sales. The performance-rated bonuses are related to the performance of the specific player on the pitch, for example; this can be coupled with the number of goals scored or the number of matches played (Appendix B).

Besides the wages, the club and their player have to agree upon the duration of the new employment contract. Simmons (1997: 17) found that after the introduction of the Bosman Ruling, general contract lengths have raised from two or three years to between five and ten years. This is because clubs become more anxious to protect their investment in players, and players will be keener to protect their ability to realize outside opportunities. In a competitive market, contract lengths should reflect optimal risk sharing, with joint risks for both the football club and the player which include risk of injury, bad form, loss of club status in case of relegation, managerial turnover and other unplanned events (Simmons, 1997).

Sections 1.4.1. and 3.2.3 already showed plausible relations between on-pitch-performance, revenues and investments in players (including players’ wages). According to these statements, it is plausible that high revenue teams are able to afford better and more expensive players who in R. Woestenenk, s. 1231006 p. 35 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

turn further improve the on-pitch-performance which creates even more revenues. This corresponds with winner-take-all markets, where the rich get richer and the poor drop out. Haan e.a. (2001: 15) found that the Bosman ruling stimulated the increasing gap between the large and small market leagues 12 (Haan e.a., 2001: 25). This implies that the Bosman ruling stimulated the effects of winner-take-all-markets.

Football players can become even stronger negotiators because of the influence of their agents. FIFA and national football associations hand out licenses to professionals who assist and guide players through their football career (KNVB, 2006). These official players’ agents can represent multiple players and multiple clubs, which enables them to obtain valuable information about the wages and negotiating processes across the industry. It can be assumed that experienced players’ agents possess the capabilities to identify the level of quality of ‘their’ players, thus the value they can contribute and the maximum salary they can demand.

Besides the negotiation between the football club and the specific player, players can also participate in other commercial activities, for example with expert selectors like sponsors or advertisers. These separate contracts often include endorsement deals, where the player uses a certain product in exchange for money or other services. The commercial / promotional value of individual athletes was also discussed earlier in chapter 1. As long as there is no conflict of interest between the expert selectors of the individual player and the club as a whole, there are no limitations for players to commercially exploit themselves. For example: Manchester United’s striker Ruud van Nistelrooy can not partake in a personal contract with KPN Mobile, because his club has an exclusive deal with Vodafone (Appendix B). Personal contracts can be very lucrative for football players, so it would be interesting to explore whether the same factors are relevant for the negotiations with both the football club and third parties.

When you look at the figures of the collective wages of the English Premier League, it appears that players are becoming more and more aware of their value: since 1991 the wages in the FA Premier League have increased from 44 % to 61 % of total revenues in 2003 (Deloitte & Touche, 2004; Appendix H ). When you zoom in on the division of wages of football players, it also

12 Haan e.a. (2001: 24-25) concluded that the Bosman Ruling led strong-drawing countries (Big Five Leagues) of the UEFA Champions League (C.L.) to become stronger, and weak-drawing countries (non- Big Five Leagues) to become weaker. It had no influence on the competitive balance of the C.L. though. R. Woestenenk, s. 1231006 p. 36 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

appears that a distinction can be made between unproductive, generic and differential players. The differential employees are those few, unique players that contribute significant value to the experience product of the club. Consecutively, a few of these differential players have appeared to bargain their way to wages that are substantially higher than the average wages. According to figures of a Dutch football players union, VVCS (2003), 1 % of the players of the Dutch Eredivisie earns more than € 1 million, 6 % more than € 500,000. In contrast to this: 78 % of the players of the Dutch highest division earn less than € 200,000 and 50 % earns less than € 100,000. This skewed division of wages is also shown in Appendix G. Furthermore, Lucifora and Simmons (2003: 41) found that in the context of Italian football, season 1995-1996: “a player located at the 99 th percentile of the distribution earns more than 10 times as much as players located around the median of the distribution, 45 times as much as those located at the 10 th percentile of the distribution.”

So to conclude: players are becoming more and more aware of the resource dependence of their employers, i.e. the value they contribute to the experience product of their clubs. Supported by both legal regulations and by their agents, they are becoming tough negotiators. Moreover, individual players can partake in separate, lucrative contracts with third parties like sponsors or advertisers. For the objective of this thesis it would be very interesting to see just which arguments are used at the negotiating tables. For example: what are the specific value creating factors which lead players to bargain to high wages? Or are there external influences which enable some players to obtain superstar wages and other players to remain at an average wage level? What is the role of third parties for the total wages?

3.4. Summary and Conclusion

The selection system of professional football can be described as a combination of market and expert selection. The market of professional football appears quite similar to that of a winner- take-all market, where five national leagues dominate the market. These five leagues dominate the market because they enjoy the most interest from both market and expert selectors. Market selectors, both active and passive, are attracted by the experience product of on-pitch- performance. This in turn attracts the expert selectors, who also try to attract the attention of the market selectors themselves. So the on-pitch-performance is an important source of competitive advantage within the selection system of professional football. To generate even more revenues clubs are nowadays also adopting strategies of market development and diversification. This is

R. Woestenenk, s. 1231006 p. 37 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

fuelled by the value of the brands and reputations of these clubs. Nonetheless, it can be assumed that the on-pitch-performance is the starting point of the success of football clubs. This implies that the role of individual athletes is also pivotal for the value that is created by football clubs.

Such dependence on resources, coupled with the implications of the Bosman Ruling and the assistance of professional players’ agents, enable players to take a strong bargaining position. Moreover, the high promotional / commercial value of individual players can lead them to sign very lucrative contracts with expert selectors like sponsors and advertisers.

According to earlier publications, the division of wages among football players is skewed; a small number of players seems to earn substantially more than their colleagues. This confirms the existence of the superstar effect in the industry of professional football. Earlier, the theoretical background of this thesis concluded that three factors lead individuals to superstardom, namely: talent, access to large markets and reputation. Furthermore, a number of characteristics of individual athletes to which selectors attribute value were summed up in the theoretical chapter, namely: athletic skills, personal traits, pro-social behavior, celebrity status, nationality and ethnicity. Moreover, the previous section found that the role of bargaining is also relevant for the valuation of individual football players.

The preceding findings as well as the findings from the pilot research are combined in one preliminary conceptual model that functions as the starting point for the semi-structured interviews with the primary sources of the professional football industry. The preliminary conceptual model shows the factors talent, reputation, access to large markets and bargaining which may lead individual players to football superstardom (see Fig. 5).

Talent reflects the athletic skills of an individual football player; i.e. the technical element of his tacit knowledge. The subsequent aspects are derived from the pilot research (Appendix B). Lucifora and Simmons (2000:50) state that: “... both goal scoring and assists represent ingredients of superstar status... Superstar effects are generated by consumer interest in forward players who frequently score and / or create goals for their colleagues.”

However, Lucifora and Simmons (2000: 44) also state that the documentation of football statistics in Europe is not as extensive as that of for example North-American sports. For example the R. Woestenenk, s. 1231006 p. 38 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

perception of athletic skills by others might also be of relevance. For example the opinion of a coach who selects a player for a national team, may reflect that this player is of high quality. This entails that other factors can also be of importance for the status of football superstars.

- Fig. 5. Preliminary Conceptual Model: Plausible Factors That Lead To Superstardom -

Talent

Athletic Skills Number of: matches, goals (for / against), assists; Specialties (free kicks, throw ins, penalties) Performance in European competition Important performance in the past Proneness to injury Growth potential / experience / age Personal Traits

Bargaining Superstardom Reputation Transfer fee On-pitch-reputation Time pressure to transfer deadline Number of international matches Interest / appreciation of rival clubs Player can bargain his Exposure / appreciation by media Previous salary way to very high wages Appreciation by experts Possibility of adding special clauses compared to his Nomination for awards Commercial / promotional value for colleagues. Off-pitch-reputation third parties (endorsements) Nationality Ethnicity Pro-social behavior: charity activities Celebrity status: merchandise revenues

Access to Large Markets

Playing in English, German, Spanish, Italian or French competition Playing for top club in competition Average salary colleagues Size of club’s fan base

Secondly, the reputation of players is included in the preliminary conceptual model. I have made a distinction between on-pitch-reputation and off-pitch-reputation, because of the difference between aspects like for example national team appearances and celebrity status. Consider the following statement about football players who have evolved to the status of idols: “…Paolo Maldini and Eric Cantona individually provide a better return on investment than Manchester Utd or AC Milan collectively” (University of Leicester, 2002a). Another example of a valuable football reputation is that of the Japanese football player Nakata, who was the sixth highest paid player of the season 2002-2003 (EFE News Services, 2003). He was able to capture this amount R. Woestenenk, s. 1231006 p. 39 S Superstardom in the Football Industry & I -3. Domain: Professional Football Industry-

of value, because he enabled his club to export its experience products to the Asian market. As soon as he was signed by Perugia in 1998, he attracted the attention of Japanese audience to the Italian Serie A. Although Nakata was the sixth highest paid football player in the world, this did not correspond with his performance on the pitch. In fact, of the nine seasons he played in Italy, he only played 128 matches 13 out of a possible 360 matches (Voetbal International, 2005).

This brings us to the third factor, namely the access to large markets. This factor was also mentioned in section 1.5., where it is said that by covering a market in both an efficient and an effective manner, this can lead to the superstar effect. So it would be interesting to see whether the size of the several football markets / competitions influences the phenomenon of superstardom.

Finally, the factor of bargaining was viewed as relevant by the respondents of the pilot research. This is based on the rivalry between football clubs to sign the best players. Aspects that belong to this factor include: the size of the transfer fee that has to be paid, the time pressure until the official transfer deadline and the interest of other clubs. The previous wages and the possibility to include additional clauses to the new employment contract can also be relevant (Appendix B).

The next chapter empirically explores this preliminary conceptual model, by subjecting it to the opinions of experts of the professional football industry.

13 Including substitutions! R. Woestenenk, s. 1231006 p. 40

4. Empirical Findings: Exploring Superstardom

S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

4.1. Introduction

The previous chapter concluded that football some players have succeeded to bargain their way to substantially higher wages than their colleagues. This chapter empirically evaluates the preliminary conceptual model, thereby exploring the factors that have led these players to such high wages. This is done by qualitative research conducted among three player agencies, two football clubs and three independent experts (see chapter 2). Firstly, the operational definition of superstardom is given. Next, the several factors that are likely to lead individual football players to superstardom are discussed. The chapter is concluded with the final, comprehensive conceptual model.

4.2. Football Superstars

The previous chapters mentioned the term ‘superstar wages’ multiple times. This section develops an operational definition that combines the theoretical definitions of the superstar effect (Rosen, 1981) and winner-take-all markets (Frank & Cook, 1995) with the insights of the respondents of the qualitative research. Both the definition of the superstar effect and that of winner-take-all-markets emphasize that a small number of actors dominate their activities which enables them to reap much higher revenues than their rivals. According to the theoretical background (chapter 1), this is caused by three factors, namely (i) talent (ii) access to large markets and (iii) reputation. Furthermore, I have added the factor of bargaining because this determines the amount of value that can be captured by employees (Bowman & Ambrosini, 2000). Collectively, these factors facilitate the dominance of particular actors which leads them to extort enormous revenues.

For this thesis it is essential to stress that the existence of the causal factors alone is not sufficient for an actor to qualify as a superstar. In this perspective an actor can only become a superstar when he is aware of the existence of the causal factors and also uses this knowledge to capture an enormous amount of value. The actors that do not use this knowledge or those that are not aware of the existence of the relevant factors can not dominate their activities, so they are not likely to capture enormous amount value. Thus these last actors do not qualify as superstars, even if the relevant factors are present. So for this thesis the actual value captured by the actors defines their

R. Woestenenk, s. 1231006 p. 42 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

qualification of superstardom; not the presence of plausible causal factors like talent, market access or reputation.

In the case of the professional football industry, this means that only those few players that were able to bargain their way to substantially higher wages than their colleagues are qualified as superstars. The following section explores how individual players succeed in capturing such enormous value, by adopting the following operational definition for football superstardom: Superstar football players are those players that have bargained their way to the top twenty of highest earners within their national or international context.

Firstly, this operational definition can be applied despite any fluctuations in – average – wages of football players, because I have avoided to put an absolute number as a boundary for superstardom. This also enables the application of this definition to multiple contexts. For example, when viewing the Dutch Eredivisie as context of analysis, the minimum wages of a superstar player may be around € 1 million. When this is put into an international context, these wages pale in comparison with the twentieth highest earning player, namely € 5,9 million (see Table 4). Secondly, the boundary of the top twenty corresponds with other secondary sources like France Football Magazine which annually publicizes their impression of the top twenty highest paid players. Thirdly, by avoiding to put an absolute number as a threshold, there is no need to rely on unreliable, secondary sources for data on specific players’ wages. Fourthly, the top twenty players represent the top four per cent of all players 14 , so this corresponds with Rosen’s (1981: 845) ‘relatively small numbers of people’ . Finally, by avoiding an absolute threshold, the respondents of the research were more willing to co-operate. As said in chapter 2, there is a sort of taboo on talking about exact wages of football players, at least in the Netherlands. So when talking about superstar wages as the top twenty high earning football players, I avoided possible blockades. The definition introduced here is also discussed with the respondents 15 (see Appendix B).

14 With an average of 531 players per national football competition, twenty players represent the top four per cent (see Appendix I). 15 However, in the opinion of some respondents, there are even fewer superstars in professional football. This is because these respondents used football technical aspects as a qualification for superstardom in stead of the amount of value the players are able to capture. R. Woestenenk, s. 1231006 p. 43 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

-Table 4. Top Twenty Highest Earning Players Globally Season 2002-2003- Player League Wages 2003 * (in €) Player League Wages 2003 * (in €) 1. David Beckham ENG 15,000,000 11. Luis Figo ESP 8,600,000 2. Zinedine Zidane ESP 14,000,000 12. Gabriel Batistuta IT 8,600,000 3. Ronaldo ESP 11,700,000 13. Sol Campbell ENG 7,300,000 4. Rio Ferdinand ENG 9,620,000 14. Oliver Kahn GER 7,700,000 5. Alessandro Del Piero IT 9,550,000 15. Alvaro Recoba IT 7,600,000 6. Nakata IT 9,360,000 16. Francesco Totti IT 7,300,000 7. Raul Gonzalez ESP 9,300,000 17. Rivaldo IT 7,200,000 8. Christian Vieri IT 9,280,500 18. Thiery Henry ENG 6,100,000 9. Michael Owen ENG 8,900,000 19. Fabio Cannavaro IT 6,000,000 10. Roy Keane ENG 8,650,000 20. Paolo Maldini IT 5,900,000 *Source: France Football Magazine, 2003 in: EFE News Services, 2003

A few superstar football players are also presented in Table 5. In this table I have made the distinction between the basic salary and the commercial income of these superstars. Interestingly, it appears that the commercial income often represents over 40 % of the total wages of global superstar football players. This commercial income flows from several types of activities ranging from sponsorship deals, advertising and book sales. Furthermore, players are also paid by third parties, who are similar to the expert selectors of football clubs. These parties ask these specific players to represent them in one way or another.

- Table 5. Superstars and Their Commercial Activities - Player Year Total Basic Salary Bonuses Commercial Percentage Source** Earnings* Activities commercial act. (€) ( €) (€) (%) Zidane 2002 13,600,000 6,400,000 400,000 6,800,000 50.0 A Raul 2002 8,650,000 6,250,000 400,000 2,000,000 23.1 A Figo 2002 8,500,000 6,100,000 400,000 2,000,000 23.5 A Rivaldo 2002 7,400,000 6,100,000 300,000 1,000,000 16.4 A McManaman 2002 5,560,000 4,760,000 400,000 400,000 7.2 A Veron 2002 5,410,000 4,030,000 170,000 1,210,000 22.4 A Beckham 2003 15,200,000 6,600,000 200,000 8,400,000 56.0 B Zidane 2003 14,000,000 6,400,000 200,000 7,400,000 52.9 B Ronaldo 2003 11,700,000 6,400,000 300,000 5,000,000 42.7 B Beckham 2004 22,400,000 6,500,000 4,500,000 11,400,000 50.9 C Kahn 2004 8,840,000 Not available Not available 2,700,000 30.5 C Ballack 2004 6,570,000 Not available Not available 2,500,000 38.1 C Beckham 2005 25,000,000 6,400,000 200,000 18,400,000 73.6 D Zidane 2005 13,000,000 6,400,000 200,000 6,400,000 49.2 D Ronaldo 2005 19,600,000 6,400,000 200,000 13,000,000 66.3 D Raul 2005 9,300,000 6,400,000 200,000 2,700,000 29.0 D Ronaldinho 2005 8,200,000 4,200,000 400,000 3,600,000 43.9 D Owen 2005 7,500,000 4,300,000 200,000 3,000,000 40.0 D * Total earnings include: Basic salary, bonuses and revenues from commercial activities **Source: France Football Magazine 2002-2005 in: A: EFE News Services (2002) B: EFE News Services (2003) C: Frankfurter Rundschau (2004) D: EFE News Services (2005) R. Woestenenk, s. 1231006 p. 44 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

However, the commercial attractiveness of a specific player does not appear to be valued similarly to their on-pitch-performance. This is derived from a comparison of the basic salaries of the other three “ Galácticos” 16 (i.e. Raul, Ronaldo and Zidane) to that of David Beckham. All four players have a basic salary of € 6.400.000, while their commercial income range from € 2.7 million (Raul) to € 18,4 million (Beckham). This implies that there are different factors that influence respectively the on-pitch value and the commercial value of a football player.

The absolute superstar of the last three years is David Beckham. Beckham started his career at Manchester United in 1993. Beckham then gradually became a superstar due to good performances on the pitch, combined with a fashionable lifestyle, which he shares with his pop star-wife. He is simultaneously idolized and hated by millions because of his glossy status and commercial exploitation (Algemeen Dagblad, 1997). In June 2003, Beckham was sold to Real Madrid, for a transfer sum of € 25 mln 16 (The Times, 2003a). After the transfer, Real Madrid incurred an increase of shirts sales from 900.000 to 3.000.000 shirts (Jose Angel Sanchez, Marketing Director at Real Madrid, in: The Times, 2004a). In March 2004, The Economist states that Real Madrid has already recouped much of the entire transfer sum that was paid. In return for these extra merchandise sales, Beckham receives a compensation for use of his image rights (The Sunday Times, 2003). In April 2005, Beckham also published his biography “My Side” in 2003, which has sold over 800,000 copies in Britain alone (The Times, 2004b). Furthermore, David Beckham has personal sponsorship deals with Pepsi Cola, Adidas, Marks & Spencer, Coty, Vodafone and Gilette which are estimated at £15 million ( € 21,7 million) a year (The Times, 2005a).

4.3. Exploring Superstardom

The preliminary conceptual model presented in chapter 3 is discussed with the respondents of the qualitative research. The summaries of these semi-structured interviews are shown in Appendix B17 . It is important to mention that the following does not concern the negotiations about the transfer fee. The findings below concern the football player’s total wages. These consist of basic salary and performance-rated bonuses which are paid by their clubs and the income of other (commercial) activities which is paid by expert selectors like sponsors or advertisers.

16 The term “ Galácticos” is Spanish for superstars; the nickname of the players of Real Madrid. 17 The input from the several respondents is numbered 1 to 7 which correspond with the numbers of the appendix. R. Woestenenk, s. 1231006 p. 45 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

4.3.1. Talent

Rosen (1981) mainly attributed the large income of superstars to difference in talent. In fact, the talent to play football can be seen as the key value creating aspect for a football player. It all starts with the ability to excel on the pitch, coupled with the right personality say the respondents of the semi-structured interviews. Only after a player has proven himself on the football pitch, he can become attractive for commercial or promotional purposes. Especially in competitions with small revenues, like the Dutch Eredivisie, athletic skills and personal qualities are the most essential factors for a football player’s wages (5, 6, 7).

Athletic Skills

Clubs roam the globe for young, talented players. These players’ qualities are assessed and monitored from the ages of 7-8 (6). In the case of Feyenoord Rotterdam, a platform of football technical experts decides whether a player is good enough for their club (5). However, the level of quality of a football player is hard to assess. Lucifora and Simmons (2000) found that scoring goals and making assists are key ingredients for - superstar - wages (see section 3.3.). According to the general council of Feyenoord, less visible football attributes are of similar importance for the wages of a - superstar - player. For example the ability to follow instructions of the coach is important, as well as defending and making interceptions. The quality of a player also includes the somewhat more abstract aspects of the experience and the growth potential of a player (6). Smaller clubs like FC Groningen deliberately hire young players (20-23 years old), in order to speculate on their growth potential. When a player has grown into an even better player, then he can be sold to other clubs (6). For superstar player the growth potential or experience is less important; they are the peak of their quality (7).

According to all of the respondents, football aspects like the number of matches, goals and assists are relevant 18 . Specific aspects like free-kick skills, previous performance in important matches and proneness to injury can also be of influence to the size of wages. These football aspects can often be coupled to performance-rated bonuses (5, 6). Examples are goal scoring or clean sheets bonuses, win or draw bonuses and bonuses that are earned when a team reaches a certain level in the competition, for example the quarter finals of the UEFA cup.

18 These ‘dry’ statistics are weighed to the level they were achieved: a third division top scorer is not a guarantee for goals in the first division (5). R. Woestenenk, s. 1231006 p. 46 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

It is hard to say which of these aspects are most likely to lead players to superstar wages. There is not one aspect that can be singled out as the key ‘ingredient’ of superstardom. This corresponds with the characteristics of tacit knowledge; it is hard to codify or to transfer. Especially talent represents the technical element of tacit knowledge which enables players to perform heterogeneously. According to the chairman of FC Groningen, Hans Nijland, a player can become a superstar when he consistently plays a decisive role for his club. This means that he makes the difference between a win or a loss in the competition. This can either be the result of scoring goals, but also of making decisive saves, or by making decisive passes or by organizing the tactical play in midfield. It appears that this is similar to the role of differential employees, who were discussed in chapter 1, because these are the key employees that create the competitive advantage for the organization.

Personal Traits

Besides the football attributes, the personality of the player is also of importance. The life-style, mentality and cultural background of a player have to match those of the club (5, 6). In the case of FC Groningen, this means a pressuring, energetic and hard working mentality is desired (6).

According to Stevens e.a. (2003) personal traits include friendliness, humor and intelligence. This corresponds with the personality of a player which can also appeal to a certain audience. For example, if the player acts very flamboyantly or has a lot of flair, this might lead some fans to buy this player’s merchandise. According to Newcomb and Palmeri of Forbes Magazine (1990: 6) it can even be commercially attractive when players act obnoxiously: “bad boys sell” . Although the representatives of Feyenoord and FC Groningen both said that when players appear in a negative spotlight, for example because they are regularly caught drinking in bars, this has a negative influence on the reputation of the entire club (5, 6).

Other characteristics like nationality and ethnicity were categorized by Stevens e.a. (2003) under the term ‘adhesion for other reasons’ and are directly related to market selector’s preferences. On the one hand, a player’s nationality or ethnicity may appeal to other, new markets. This brings football clubs the opportunity to develop new markets, like for example the Asian markets. So this can influence the promotional or commercial value of a specific player. On the other hand, when a club wants to employ a foreign, non-EU player there often are special regulations. For example, in the Netherlands a player that does not have a European nationality should have a minimum wage of 150% of the nation’s average football wages. This is to ensure that clubs only

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sign players because of their quality, not because they are cheaper than the native football players (VVCS, 2003).

In the case of football these characteristics seem to be of minor importance for superstar players. On the one hand, respondents agree that local players are often more popular than foreign players (4, 7). However, when the player becomes very important for the club, through exceptional on- pitch-performance, his nationality becomes less relevant (7). If only local players would appeal to the football audience, then players like Cantona, Van Nistelrooy, Bergkamp and Vieira would never have become so popular and well-paid in England. This can also be illustrated by the case of AC Milan’s Ukrainian player Shevchenko. Although he is not originally Italian, he is a superstar player. Perhaps his nationality has influenced his wages when he first joined the club, but due to excellent on-pitch-performance this is far less influential (4, 7).

The athletic skills and personality of a player reflect respectively the technical and cognitive elements of his tacit knowledge. These characteristics enable players to perform heterogeneously across clubs and possibly to competitive advantage. When a player consistently plays a decisive role, this can lead him to bargain to top wages. A contemporary example of a player with a rising status is Klaas Jan Huntelaar of Ajax Amsterdam. He transferred from SC Heerenveen in December 2005 for an estimated transfer fee of € 9 million (NRC, 2005). He consistently was the key player by scoring important goals at both his old and his new club; respectively SC Heerenveen and Ajax Amsterdam (4, 6).

4.3.2. Reputation

As soon as a player is proving his value on the football pitch, his reputation also improves. Chapter 1 mentioned reputation as a relevant factor for the success of experience products and of superstars. It was stated that it is especially important that the expected quality appeals to the potential selectors. This is anticipated by hiring high-quality players who have proven to be valuable on the pitch before. So players gather an on-pitch-reputation by performing well on the football pitch. Besides the use of reputation on the football pitch, a player’s reputation can also be used for promotional purposes. This can be done by charity services on behalf of the football club or of expert selectors. Moreover, the reputation of players can be exploited commercially; Table 5 already showed the great difference in commercial income of individual superstars. This section discusses the factors that influence both the on-pitch and the off-pitch-reputation of individual football players. R. Woestenenk, s. 1231006 p. 48 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

On-Pitch-Reputation

A player’s on-pitch-reputation is improved when more people acknowledge his football quality or talent. As stated in section 4.3.1., clubs are already scouting players at a very young age. As soon as they appear in national (under 19) selections, they have already been analyzed and monitored by several professional clubs (6). The fact that they have been selected by the official national coaches means that they possess superior football qualities (6, 7). This acknowledgement also entails that clubs that did not know these players before, will then also follow the player more closely (7). Furthermore, if a player can prove that he can effectively handle the highest level of football, for example at a World Cup, then he shows that he is of high quality. This attracts big clubs, thus high wages (7).

The influence of media and experts has a similar impact: an acknowledgement of the football quality of players. When experts like Johan Cruyff openly admire a specific player, this might lead multiple clubs to follow the player more closely (4). However, the representatives of clubs dismiss the influence of media and experts on the value of a specific player. Clubs solely depend on the opinions and analyses of their own technical experts (5, 6). So the media can influence the bargaining position, but not the actual value a player creates on the football pitch. This means that media exposure or the opinions of experts are of minor importance for the valuation of individual football qualities by the football club.

Off-Pitch-Reputation

Besides the value that a player creates on the football pitch, a player can contribute value to the reputation and brand of the entire club. Furthermore, the reputations of individual players can be of commercial value, for example through promotional activities or merchandise sales. The previous section already mentioned the influence of some personal traits on the valuation of football players. When players are presented positively in the media, this reflects positively on the club’s image. Simultaneously, when players consistently appear in a negative spotlight, this has a negative influence on the reputation of the entire club (5, 6).

Clubs try to stimulate pro-social behavior, i.e. acts of sportsmanship and philanthropy (Stevens e.a., 2003). For example, players of FC Groningen regularly visit football clinics (6). Hans Nijland and players’ agent Jan de Visser said these charitable appearances do not influence the

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earnings of a player, whereas journalist Valentijn Driessen suspects that charitable work will become more and more important, following the North-American sports.

The reputation of a football player can also be valuable for expert selectors who seek ways to promote their own services and products (7). Section 1.4. already showed that athletes can perform as excellent promotional ‘tools’, because of their perceived credibility and attractiveness. Another factor for commercial attractiveness might be the nationality of the individual player. Foreign players often offer the possibility to generate revenues in other geographical markets (4, 5, 6). Earlier I mentioned Japanese player Nakata; another good example of a Japanese player is that of Shinji Ono at Feyenoord Rotterdam, who attracted the Japanese media to the Netherlands. However, these marketing opportunities did not compensate the costs of a player that did not appear regularly in the first team. So, although commercial opportunities are relevant when hiring a (foreign) player, football qualities always come first; especially in smaller-revenues-markets (3, 4, 5, 6, 7).

A select number of players has seen their reputation evolve to a sort of celebrity status. According to Stevens e.a. (2003) this refers to the commercial appearances, sport product endorsement and the physical attractiveness of the athlete. Players’ agent Jan de Visser adds to this that there are only one or two players that match his idea of a “football celebrity”. This also has to do with the willingness of the player to step in the public’s spotlight. Some players are only involved in football, whereas others are spotted at fashion shows and movie premiers, and have signed commercial / promotional contracts with all sorts of organizations (7).

With regard to the example of Klaas Jan Huntelaar, it appears that his reputation is following his football performance of being top scorer in the season 2005-06: he was added to the Dutch national squad four months after his transfer to Ajax. Although his reputation will not directly influence his wages, they do offer the opportunity to engage in commercial activities. At the moment Huntelaar has not signed many promotional contracts yet, but he already is involved in charity services (Ajax Website, 2006). It is not unlikely to imagine that in the following months companies will approach him to offer him some sort of commercial deal; especially since he has made an excellent performance winning the European Championship for youth teams in Portugal this Spring. Perhaps when he transfers to a “Big League club”, he will become even more interesting for expert selectors so he will have the opportunity to bargain to global superstardom.

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4.3.3. Access to Large Markets

In chapter 3 I already introduced the Big Five Leagues, where both revenues and wages were substantially higher than in other national leagues. So if a player wants earn high wages, he should be employed one of the (top) clubs in one of the Big Five Leagues. This is also confirmed by the respondents (4, 5, 6, 7).

Within the national leagues, there are also differences in budgets of the several clubs (2, 7). With the arrival of Abramovich at Chelsea, the entire football market changed, simply because he spent more money on players’ wages (7). In the Netherlands, there are three top clubs: Ajax Amsterdam, PSV Eindhoven and Feyenoord Rotterdam (6). Feyenoord has the biggest fan base in the Netherlands, but it has a relatively smaller budget than the other two big club (5). This is because the commercial market is not as big as in other European leagues (5, 7). Moreover, Feyenoord has less financial resources because they have not won the national championship lately (5).

Commercial revenues are not geographically fixed; shirts of various football clubs and players are sold (and bought) all over the globe. According to players’ agent Alex Kroes, football fans in England are more willing to buy – personalized - merchandise items; even at the smaller clubs. In comparison: in the Netherlands, FC Groningen does not even sell personalized merchandise at all (6).

Another major source of income for clubs stems from European competitions like the UEFA Champions League. The chairman of FC Groningen adds that clubs have to play attractive opponents, in stead of opponents from for example Poland. Furthermore, clubs have to be cautious of investing too much, because they can also be knocked out of the competition after only two matches. That is why the players are often rewarded based on their performance when it concerns European competitions (6).

Nonetheless, the fact remains that the clubs with the highest revenues generally can afford to pay players more. This means that the club with the lowest budget is less likely to sign the most talented players. So when applying the operational definition of superstardom, it is most likely to find superstar football players at the clubs with the biggest budgets either in a national or an international context. Looking at the example of Ajax’ Klaas Jan Huntelaar, it can be concluded

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that as soon as Huntelaar transferred from SC Heerenveen, he turned into a superstar football player within the Dutch national competition 19 . So moving to a top club appears to be a pivotal step towards superstardom. The next step can be to transfer to a club in one of the Big Five leagues.

4.3.4. Bargaining

The basic salary and performance-based bonuses combined form the reward that a player earns for his contribution to the experience product of football clubs. The size of these rewards is dependent on a negotiating process between a football club and an individual football player or his agent. Furthermore, clubs and expert selectors can legally seize the brands and reputations of individual players to promote their own products 20 (3). These commercial activities can lead to enormous extra revenues which also reflect on the rewards of those specific football players. The negotiation about the value of the player’s contribution takes place between the player or his agent and the football club and / or third parties like sponsors and advertisers.

Basic Salary & Performance-Based Bonuses

Chapter 3 already concluded that the on-pitch-performance is essential for the success of a professional football club. It would be logical if the amount of value captured by a player is directly related to the value he contributes or creates to the organization. Chapter 1 already showed that this is not entirely true; the amount of value captured is dependent on a negotiating or bargaining process. This bargaining process is then related with the awareness of the value an employee creates. In the case of the experience product of football this can become even more complex; the on-pitch-performance is created regularly, but its true value is hard to predict. In other words: there are no guarantees for a good performance by players. So the valuation of a player is partly based on speculation; the expectation of good on-pitch-performance (6). This expectation of a good on-pitch-performance is derived from a technical analysis by the club’s experts who have observed the player on several occasions (5, 6).

19 According to Leeuwarder Courant (In: Voetbalzone, 2006), Huntelaar received a signing fee of € 2 million euro, besides his basic wages, because he had added a clause to his contract with Heerenveen that promised him 20 % of future transfer fees. 20 Kees Ploegsma jr. adds that the image rights of players are often in the club’s possession; unless a specific player has managed to bargain to capture a share of the revenues that flow from these rights (for example through merchandising sales). R. Woestenenk, s. 1231006 p. 52 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

The most important factor that influences the bargaining process between a club and an individual player is the competition between rival clubs that want to sign this player. In situations where there is little or no demand for a specific player, agents have to visit several clubs to peddle the player’s services. This will seriously deteriorate the bargaining position of the player, thus the size of his future wages (3, 4). However, when several clubs are interested in hiring a specific player then the price of his labor can rise to enormous proportions. Feyenoord’s General Council, Joris van Benthem, adds that this process is hard to approach in a scientific, rational manner. These situations lead players - and their agents - to ideal situations, where they can sit back and let the competing clubs settle a price for the player. This bargaining process is shown in Figure 6.

-Fig. 6. Bargaining Process between Club and Player -

Analysis of (expected) + Interest from + value of specific player rival clubs to by club’s experts employ specific player Bargaining position specific player

Transfer fee Potential merchandising revenues Time pressure (transfer deadline) Possibility of special clauses Previous wages Willingness to bargain of player

Figure 6 shows that the interest of rival clubs is related to their analysis of the (expected) value of the particular player. This value is represented by factors like talent, personality and on-pitch- reputation. Generally speaking, most players’ agents are aware of the wages that are paid by most clubs (4, 7). This is because they represent players of all levels at all clubs (4). Football clubs are less aware of wages that are paid by other clubs, so this is where players have the advantage (5, 6). When a player is looking for a new contract, he will base his demands on the general wages of colleagues and on his own aspirations (4). The wages that a club offers a player is dependent on a budget, coupled with a certain negotiating margin (5, 6). Since most of the players’ agents know the general wages that are paid by the clubs, they offer their players to clubs whose budgets match the wage desires of their players (4). Nijland also adds that clubs sometimes even exceed their negotiating margins, because they expect that the specific player can bring the club to a higher level in the competition.

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Players can bargain their way to superstar wages especially when multiple clubs are eager to sign them. During the interviews, the Dutch phrase “Wat een gek ervoor geeft” has regularly come up (3, 4, 5, 7). This can be described as the interaction between supply and demand, where the demand is far greater than the demand. Alex Kroes even described this with the idea of exceptional players like Ronaldinho who can ask for a blanc cheque; if his current club is not willing to offer him this, there will be may others who will be willing. However, Jan de Visser comments that a club can not afford to value one specific player much more than his colleagues, because this can lead the other players to demand the same salary. That is probably also the reason why Beckham, Ronaldo, Raul and Zidane have the same basic salary (see table 5, section 4.2.).

Besides the rivalry among football clubs, there are also other factors that influence the eventual wages of a football player. First of all, the nature of the transfer is important. Players can either leave their club on a free transfer, but they can also leave after their new club has paid a transfer sum. Especially the players that can be transferred freely are interesting for - new - club. That is why these players often can demand higher wages (3, 7).

Secondly, the potential extra revenues from merchandising sales that may come by employing a very popular player can influence the wages of an individual player. Section 1.4.2. and Appendix A already showed the several products that football clubs can offer. Merchandising products, like for example t-shirts and coffee mugs, generate extra revenues for clubs which they can use to invest in the future. Clubs are able to capture this value, because they often hold the image rights of their players (3). This enables them to exploit the reputations of their players commercially. However, most respondents agree that it is not likely that a player is hired purely for his marketing potential (3, 4, 5, 6, 7). According to Joris van Benthem, this is only relevant when a player is due to renew his contract; then the difference in commercial revenues can be estimated when the player was to leave the club. Clubs can then calculate the commercial value of individual players, for example by keeping track on the figures of personal merchandise sales (4, 6, 7). The sales of personal merchandise can then be incorporated in the basic salary of a player (7). Especially a superstar player can demand that he receives a part of these sales (3, 7). However, these commercial activities of clubs mainly play a role in the big competitions; in the Netherlands these revenues are not substantial (4, 5, 6, 7).

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Thirdly, the remaining time for the official transfer deadline 21 can influence the size of the wages (3). Kees Ploegsma jr. mentioned the situation of PSV Eindhoven in August 2005. That summer, a number of key defenders had suddenly left the club, so these positions had to be replenished with new players. Everyone in professional football was aware of this, so when PSV Eindhoven started the negotiations to hire Michael Reiziger, the market value – hence wages – of this player increased substantially. However, the fact that a player is available so close to a deadline, often means that he is not of superstar quality (7).

Fourthly, adding clauses to the new employment contract can help smoothen the bargaining process. Earlier I mentioned the example of Klaas Jan Huntelaar, who had added a clause which ensured him to captured 20 per cent of his future transfer fee. Other possible clauses are those that are related to the actual performance of a player, represented by performance-rated bonuses. For example, Feyenoord is known to value the performance of players, by adding performance-rated bonuses (5). Also in the case of for example injury prone players, clauses can be added that a player will be rewarded according to the number of matches he plays. A final example of a contractual clause is that of a fixed transfer sum. This was the case of the PSV Eindhoven defender Wilfred Bouma in the summer of 2005. The English club Aston Villa paid the minimum transfer sum of € 5,300,000, which prohibited PSV to resist the transfer (Volkskrant, 2005). The result of such clauses can lead to precarious situations, like I described earlier.

Fifthly, according to Joris van Benthem the previous wages can also be of importance for the bargaining process, because this enables clubs to estimate the increase in wages of a player. Simultaneously, Alex Kroes states that previous wages are of no importance, because the market value of players fluctuates because of the interaction of supply and demand in this football market. The truth will probably lie somewhere in the middle; a player’s previous wages can be used as an indication of his last club’s expectations of the added value of this player.

Finally, the willingness to bargain obviously is an important factor. This has to do with the approach either player or club adopt with regard to the bargaining process. The preference of a player is of great influence; some players prefer to play for their favorite club, although other clubs offer them substantially higher wages (4, 7). Jan de Visser mentioned the example of Arjen

21 In Europe, FIFA permits clubs to transfer players from ... to August 31 st and from January to February (FIFA, 2006). R. Woestenenk, s. 1231006 p. 55 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

Robben who could have joined a top club, Manchester United, in 2004 but eventually could not resist the enormous offer that Chelsea had made.

To recapitulate: the bargaining process of a player’s basic salary and performance-rated bonuses is fuelled by the rivalry among clubs to sign this particular player. Other factors that further influence the wages of a player are the transfer fee, the potential merchandise revenues, the time pressure to deadline, the possibility of adding contractual clauses, the player’s previous wages and the approach or willingness with regard to the bargaining process.

Another great part of a global football superstar’s wages is represented by the income from commercial or promotional activities. The bargaining process between the player and the third parties who demand these activities is discussed next.

Commercial Income

Table 5 of section 4.2. already showed that the global football superstars like David Beckham and Ronaldo earn great sums of money due to commercial or promotional activities. Chapter 1 also described the value a sports athlete has with regard to promotional activities, due to his image of credibility and attractiveness (Stevens e.a., 2003). The bargaining process between expert selectors who wish to employ a football player for these activities is different than the relationship between a club and a player. This process is shown in figure 7.

-Fig. 7. Bargaining Process between Expert Selectors and Individual Player -

Promotional value of specific player; + Interest from + player’s qualities, rival expert reputation and market selectors size of player Bargaining position specific player

Willingness of player Restrictions from player’s club

As stated in Chapter 3, expert selectors are drawn towards football because they are trying to reach their own consumers, namely the market selectors of football clubs. The choice for a specific player is dependent on the player’s qualities, his reputation and the market or competition

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he plays in. Highly exposed players form excellent promotional outlets. Manchester United’s “bad boy” Wayne Rooney is a good example of a player that has performed well on the football pitch and even managed to generate commercial income, despite several negative public appearances. At the age of eighteen Rooney excelled in the English national squad during the European Championships EURO 2004. Consecutively, he transferred to Manchester United for a record breaking estimated fee of € 48 million at the end of August 2004 (The Sunday Times, 2004). Simultaneously he faced allegations of allegations of slapping his girlfriend and visiting prostitutes, coupled with an anger management problem after swearing too much on the football pitch. Rooney’s wages are estimated at € 5,600,000, coupled with sponsorship deals with Nike and Coca-Cola worth respectively € 7,250,000 and € 1,450,000 (Times, 2005b; The Sunday Times, 2006). A bad boy image may not always be appreciated by clubs, but in the case of Rooney it surely seemed to pay off for him.

In section 4.3.3., I already mentioned that some players have seen their reputation evolve to the proportions of celebrity status, due to massive media exposure both on and off the pitch. Combined with the efforts football players invest in charity services and non-profit activities, this will appeal positively to the public. Players’ agent Kees Ploegsma jr. for example commented that it is wise if players work on their reputation with regard to the club’s fans. A player can do this by non-profit actions or simply by showing up at with informal get-togethers with the club’s fans. It can pay off when you are appreciated by the audience. Logically, when a player is liked or loved by the audience, he will become more interesting for expert selectors. In section 4.2., I also added the example of the absolute football superstar of the last years, David Beckham. The following summarizes the commercial value of football players: “Top professional footballers are no longer simply ‘sports personalities’; rather, they are also now television celebrities and cultural icons” (University of Leicester, 2005a). Which company would not want to be represented by a fanatic, winning athlete who also is pro-socially active?

Jan de Visser mentioned the example of Korean player Ji-Sung Park who came to Manchester United; his arrival also created the possibility for the club’s sponsor Vodafone to present itself better in Asian markets. Presumably, this means that it is more interesting to choose clubs and players that come out in competitions that are viewed by large audiences. This also implies that the role of European competitions is especially important for clubs in smaller competitions, because this will bring an audience that is considerably larger than their own original / native

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market. This increasing audience means that they also become far more interesting for expert selectors like advertisers and sponsors.

However, a player is restricted by the interests of his club. When a player’s club has already signed an exclusive contract with for example Vodafone Mobile Telephony, then a player is often forbidden to sign a personal contract with a rival mobile telephony company (7). This can also lead to some precarious situations, like that of the Steve McManaman case. McManaman was under contract with shoe-sponsor Umbro until the year 2000. However, at the beginning of the ‘97/’98 season he was seen wearing Reebok shoes. Subsequently, he faced a legal procedure with a possible prison sentence at stake, because of breaching a ‘High Court promise’ made to Umbro (University of Leicester, 2005a).

One of the main reasons why football players see so much of their income flow from commercial efforts is because they are simply willing to invest their time and reputation into these activities. If a player does not want to become a public figure, than his price will be higher than that of a player that desires to step into the spotlight (7). It is essential to remember that it is not necessary for a football player to engage in commercial or promotional activities. He is a professional football player, so first of all he needs to be employed by a football club. Consecutively, when a specific company wants to be represented by a specific player, than the player can make demands (7). In other words: a player’s livelihood is not dependent on commercial activities.

Moreover, I would want to emphasize that the criteria of football clubs and expert selectors do not appear to be the same. Jan de Visser mentions the example of defender Puyol who is believed to earn the highest basic salary at Barcelona, although others would expect that Ronaldinho, Eto’o or Deco would earn more. This is because the basic wages are mainly based on the on-pitch- performance of a player, whereas expert selectors seek the more ‘media-exposed’, commercially valuable players as their promotional tools. Especially the income from commercial activities has led Ronaldinho to relieve Beckham from his first place of top earners in the global football industry in 2006. His total wages were estimated at € 23 million, of which € 14 million flowed from commercial activities (France Football Magazine, in: Algemeen Dagblad, 2006). This implies that not his on-pitch-performance, but other factors like his off-pitch-reputation appear more valuable with regard to promotional services. Kees Ploegsma jr. adds to this that offensive actions appeal to a wider audience than defensive actions: fewer people will prefer an important interception over a brilliantly scored goal, although they might be of the same importance to the on-pitch-performance. R. Woestenenk, s. 1231006 p. 58 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

4.4. Conclusion

Chapter 3 concluded with a preliminary conceptual model. There are a couple of adjustments needed to eventually end with a plausible conceptual model. First of all, the role of the personal qualities has to be changed. This obviously is the most important characteristic and the role of a player’s personality has to be incorporated. Next, there also appear to be relationships between the personal qualities and the reputation and between the personal qualities and the access to large markets. After all, higher quality players gather a more valuable reputation and are more likely to transfer to markets and clubs with high revenues and high wages.

Furthermore, a distinction needs to be made between on-pitch-reputation and off-pitch-reputation. The first mostly reflects the football qualities of a player (for example international appearances), whereas the latter reflects the reputation in a more promotional way (for example pro-social behavior and celebrity status).

Finally, the process of bargaining has to be divided into (i) bargaining with the club for a basic salary and performance-rated bonuses and (ii) bargaining with expert selectors for commercial income. There is a great difference between these to bargaining processes in practice; players can take more of a demanding role with regard to commercial or promotional activities. These alterations lead to the following final conceptual model of superstardom (Fig. 8).

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- Fig. 8. Conceptual Model of Superstardom -

One of Big Five Leagues Participating in European competition Big club in small competition (budget) Large Large

Markets Size of attendance Accessto

Athletic Pro wess Basic Salary & Bonuses

Decisive actions in past Interest from rival clubs Experience - growth potential Transfer fee Special skills (free kicks) Potential Merchandising revenues Player belongs to Number of goals, assists, Time pressure (transfer deadline) the top 20 of clean sheets Possibility of special clauses highest earning Injury proneness Previous wages footballl players in Willingness of player the (inter-)national Personal Traits competition. Bargaining Commercial income Personality Superstardom PersonalQualities Mentality Interest from rival expert selectors Cultural background Lifestyle Willingness of player Nationalilty Restrictions from club

On -Pitch -Reputation

Appearances national (U19) team Opinions media & experts

Off-Pitch-Reputation

Popularity

Reputation / Pro-social behavior Celebrity status; media exposure

A football player’s wages flow from his club and from expert selectors. Firstly, the club pays the player mainly for his on-pitch-performance; represented by the basic wages and bonuses. These are based upon the athletic skills and personality of a player. A player can bargain his way to superstar wages by ‘simply’ excelling on the pitch. This means he consistently is the difference between a win or a loss on the football pitch. In the competitions with higher revenues, the wages are generally also higher. The reputation of a player can also influence his bargaining position. Players that are regular players of their national teams or are often valued highly by media and experts appear attract the attention of multiple clubs. Furthermore, some players have bargained to capture a part of the merchandise sales of a club.

Secondly, a football player can be an excellent promotional tool. Especially in the larger revenues markets, players have managed to earn a lot through promotional and commercial activities for their club or for expert selectors. This is dependent on his athletic skills, personality, reputation R. Woestenenk, s. 1231006 p. 60 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

and potential market size. Firstly, the athletic skills represent the on-pitch-performance and are highly value by the market selectors. Especially offensive actions can appeal to wide audiences. Secondly, the personality and reputation can appeal positively to market selectors, for example by doing charity services or by adopting a fashionable lifestyle. Thirdly, some players offer the opportunity to access new markets, like Japan or Korea. These players can bargain for high wages, even though their on-pitch-performance may not be exceptional. Moreover, the commercial income of a player is dependent on the willingness of this player. Some players will seize every opportunity to earn something extra on the side, whereas others refuse to do anything for commercial purposes. It appears that the on-pitch-performance is valued differently by the football clubs and by the expert selectors.

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5. Conclusion & Implications

R. Woestenenk, s. 1231006 p. 62 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

5.1. Introduction

The final chapter of this thesis will shortly summarize the findings and concludes with a number of implications. The main research question of this thesis is repeated below: Which factors are most likely to lead football players to superstardom within the selection system of professional football?

5.2. Conclusion

The selection system of professional football can be described as a combination of a market and an expert selection system. Market selectors, both active and passive, consume the experience product that football clubs produce. Expert selectors are those actors that attempt to attract the interest of the market selectors, by using football clubs as their medium. The experience product consists of the actual product that is created by the individual players, i.e. the on-pitch- performance, coupled with the reputation and brand of the club. Selectors choose to consume the experience product of sports based on the expectation of high quality, represented by athletic skills, absolute / relative quality, thrill of victory and the commonality it provides. Characteristics of individual players that are valued by market selectors are athletic skills, personal traits, pro- social behavior, celebrity status, nationality and ethnicity.

Superstar football players are those players that acknowledge that their club depends on their individual contribution to either the on-pitch-performance, to the sales of merchandise items or to both. Players can grow out to bargain to superstardom by consistently performing decisively for their club. They can do this because they possess and use the right cognitive and technical components of tacit knowledge, which are hard to pinpoint or to transfer. When players consistently excel on the pitch, their reputation improves which can lead them to be selected for their national teams and to transfer to a club with in exchange for even higher wages.

Besides the contribution a player has on the football pitch, he can also be valuable through promotional or commercial services. The expert selectors of football clubs can also choose to employ individual football players in exchange for promotional activities. The income from these activities can rise to enormous proportions, as you could have seen in chapter 4. Especially those players that appeal to specific, foreign markets can bargain to an enormous commercial income.

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The most important conclusion of this thesis remains that it is not easy to pinpoint just one or two aspects that lead football players to superstardom. This corresponds with the characteristics of tacit knowledge; it is hard to codify or transfer, but it can simultaneously be the source of competitive advantage. The right combination of athletic skill and personality can lead football players to an important on-pitch-performance. The reputation and market circumstances can then be used by this player to exploit his commercial value. So I have to repeat the conclusion of several respondents of the semi-structured interviews: it all starts with football! Although it appears that expert selectors and football clubs use different criteria when setting the price for a player’s efforts.

5.3. Implications

With this thesis I have attempted to create a comprehensive overview of the professional football industry by combining theoretical concepts from sports economics and from the master of Business Administration programme ‘Strategy & Innovation’.

By applying the framework of selection systems on an industry that is centered on an experience product, I have come to the conclusion that the most important selectors remain the football fans. Many people nowadays doubt the relevance of these fans and say that football is controlled only by expert selectors like Nike, Adidas or McDonald’s. In my humble opinion, the football fans are still the key source of income, although money may not always stem directly from them. That is why I think football club should try to maximize the attractiveness of their football matches, for example by playing offensively or by hiring players with exceptional athletic skills.

With regard to the concept of superstardom I think at least one addition must be made, namely the factor of bargaining. I think this factor is relevant, because a player can only capture the value he has created through bargaining. According to the Rosen’s definition (1981) a superstar is someone who dominates his activities: if a player is not aware of the value he creates or is unwilling to bargain, then he does not dominate his activity, neither does he earn a superstar’s wages. So to me, this appears to be a relevant factor for this concept of superstardom. This is also similar to the concept of winner-take-all markets; the actor with relatively more talent can extort more value.

R. Woestenenk, s. 1231006 p. 64 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

Furthermore, I have made the distinction between bargaining with the club and with expert selectors. It appears that these parties adopt different criteria when determining the value of individual players. Clubs value a player mostly for his contribution to the on-pitch-performance. Moreover, as Jan de Visser also stated: a club can not afford to pay one specific player relatively more, because this will cause feelings of jealousy and injustice with his colleagues who will also demand higher salaries. This explains why the four players of Real Madrid shown in Table 5 all have the same basic wages.

Contrarily, expert selectors appear to select those players with high off-pitch-reputation, because of pro-social behavior or media exposure that has led them to a celebrity status. Advertisers and sponsors choose those players that appeal to their own market. They have to persuade the players with money in exchange for their promotional services. The price of these services is dependent on the demand for this player’s services and of the willingness of this player to cooperate. This implies that football superstars may not always be the best athletes on the pitch, but are excellent bargainers with expert selectors because of their appealing off-pitch-reputation. This corresponds with Adler’s addition (1985) to Rosen’s definition (1981), stating that superstardom can also exist where there is no difference in talent at all: he partly attributed superstardom to reputation.

5.4. Suggestions for Further Research

The exploratory findings above show plenty of room for further research. To exactly pinpoint which factors are decisive for superstardom, an explanatory research is needed. Future research can use the entire conceptual model to test among football clubs, football players’ agencies and expert selectors. This way the most reliable results can be gathered: all parties’ views weighed against each other and are incorporated in one research. However, this type of research is very extensive and time consuming. It took me six months to reach five representatives. Even when you take a possible ‘snowball-effect’ into account, it would still be an immense task to reach enough respondents to come to a valid sample for the football industry.

Another way of doing an explanatory research can be to only include expert selectors as respondents. For example, Table 4 on page 44 already showed that the top players at Real Madrid all earned € 6,4 mln as basic wages. The players’ agents also said that clubs often have a maximum amount of basic wages they pay their top players. Still, some of these players earn considerably more than their colleagues. The differences in these earnings lie at their commercial

R. Woestenenk, s. 1231006 p. 65 S Superstardom in the Football Industry & I -4. Empirical Findings: Exploring Superstardom-

income. When you manage to isolate the commercial income of individual players you would have a valid insight in the extent of superstardom. A way to do this is to try to uncover the commercial income players earn through services for expert selectors. When you assume that these incomes from third parties are a good indication of their extent of superstardom, these figures can be compared to personal aspects of individual players; thus explaining their superstardom. However, the biggest obstacle remains; uncovering individual players’ income in a reliable way. Perhaps the threshold to unveil this financial information is lower for expert selectors though.

There is also an alternative to anticipate the negative response from football clubs and players’ agents. The Rich List from France Football Magazine can be used as starting point for a longitudinal research which can compare the several the top twenty high earning football players with their personal characteristics. The biggest obstacle with this approach is however the validiy and reliability of the data from sources France Football Magazine. This implies that the methods of research of these sources should be investigated, something they will probably not be likely to do.

Perhaps another interesting insight in the concept of superstardom can result in the true factors that lead to superstardom. For example a psychological or sociological approach can explain the link between a player’s personality, his performance – both on and off the pitch – and his popularity among fans. When you take a player’s popularity among fans as a measure for superstardom, this would make data on wages unnecessary. Even from the perspective of this master thesis, a player’s popularity among the market selectors can be a valid measure for superstardom. After all, the preferences of market selectors remain the most important for the commercial performance of the industry of professional football. Or like it is stated in Section 1.4.1.: ‘profits of professional sports clubs can be maximized if the attractiveness of a competition is maximized’.

To conclude my master thesis I would like to stress that football has grown out to be the number one sport on both a social and economical level, because it is has the greatest number of enthusiasts. It can only remain to be the number one sport, when it remains to be the most popular sport. This means that the most important people for football are not the sponsors, not the advertisers, not the television companies, nor the FIFA-associates but the football fans!

R. Woestenenk, s. 1231006 p. 66 Superstardom in the Football Industry S& I -References-

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Appendices

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A. The Products of Sports Organizations

Expert Selectors

Market Selectors: Active & Passive

Experience Product On-pitch-performance

Gate receipts, merchandise, paraphernalia, conferencing, catering, museums, etc.

Catalogue products & Online services like betting, television, financial & mobile services

Broadcasting rights Advertisements, Sponsorship deal

Skyboxes, business seats (Brand-) franchising/ Alliances / network ventures

-Figure A. Mod el of the Source of Revenues for Professional Sports Clubs -

R. Woestenenk, s. 1231006 p. 76 Superstardom in the Football Industry S & I -Appendices-

B. Empirical Research

Here you find everything about the empirical research. As I stated in chapter 3, the initial plan was to conduct an explanatory research, which was preceded by an exploratory pilot research. The pilot research showed that an explanatory research was not the most appropriate / practical plan. However, the information gathered during the pilot research was very useful for the eventual empirical qualitative research. That is why these are incorporated in the thesis.

Below you can find subsequently: list of people approach for the pilot research (B.1.1.), the information that was sent to these people (B.1.2.) and the results from the pilot research (B.1.3.). Next, there is a list of people approached for the further exploratory, qualitative research (B.2.1.), the information that was sent to these people (B.2.2.) and the results from this exploratory, qualitative research (B.2.3.). Section B.2.4. shows the confirmations of the respondents’ inputs.

B.1.1. People Approached For Pilot Research

-Table A. Pilot Research- Players’ Agencies Date Reaction Football Clubs Date Reaction Experts Date Reaction (first) (first) (first) 1. MT&V Sports 11-11-05 Pos. 1. FC Groningen 11-11-05 * Prof R.H. Koning, 11-11-2005 Pos. International University of Groningen 2. Kees Ploegsma 15-11-05 Pos. 2. PSV 11-11-05 Neg. Bert Schaap, 11-11-2005 Pos. B.V. Eindhoven Newspaper Telegraaf 3. Sport Promotion 10-11-05 Neg. 3. Ajax 11-11-05 Neg. Valentijn Driessen, 23-11-2005 Pos. Amsterdam Newspaper Telegraaf 4. SFX Sports 11-11-05 Neg. 4. Feyenoord 11-11-05 Neg. Jelmer Geerds, 11-11-2005 * Group Rotterdam Voetbalprimeur.nl 5. Essel Sports 11-11-05 Neg. 5. AZ Alkmaar 15-11-05 Neg. Gerrit van 14-11-2005 * Management Leeuwen, Clubscout.nl 6. SP International 14-11-05 Neg. 6. SC 15-11-05 Neg. Heerenveen 7. Pro Athlete 14-11-05 Neg. 7. Vitesse 17-11-05 Neg. Arnhem 8. Football Mix 15-11-05 Neg. 8. FC Utrecht 17-11-05 Neg. 9. World Soccer 15-11-05 Neg. 9. NAC Breda 17-11-05 Neg. Consult 10. FIFPro (union) 15-11-05 Neg. 11. Vereniging Van 11-11-05 Neg. Contract Spelers (VVCS) (union) * Positive Reaction, but no contribution to pilot research.

R. Woestenenk, s. 1231006 p. 77 Superstardom in the Football Industry S & I -Appendices-

B.1.2. Sent Information for Pilot Research

Verkorte Onderzoeksopzet

In het kader van de MSc BA Strategy & Innovation van de Faculteit Bedrijfskunde aan de Rijksuniversiteit Groningen verricht ik een afstudeeronderzoek. Bij dit afstudeeronderzoek staat het fenomeen ‘superstereffecten’ centraal. Het doel van het onderzoek is om de factoren in kaart te brengen die het salaris van een superster-voetballer beïnvloeden. Dit zal worden gedaan aan de hand van de onderstaande onderzoeksvraag: “Welke kenmerken van voetbalspelers leiden tot superstereffecten binnen het selectiesysteem van de voetbalindustrie?” . Ik wil hierbij benadrukken dat ik niet de specifieke salarissen van voetbalspelers te weten wil komen.

De onderzoeksvraag wordt beantwoord aan de hand van een verklarend onderzoek dat bestaat uit een pilot-onderzoek dat voorafgaat aan een enquêteonderzoek. Het pilot-onderzoek komt tot stand door middel van literatuuronderzoek, gecombineerd met de kennis van experts uit de voetbalindustrie. De uitkomst van dit pilot-onderzoek is een conceptueel model dat de determinanten van het salaris van voetbalspelers weergeeft. Het conceptueel model zal worden getoetst door middel van enquêtes die worden verstuurd naar zowel voetbalclubs als vertegenwoordigers van voetbalspelers.

In Bijlage 1 staat het voorlopig conceptueel model. Dit model geeft de factoren weer die het salaris van een voetballer beïnvloeden. Deze factoren zijn vervolgens vertaald in meetbare eigenschappen in de tabel onder het conceptueel model. Het pilot-onderzoek heeft als doel dit model te evalueren en aan te passen, zodat dit een zo goed mogelijk beeld geeft van de inputs voor het salaris van een voetballer. Een toelichting van het pilot-onderzoek vindt u in Bijlage 2. De bedrijfskundige concepten die bij het onderzoek worden toegepast zijn onder meer: selectiesystemen (Wijnberg, 1995 22 ), creating en capturing value (Bowman & Ambrosini, 2000 23 ) en het superster-effect (Rosen, 1981 24 ).

Bijlage 1. Voorlopig conceptueel model met bijbehorende eigenschappen

3. Leeftijd

2. 4. Reputatie Contract

1. Loon 5. Talent Superster Nationaliteit Voetballer

7. 6. Grootte van Kwaliteit Markt van Team

-Figuur 1. Voorlopig Conceptueel Model -

22 Wijnberg. 1995. Selection Processes and Appropriability in Art, Science, and Technology. Journal of Cultural Economics . 19(3): 221-235 23 Bowman, C., Ambrosini, V. 2000. Value Creation Versus Value Capture: Towards a Coherent Definition of Value in Strategy. British Journal of Management . 11: 1-15. 24 Rosen. 1981. The Economics of Superstars. The American Economic Review . 71(5): 845-858. R. Woestenenk, s. 1231006 p. 78 Superstardom in the Football Industry S & I -Appendices-

Loon Superster Voetballer 1. Talent 2. Reputatie 3. Leeftijd Voetballers die tot de 20 Aantal: Aantal keren geselecteerd voor (U21) ≥ 28 jaar* topverdieners van hun - wedstrijden internationale wedstrijden competitie behoren. gespeeld - doelpunten - assists - doelpunten tegen Specialiteiten (vrije trap / Aandacht / waardering kranten, ≤ 28 jaar* ingooi / penalties stoppen) magazines en /of televisie Prestaties in Europese Waardering door experts (bv Cruijff) *Onder de veronderstelling competitie dat spelers ouder dan 28 jaar Belangrijke prestaties in Nominaties voor awards (bv. FIFA’s minder hoge salarissen verleden (bv. beslissende Gouden Schoen) kunnen eisen. doelpunten, assists of reddingen. Blessuregevoeligheid Opbrengsten persoonlijke merchandise Opbrengsten sponsorcontracten buiten voetbal Concrete interesse andere voetbalclubs 4. Contract - Transfer 5. Nationaliteit 6. Kwaliteit van Team 7. Grootte van Markt Duur in maanden / jaren Afkomstig uit regio (binnen 50 Prestaties in nationale competitie Inkomsten televisierechten km van club) nationale competitie Hoogte salaris vorige contract Afkomstig uit Europese Unie Prestaties in Europese competities Inkomsten televisierechten Europese competities Flexibiliteit toekomstige Niet afkomstig uit Europese Aantal supersterren in het team Gemiddelde ‘Matchday’ transfer (bv. clausules over Unie Inkomsten per club vastgestelde transfersom) Hoogte transfersom betaald door nieuwe club - Tabel 1. Eigenschappen van het Conceptueel Model-

R. Woestenenk, s. 1231006 p. 79 Superstardom in the Football Industry S & I -Appendices-

Bijlage 2. Pilot-onderzoek

Hieronder staan de vier aandachtspunten voor het pilot-onderzoek, telkens gevolgd door een aantal vragen. A. Definiëren Superster Volgens Rosen (1981) kenmerkt het fenomeen ‘superster-effect’ zich als een situatie waarin een kleine groep mensen een relatief grote som geld verdienen, doordat zij meer talent hebben dan hun collega’s. De superster voetballers zijn dus de voetballers die relatief veel verdienen ten opzicht van hun collega’s. Dit komt overeen met gegevens van de Nederlandse Vereniging Van Contract Spelers. Volgens VVCS (2004) is het jaarsalaris van 78 % van de voetballers in de Eredivisie € 200.000,00 of lager. Dit terwijl 1 % van de spelers in dezelfde competitie salarissen verdienen van rond de € 1.000.000,00. Deze laatste groep vertegenwoordigt dus de supersterren in de Eredivisie.

Voor het afstudeeronderzoek moet ik een duidelijke definitie geven van een superstervoetballer. Ik wil de superstervoetballer gaan definiëren als de voetballers die tot de twintig topverdieners in hun competitie behoren. Op deze manier hoef ik namelijk niets te weten / zeggen over de concrete salarissen die worden verdiend. Dit is immers gevoelige informatie die niet eenvoudig aan de oppervlakte te krijgen is. ▪ Wat is uw idee van een voetbalsuperster? ▪ Hoe kan deze maatstaaf worden aangepast zodat het een meer betrouwbaar / objectief beeld geeft?

B. Evaluatie van het conceptueel model Het conceptueel model dient zo veel mogelijk factoren te behelzen die het salaris van een voetballer kunnen beïnvloeden. Dit model dient als basis van het onderzoek en tevens als uitgangspunt voor het verdere enquêteonderzoek. ▪ In hoeverre moeten deze worden aangepast om een correct beeld te krijgen van de mogelijke determinanten van het salaris van voetballers? ▪ Wilt u de factoren en / of eigenschappen in het conceptueel model die het salaris niet beïnvloeden met rood markeren? ▪ Ontbreken er nog factoren en / of eigenschappen in het conceptueel model? Hieronder een verkorte tabel voor eventuele toevoegingen.

1. Talent 2. Reputatie 3. Leeftijd 4. Contract - Transfer 5. Nationaliteit

6. Kwaliteit van Team 7. Grootte van Markt 8. ………………….. 9. ………………… 10. ………………….

C. Evaluatie meetinstrument voor het toekomstige enquêteonderzoek : Zoals gezegd zal er na het pilot-onderzoek een enquêteonderzoek gestart worden. Hierbij wordt het conceptueel model getest door middel van enquêtes die worden gestuurd aan vertegenwoordigers van voetbalclubs en zaakwaarnemers van voetbalspelers. Hieronder staat een voorbeeld van de vraagstelling van deze enquête.

Verschillende eigenschappen worden hier geëvalueerd, in dit geval: Geheel Geheel “ het aantal selecties voor (u21) international wedstrijden" mee mee oneens eens 1 2 3 4 5 Stelling 1a Het aantal selecties voor (u21) internationale wedstrijden heeft een √ positieve invloed op het salaris van een voetballer 1 2 3 4 5 Stelling 1b Het aantal selecties voor (u21) internationale is een belangrijke √ determinant voor het salaris van een superster voetballer

▪ Ik vraag me af of deze vraagstelling in uw ogen duidelijk is gesteld. ▪ Verder vraag ik me af of een dergelijke enquête ook het beoogde resultaat aflevert: in hoeverre komen volgens u hierdoor factoren van superster-salarissen boven water door deze enquête?

R. Woestenenk, s. 1231006 p. 80 Superstardom in the Football Industry S & I -Appendices-

D. In hoeverre gebruiken voetbalclubs en zaakwaarnemers dezelfde onderhandelingscriteria?

E. Heeft u verder nog vragen, op- en / of aanmerkingen?

Bedankt voor het invullen van het pilot-onderzoek! De resultaten van het onderzoek kunnen eventueel naar u worden opgestuurd, geeft u dit dan alstublieft aan.

René Woestenenk Rijksuniversiteit Groningen Tel. 06-169 345 17 e-mail [email protected]

R. Woestenenk, s. 1231006 p. 81 Superstardom in the Football Industry S & I -Appendices-

B.1.3. Results of Pilot Research

B.1.3.1 Prof. R.H. Koning, Interview and Correspondence, 10-11-2005

Introduction Prof. Ruud H. Koning of the University of Groningen is the first Professor of Sports Economics in the Netherlands. His publications include: ▪ Haan, M., Koning, R., Witteloostuijn, A. van. 2001. Market Forces in European Soccer. In Papnikos, G. 2003. The Economics of Professional Sports and Olympic Games . ▪ Koning, R., Koolhaas, M., Ridder, G. 2003. A Simulation Model for Soccer Championships. European Jouranl of Operational Research . 148(2): 268-276.

Highlighted comments: Written remarks on pilot research paper. ▪ Definition of superstardom; involve talent. More practical: abstract definition: top 20 earners, two most mentioned players of squad. ▪ CM: distinguish on-pitch vs off-pitch aspects ▪ Survey Research; how to cope with non-response. Practical: one small and one big market (NL & Eng) ▪ Tips: e-mail address Bert Schaap Telegraaf. Also try to contact VVCS, VI, FBO and FIFPRO.

B.1.3.2 Bert Schaap, Correspondence / Telephone Interview, 10-11-05 & 22-11- 05

Introduction Bert Schaap is a sports journalist for Dutch newspaper “Telegraaf”. His area of expertise speed skating and cycling. Mister Schaap set contacts with football experts and his colleague Valentijn Driessen.

Highlighted comments (mostly research tips): ▪ Address Valentijn Driessen ▪ Telephone numbers of several primary sources

B.1.3.3. Valentijn Driessen, correspondence 23-11-2005

Introduction Valentijn Driessen is a sports journalist for Dutch newspaper “Telegraaf”. His area of expertise is football.

Comments Geachte heer Woestenenk, ik heb de pilot doorgenomen en het is goed doortimmerd en van mijn kant zonder veel aanbevelingen of opmerkingen. Op één na: ik denk dat de status van de club en de financiele mogelijkheden van de club ook belangrijk zijn bij de bepaling van de supersterren. Tevens kan ook een rol spelen de maatschappelijke invulling die een speler aan zijn status geeft. Vooral in Amerika telt zoiets, maar in Nederland met al z'n uit de grond schietende foundations van een groeiende betekenis.

Tips om mensen mee te laten doen is om ze bij voorbaat al een inzicht te geven wat het voordeel kan zijn als ze de uitkomsten van de betrokken scriptie in handen krijgen. […]

Veel succes verder bij het onderzoek Met vriendelijke groeten Valentijn Driessen

R. Woestenenk, s. 1231006 p. 82 Superstardom in the Football Industry S & I -Appendices-

B.1.3.4. Alex Kroes, MT&V Sports Management, Correspondence, 15-11-2005

Introduction Mister Alex Kroes is a football players’ agent for the company MT&V Sports International, founded in 2000. This is part of the MT&V Group, which was also founded by mister Kees Vos, the first at MT&V to obtain the offical players’ agents license. At the moment MT&V Sports International employs a total of ten people, spread across Finland, Brasil, Spain and the Netherlands. MT&V Sports International represent around eighty players in the Netherlands. Alex Kroes adds that they currently do not employ superstar football players. Some of their top players include: Petri Pasanen (Werder Bremen), Kiki Musampa (Manchester City) and Dave van den Bergh (FC Utrecht)

Highlighted comments ▪ Definition of superstardom: iemand die bij een topclub speelt en die binnen de topclub een vd belangrijkste schakels is van dat team (sportief bepaald) (Philip Cocu bij PSV) iemand die bij een topclub speelt en die een imago heeft wat veel geld waard is (marketing technisch bepaald) (bijv. Beckham of bijv. een chinese speler die een bepaalde marketing waarde heeft ▪ CM: adjustments/suggestions: belangrijkste aspecten samenvoegen in een model (zoals je hebt gedaan), maar mi is de resultante de waarde van de speler... dus wat levert die speler in financiele zin op aan de club.. mi leeftijd 28 jr is niet reeel... het gaat om waarde... of qua sportief (Ronaldinho) of qua potentie (bijv. Rooney) of qua ervaring (Cocu) of qua marketing (Beckham)... leeftijd is niet zo erg belangrijk alleen als t gaat om transfersom... dan wordt dit dikwijls meegenomen, maar niet bij supersterrren mi wordt de marketingwaarde vergeten, de shirts die worden verkocht als een speler voor n club gaat spelen ▪ Survey: de enquete vragen zijn mi niet echt hout snijdend... de echte superster die speelt geen u21 wedstrijden maar gaat al heel snel door naar het A team... uiteraard speelt t aantal interlands mee bij de status van een superster evenals de club waar hij speelt, evenals de positie vd speler, zijn uiterlijk, in hoeverre t gewone volk zich kan identificeren met de ster... etc etc. ik zou eea omdraaien, ik zou eerst de belangrijkste iconen uit t voetbal pakken en verviolgens afvragen waarom ze icoon zijn geworden... waren ze t hun hele leven al en welke eigenschappen hebben ze... wellicht helpt dit....

B.1.3.5 Kees Ploegsma jr., Kees Ploegsma Management B.V., Telephone Interview, 28-11-05

Introduction Kees Ploegsma Management B.V. is a highly respected players’ agency. It was founded in 1995 by former chairman of PSV Eindhoven, mister Kees Ploegsma. The players’ agency employs three agents, i.e. Kees Ploegsma, Kees Ploegsma jr. and Edwin Gorter. They represent over twenty players, including Ronald Waterreus, Barry van Galen and Matthew Amoah. Kees Ploegsma jr. joined the organization in 2004, after having worked for Pro Sport and graduating his MBA in Barcelona.

Highlighted comments ▪ Definition of superstardom: Player has to prove himself at the field first. Next, he can negotiate a price with all the possible factors, including the time pressure for the deadline. The price is often settled at a level that is compared with other players; relative pricing. What can he earn at other clubs.... Age and nationality are very important, although these all are dependent on the individual player (Cocu). Superstar football players are defined according to their football abilities, combined with their ability to negotiate. ▪ CM: The conceptual model shows a complete image of the possible factors. Additions: time to transfer deadline and negotiating experience of football player’s agent Football is a very tough negotiating trade. Valuation varies with image rights, appearance money and bonuses. ▪ Difference agents – clubs: Clubs use ‘staffels’/ scales for players; ranging from very important players to less important players. Players often do not know how much money they generate through shirts sales. ▪ Further suggestions: Image rights often property of the club. Transfer sum also important; if transfer free, players can ask more. Players of lower division sometimes have to peddled across clubs; these players are releatively easy to substitute. Sometimes ‘wat een gek er voor geeft’; due to time pressure and market forces; if a club really needs a specific player, it is going to cost them. R. Woestenenk, s. 1231006 p. 83 Superstardom in the Football Industry S & I -Appendices-

People Approached for Exploratory, Qualitative Research

-Table B. Main Empirical Research- # Date (first) Respondent Organization Description Response Method 1 1-3-2006 Hans Nijland FC Groningen Chairman Pos Semi-structured interview 2 2-3-2006 Serge Rossmeisl Federatie Betaald Legal Associate of Federation of Neg - Voetbal (FBO) Professional Football 3 2-3-2006 Joris van Benthem Feyenoord General Counsel Football Affairs Pos Semi-structured Rotterdam Collective market value of players: interview 4 2-3-2006 unknown Coaches Betaald Employee of Union of Professional Neg - Voetbal (CBV) Coaches 5 2-3-2006 Erik van Leeuwen AZ Alkmaar Press Secretary & Technical Neg - & Marcel Brands Director 6 6-3-2006 Karel Jansen jr. Sport Promotion Players’ Agent Neg - 7 6-3-2006 Jan de Visser SP International Players’ Agent Pos Semi-structured interview 8 7-3-2006 Alex Kroes MT&V Sports Players’ Agent Pos Semi-structured International interview 9 6-3-2006 Paul Foortse World Soccer Players’ Agent Neg. - Consult

B.2.1. Sent Information for Exploratory, Qualitative Research

Geachte heer, Ik ben op het moment bezig met een afstudeeronderzoek over het fenomeen “Supersterren in de Voetbalindustrie” voor mijn studie aan de Rijksuniversiteit Groningen. Het onderzoek is inmiddels tot de laatste fase gevorderd en met uw hulp zou ik het tot een goed einde kunnen brengen.

Het doel van het onderzoek is om een model te maken van alle factoren die invloed hebben op het loon van een superstervoetballer. Ik ben vooral geïnteresseerd in de onderhandelingen die voorafgaan aan het tekenen van een contract. Voor de duidelijkheid: ik ben niet op zoek naar de details van contracten van spelers en al helemaal niet naar de specifieke salarissen van spelers.

Het voorlopige model dat is samengesteld naar aanleiding van een vooronderzoek staat op de volgende pagina. Aan het vooronderzoek werkten onder meer mee: Professor of Sports Economics R.H. Koning, Kees Ploegsma jr. van Kees Ploegsma Management B.V. en Alex Kroes van MT&V Sports International.

Ik zou graag een afspraak met u willen maken voor een gesprek dat niet langer dan een half uur hoeft te duren. Hierbij zou ik het onder meer willen hebben over het voorlopige conceptuele model.

Ik hoop dat u de tijd kunt vinden om mij te woord te staan.

Met vriendelijke groet, René Woestenenk e-mail: [email protected] tel. 06 –169 345 17 Bijlage: Voorlopig Conceptueel Model

R. Woestenenk, s. 1231006 p. 84 Superstardom in the Football Industry S & I -Appendices-

- Fig. 1. Voorlopig conceptueel model: Factoren die leiden tot het loon van een superster voetballer -

Talent

▪ Aantal: wedstrijden, doelpunten voor / tegen, assists. ▪ Specialiteiten (vrije trap / inworp / penalties) ▪ Prestaties in Europese competitie ▪ Belangrijke prestaties in verleden (bv beslissende doelpunten / assists / saves) ▪ Blessuregevoeligheid ▪ Potentie / Ervaring

Reputatie Onderhandelingspositie Superster Salaris ▪ Aantal internationale wedstrijden ▪ Transfersom (of transfervrij) ▪ Aandacht / waardering media ▪ Tijdsdruk i.v.m. transferdeadline ▪ Waardering experts (bv Cruijff) ▪ Vorige salaris ▪ Nominaties voor awards ▪ Interesse van concurrerende Speler behoort tot de ▪ Nationaliteit (bv Aziatisch) clubs topverdieners van de ▪ Liefdadigheidsactiviteiten ▪ Speciale clausules (vaste (inter-)nationale ▪ Opbrengst (persoonlijke ) transfersom, % bij doorverkoop, competitie merchandise verdeling opbrengst imago- rechten) ▪ Opbrengst persoonlijke Grootte van de Markt sponsorcontracten buiten voetbal

▪ Speelt in Engelse, Duitse, Spaanse, Italiaanse, Franse competitie ▪ Speelt bij een topclub/ subtopper ▪ Gemiddeld salaris collega’s bij club ▪ Grootte supportersaanhang van club

R. Woestenenk, s. 1231006 p. 85 Superstardom in the Football Industry S & I -Appendices-

B.2.2. Results of Exploratory, Qualitative Research

B.2.3.1. Alex Kroes, MT&V Sports International. March 16 th 2006

Introduction Alex Kroes (AK) has been a player at AFC Ajax for ten years, before he went to the University of Amsterdam to study Business Economics. AK has also co-operated with the pilot research, shown in Appendix B.2.

Definition of superstardom In AK’s opinion there are only one or two true superstar football players per league or country. These players define themself by their excellent commercial value and their role on the football pitch. Although he also finds the wider definition of superstardom - the top 20 highest earning players – practical, because of the way it can be applicated to multiple contexts.

Conceptual Model / Negotiation Process AK remarks that both the old (pilot) and the new model consist most of the factors that affect a players’ wages. However, these models apply to generic players also; not exclusively the superstar players.

AK states that a player has to prove himself on the football pitch first. Then, he can estimate a desired size of wages for his next employment contract. This is based on personal goals, aspirations and comparisons with other players. With the know-how of an agent, they can select a – number of – clubs that can conform to such demands. After the old and new club have settled a transfer, the employment negotiations between the potential clubs and the player can begin.

The number of clubs that are interested in employing the player is essential here. This is decisive of the role for the player’s agent; either a pull or a push market. The ideal situations for a player is that when multiple clubs are competing for his services; this can lead to wages that are tenfold the size of the previous wages according to AK. The term ‘wat een gek er voor geeft’ was also mentioned. Factors like timing and additional clauses are also of importance. The previous wages are not important in negotiations; this has to do with the ‘few employment years’ of a professional football player and the interaction between supply and demand.

Talent obviously is one of the most important factors for a football player. However, for a superstar player the other factors are also of great importance. Especially the commercial value of a player is important; AK mentions the example of David Beckham, who was transferred from Manchester Utd to Real Madrid mostly because of the value of his reputation off the football pitch. AK also mentions the example of rising star Klaas-Jan Huntelaar, a rising football star who is first creating a name by excelling on the football pitch. Perhaps Huntelaar can use this on-pitch-reputaion for commercial purposes later on. The amount of revenues generated by the sales of merchandise and other promotional acitivities are of great importance for superstar football players. The amount of revenues generated by merchandise should be able to calculate, so this is helpful when making an estimate for the expected wages.

Furthermore, the media and experts like Johan Cruyff also play a role in the market for a players. A player that is openly considered valuable by these parties, attract the interest of multiple clubs. This leads to a pull market for this specific player. According to AK it makes no difference whether players like Ronaldinho want to earn €100 or €110 million over a period of five years. As a figure of speach; these superstar players can ask their clubs for a blanc cheque and if they do not agree, then they can ask another club for a blanc cheque. Finally, nationality is also of imporance for the commercial value of a player. AK mentions the example of Rooney, being a British idol. He also adds that if Sjevtsjenko was Italian, he would probably earn even more, because more Italians would identify with him then. AK suggests to make a distinction between commercial value and reputation. AK also remarks that the amount revenues generated in the market for merchandise in the Netherlands is not too clear, he suggests that clubs can tell more about that.

Suggestions No concrete suggestions for further research or questions to clubs or other players’ agents. AK does emphasize that is very difficult to translate a very complex phenomenon into such a simple conceptual model.

R. Woestenenk, s. 1231006 p. 86 Superstardom in the Football Industry S & I -Appendices-

B.2.3.2. Joris van Benthem, Feyenoord Rotterdam March 22 nd 2006

Introduction Feyenoord is one the three big clubs in the Netherlands. The club has won fourteen national championships, ten national cups, two Dutch super cups, two UEFA cups, one European cup (Champonsleague) and one World cup for clubs. The most recent successes were in season 1999 (national championship and super cup) and season 2002 (UEFA cup) (Feyenoord, 2006). The stadium of Feyenoord, de Kuip, can hold 51,000 fans. Feyenoord’s current top players include: Dirk Kuyt, Salomon Kalou, Jonathan de Guzman and Nicky Hofs. Of these top players, Kuyt is a definite superstar within the Dutch national competition.

Joris van Benthem (JvB) has the function of General Counsel at Feyenoord Rotterdam. He is responsible for all legal activities of the club. This entails that every legal contract that the club agrees to, ranging from employment contracts to commercial activities, is looked over and confirmed by JvB. Furthermore, JvB is the secretary of both the Board of Directors and of the Supervisory Board (Raad van Commissarissen).

Selecting players A technical platform selects players. This platform of experts consists of: scouts, the technical advisor (Wim Janssen), the technical manager and the current trainer/coach (Erwin Koeman) of the first team. They decide whether a player is welcome or not: this is based on the quality of the player; see ‘Talent”.

Bargaining / Offering wages The offered wages are based upon a budget, coupled with a certain margin to negotiate, which is based on the quality of a player. JvB also stresses that the market price of a player (transfer sum & wages) is not easy to define scientifically, because it is not always the result of a rational process. Sometimes the market price for a player is dependent on the principle of ‘wat een gek ervoor geeft’; Feyenoord is not eager to join such competitions to sign a specific player at all costs. It is also important that the player wants to join Feyenoord, and is not only following financial objectives.

The price of a player consists of a possible transfer sum, commission for the player’s agent, a signing fee and the wages of the new player (which consist of a standard salary coupled with performance-rated rewards). Sometimes, when a club really wants to sign a specific player, other rewards are agreed, like a part of the receipts-revenues of a club. However, Feyenoord mostly values the motto of paying for performance (loon naar werken), so the performance-rated rewards are of great importance.

The price is based upon the quality of the player which is determined by the technical platform. Talent remains the most important factor, marketing factors are far less important. Clubs do not acquire players because of marketing reasons; these are complementary. The factor of previous wages is also of interest for a football club; this way they can keep in mind the improvement a player makes financially.

Talent The quality of a player consists of: (i) football-quality, like performance in previous matches and training sessions and (ii) personal qualities like physical attributes (strength, stamina, right/left foot) and mental attributes (‘healthy’ life style, culture). Football quality is judged by the technical platform; this is where aspects of the preliminary conceptual model are interesting. Moreover, the football technical aspects are interesting: the ability to follow the orders of the trainer / coach for example. Not just the obvious aspects of the conceptual model.

It is not true that strikers and forward players are valued more than midfielders or defenders. This is because these players also atttribute value to the performance of the club: although these factors are less visible in layman’s eyes. There are however clubs that have specific budgets for specific positions of players. Furthermore, the ‘dry’ statistics have to be weighed against the level they were performed in: a top scorer in the third division is not a top scorer in the first division.

JvB also stresses that the (expected) quality of players can never be a guarantee for the actual quality of the team. Otherwise, a club could compose its team with those players that are statistically best. But in reality, other – implicit - factors also play an important role, like teamwork, coaching and pure luck.

If a player is known to be prone of injuries, a club can offer a more performance-based contract; if he plays x number of games, he earns x number of bonuses.

R. Woestenenk, s. 1231006 p. 87 Superstardom in the Football Industry S & I -Appendices-

Reputation The reputation of a player is fairly important. This is a result of their talent to play the game. Feyenoord will only sign players they have seen, this means that the opinions of experts or media are of very small relevance. Perhaps that this does attracts more attention of rival clubs, but this does not mean that the value of the player increases in the eyes of the members of the technical platform of Feyenoord. If certain players are in special interest of the media, this might enhance the players’ bargaining position though. Nonetheless, the opinions of media and experts like Cruyff are not important for the valuation of players according to JvB.

The commercial value of a player (the reputation off the pitch), can be interesting. This is especially the case with football players that are already employed at the club, whose contracts can be renewed. The true ‘added value’ can be estimated then. When Feyenoord really wants to keep this specific player, the club is likely to pay more.

The nationality can also be interesting, like with for example Japanese player Shinji Ono. His background offered some opportunities to generate some extra revenues. But this is never the main factor that influences the size of the salary; this remains the talent to play the game. This is also because the revenues that flow from merchandising activities are relatively small in the Netherlands.

Market Access The difference between wages paid by the different clubs in the Netherlands are generally known. When clubs play in an international competition, players can earn more, because this is also coupled with performance- rated bonuses. The possibility to play in a European competition is attractive for a player, because can accompany the interest from even bigger clubs.

Conceptual Model The preliminary conceptual model does show a lot of value creating factors (talent, reputation & market), but it can never be used as a predictive tool for determining wages of players. This is because of market conditions. The model can be handy to keep in mind though; it does represent value creating factors. It all begins with the ability to play football, marketing activities play a complementary role.

Suggestions The talent aspects should be weighed against the level they were achieved.

B.2.3.3. Hans Nijland, F.C. Groningen, March 23 rd 2006

Introduction FC Groningen is one of the smaller clubs in the Netherlands. The club’s highest position in the national competition was third, season 1990-91. The club has also played 24 matches in European competitions; ending just one round before quarter finals in 1988-89. This year, 2006, the club has just opened their new stadium, Euroborg, which can hold 7.300 more fans than the old Oosterpark stadium. Moreover, the Euroborg has more commercial facilities like skyboxes which enable the generation of more revenues. Some of the most famous players that came from FC Groningen include: Ronald and Erwin Koeman, Michael Reiziger and Arjen Robben. FC Groningen’s current top players include: Erik Nevland, Danny Buijs, Arnold Kruiswijk and Gijs Luirink. These cannot be considered as superstar football players within the Dutch Eredivisie though.

Hans Nijland (HN) is the chairman of FC Groningen. His function can be described as the Chief Executive Officer (CEO), who is supported by a Chief Financial Officer (CFO), Erik Mulder, and a management team that consists of a technicial manager (Henk Veltmate), a commercial manager (Geert Kuiper) and a facility manager (Jaap Kruizenga). The executives and the management team have weekly meetings.

Definition of superstardom What is the great difference between a superstar player and an ordinary player? HN: in the Netherlands there are no real superstars. Real superstars are Cruyff, Van Basten, Ronaldinho, Zidane and Maradona. Players in the Netherlands like Klaas-Jan Huntelaar come closest to this kind of level. These types of players are decisive in matches: they can be the difference between a good or a bad result. Either by scoring or guiding other players. If a player is able to perform in a consistent manner, then they are coming closer to the status of superstardom. According to HN a player like David Beckham can not be considered a true superstar player, because he does not consistently lead his team to championship. His value is represented more by his image and by commercial value, not his performance on the football field.

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Selecting players The starting point is the position in which the club needs reinforcement. Next, the selection process is dependent on a number of aspects. Firstly, the quality of the player; the ability to play football. Secondly, the personality of the player has to match with the club’s culture. This means a hardworking mentality, combined with a football style that is energetic, pressuring and enthousiastic. Thirdly, it is preferred that the player is of the ages between 20-23 years, so the club can also sell the player in the future. Fourthly, the on-pitch-reputation of a player on the pitch is interesting; is the player keen and eager to work. Commercial value does not play a role.

Offering wages The offered salary to a player is very dependent on market forces. Especially the competition between clubs leads to high salaries of players. HN thinks the wages paid to players have increased too much, but this a trend that is difficult to tackle, because of the competition between clubs. The club has budgeted a specific salary, accompanied with a margin to bargain. When the competition to hire a player rises, this margin his used. Sometimes the club consciently takes a risk in paying more than the budgeted wages. This based on the expected, added value of this particular player. The risk to hire the specific player when it is assumed that a particular player can lead the club to a higher position in the competition. However, HN does stress that there are no guarantees. HN also says that FC Groningen always strives to have a good team that wins matches because of their collective quality. FC Groningen may not have star players, but does aspire to get results due to combining strengths of players of less quality [teamwork / synergy].

Talent: The position does matter, this has to do with scarcity of competent players. HN mentions the examples of both strikers and leftwing defenders; because there are few competent players in these position, they can bargain for higher wages. Like stated earlier; the football quality of a player is the only true reason for a club to hire a player. A player that does not play, has no value for the club.

Reputation: On-pitch-reputation: When players have played for their national teams, they can be considered valuable: this also attracts more attention, thus competition to hire these players. Media and experts do not play a role: the club only hires players they have analyzed intensively during a longer period of time. Young, talented players are scouted very early. When they have appeared for their national (u19) team, they have already been checked out by several clubs. HN says all talented young players have been spotted at the age of 8-10 years.

Off-pitch-reputation: Also important: when a player is regularly in a negative spotlight, this reflects on the reputation of the club. Players that are regularly involved in fights or drinking incidents are therefore not interesting for FC Groningen. When player are in a positive spotlight, this is attractive for the club. FC Groningen offers football clinics and other charity services with their players for a good reputation. However, these ‘positive players’ are not paid more because of their good off-pitch-reputation. One way to reward these players is to offer them functions at the club when they have retired from professional football. Commercial value is not of importance for FC Groningen. HN says that the total revenues from merchandising can be estimated at maximally € 100.000. In other national competitions this might play a role, not in the Netherlands. At the moment, there are hardly any personalized merchandising at FC Groningen. HN does mention the example of personalized hats for Erik Nevland, of which 4000 items were sold. Nationality might also be interesting, but it always starts with their football skills; if a player never plays, he is of no value to a club.

Market access: In other European competitions, English-Italian-Spanish, the wages are substantially higher. Within the Dutch competition, the top 3 clubs (Ajax PSV & Feyenoord) also pay considerably more than other clubs. These three clubs are followed by clubs like AZ, Roda JC, Twente, Heerenveen, Utrecht. If FC Groningen qualifies for a European competition next season, then the total wages will be increased, because the club will need a broader group of players. The risk is that the club does not get far in this European competition, or plays matches against clubs from lower-revenues-markets like Poland or Russia. A performance-rated reward is a possibility for these extra European matches; although the players are currently also rewarded by their performance (bonuses with wins or ties).

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Suggestions Not only the financial reasons are important for players; the club’s culture and the fans are also important: does a player have a good feeling with the club.

B.2.3.4. Jan de Visser, SP International, April 7 th 2006

Introduction SP International was founded by Rodger Linse who was joined by his brother John and by Jan de Visser. SP International represents over 60 players, of which seven internationals, including Ruud van Nistelrooy, Khalid Boulahrouz, Nigel de Jong and the brothers Kalou.

Jan de Visser (JdV) was a respected football player who left professional football at the end of the season 2002-03. He played 397 matches for AZ, SC Heerenveen and Feyenoord Rotterdam. He joined SP International in August 2003.

Definition of superstardom Superstars are those players that play at least at the level of the UEFA Champions League or World Championships. The ability to be decisive for a team is important; that he can carry his team. Defenders are at least as important as the forward players. Example of defender Puyol at Barcelona; he is the best paid player, but is not viewed as the ‘biggest’ player. Simply put: the top twenty of highest paid players are also the best players by both football and commercial aspects.

Conceptual Model / Negotiation Process Bargaining

Players’ agents can only offer a player to new clubs in the last six months of his current contract. However, in the case of (potential) superstars players, clubs will come themselves. Clubs then inquire about the demands and wishes of the player, with regard to wages and other clauses. Clubs also take commercial value into account; a player can bargain to earn a part of the merchandise sales. However, in the Netherlands this is not relevant. The revenues from the football competitions remain the most important in the Netherlands, although they are also trying to generate more revenues in other markets, like Asia. Only few players have been able to do this; like Ono of Feyenoord. In other leagues it can be interesting to sign players for commercial reasons, besides their football talent. A good example was that of Manchester Utd who signed Korean player Ji Sung Park; this brought commercial aspects of new markets. Furthermore, the club’s main sponsor Vodafone was interested in the Asian market, so this could be combined with the promotion by a Korean player like Park. The Asian markets are particularly interesting for these purposes. JdV does not think that Shevchenko could have earned more if he was Italian, in contrast to the example of Alex Kroes earlier. Perhaps this did play a role when he first came from Dynamo Kiev, but now he has proven to be such a decisive, high-quality player, his nationality will not be of importance.

Third parties play a great role in the wages of a player. By agreeing to contracts with companies like Adidas or Nike players can earn a lot. This mostly begins with the sponsoring/endorsements of sports gear like shoes. In the case of superstars, third parties will approach the players. This means that players can roughly set their own price for commercial activities, dependent on what the third party is willing to offer and on what the player has to do. So the player decides what he will do and for how much, he just has to keep in mind that he does not engage in activities that conflict with the interests of his club. For example; Van Nistelrooy can not sign a contract with KPN, because Manchester United is involved with Vodafone.

Agents generally do know the wages that are paid by the clubs in the top competitions. Players generally know what other players earn. Especially in the bigger leagues the wages of individual players are roughly known. Clubs are also aware of the wages that are paid, especially within the G14, the biggest 14 clubs. Furthermore, these clubs also know when one of their players is being followed by other clubs, so they are aware of the interest of other, even before an offical offer is made.

The term ‘wat een gek ervoor geeft’ is not appropriate for a football player’s wages. Perhaps this is of relevance for the transfer sum. Clubs all have scales on which they value a player; they can not afford to pay one player a lot more than the other top players, because they will then demand a similar salary. The example of Real Madrid is exemplary: Ronaldo, Beckham, Zidane and Raul all earn the same basic salary. If Real Madrid would then offer a new player a higher salary, these other players will also demand a higher salary. There are no blanc cheques offered in professional football.

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Players do not only have financial reasons to choose for a particular club. Their personal opinions and wishes about favorite clubs are definitely relevant. Some players choose for a particular club, competition or trainer even though they can earn a lot more at other clubs or competitions. Furthermore, the status of the club is important. In general, a player is willing to earn less and play at a top club, than earn a lot and play for a small club or small league. That is why Chelsea had to offer enormous wages to high-quality players like Robben. Chelsea was not a top club at the time, and Manchester Utd was also eager to sign Robben. Only by offering a lot more to Robben, Chelsea was able to sign him. At the moment, Chelsea has ‘bought’ a high-quality team, so they will not have to convince players with only money any more.

The player’s contract’s expiration date is also very important. If he can leave on a free transfer, he can demand higher wages. For example Ballack, who moved freely from Bayer Leverkusen to Bayern Munchen and is currently contemplating to do the same.

The time pressure for the transfer deadline is of some importance, but it does not always mean that players will be valued higher. In the case of superstar player this does not matter; they will be signed far before this deadline. The decision to sign a superstar player is not taken impulsively. The example of Reiziger and Ball who came to PSV just before the deadline showed that on the one hand they perhaps could demand relatively higher wages, but on the other hand: players that are still available close to the deadline are not always the highest quality players. The expiration dates of contracts are generally known and publicized, so high-quality players will sign new contracts far before the deadline. The fact that a player is available close to a deadline, often means that he is not of superstar quality.

Talent The revenues from merchandising are dependent on the personal qualities of the player. It all begins with his performance on the football field. Other features, like appearance play a secondary role.

Superstars players are not valued on their experience or potential; they are already at a peak quality. Clubs in the Netherlands might anticipate on the growth of a player, but in the case of real superstars they are already at high quality.

Reputation When a player is a consistent factor in the national team, this will improve his value. Firstly, because his football talent is also acknowledged by other (the national coach). Secondly, because the player can then prove he can handle the highest level of football. Especially tournaments as the World Cup are perfect settings for players to show that they can handle the highest level of football.

If a Dutch player does not play for the Netherlands, he is not a top player, so this will not attract the top clubs with top wages. Simultaneously, if a Dutch player does play regularly for the Netherlands, this will attract top clubs, with top wages. A good example is that of Khalid Boulahrouz, who played at small club in the Netherlands, RKC Waalwijk, but then proved himself in the national team. This attracted the attention of bigger clubs and now he plays for Hamburger SV, the current second placed club in Germany.

Opinions of the media do not influence the valuation of players by clubs. If experts like Cruyff openly admire a young player, this might influence the valuation by clubs. This is more used as a means to defend the size of wages; ‘not only the club thinks the player is good, but also the independent experts’. In the case of superstar players, these opinions of media and experts do not matter at all; their value is undisputed. It does not matter what Cruyff says about players like Shevchenko; he is simply one of the best strikers of the world.

The opinions of the audience does sometimes matter, depending on the club. Feyenoord is known to listen to their fans, whereas PSV simply follows financial reasons.

Pro-social behavior is not interesting for clubs; for third parties this might be relevant. For example the opening of a football court in Amsterdam by Nigel de Jong was co-organized by Adidas.

JdV does not see football players as ‘celebrities’. Only Beckham and one or two other superstars have a celebrity status. So this does not appear to be appropriate. If it is translated into media exposure, this will be more appropiate. This might attract third parties for commercial activities.

Access to Large Markets Another factor that plays a role is the budgets of other clubs. Clubs like Abramovich’s Chelsea are said to disturb the players market, simply because they can offer ridiculously high wages. If other big investors would turn to football, R. Woestenenk, s. 1231006 p. 91 Superstardom in the Football Industry S & I -Appendices-

then this could seriously change the valuation of players. If clubs engage in such competition it could be very dangerous for the club’s financial future. The example of Sport7 is also mentioned; clubs suddenly earned a lot more by the sales of television rights, this led them to offer higher wages to players. Even though this led to an absolute increase of wages, the relative valuation of players remained stable: the best players still earned the most. As soon as the revenues did not increase, this affected the financial status of clubs. The commercial revenues are much higher in England, Italy, Spain and Germany. These are the biggest leagues. Fans in these countries, especially in England, are far more eager to buy merchandise like t-shirts.

Suggestions The end conclusion is that it all begins with football: a superstar player relies on his football talent. If his on-pitch- performance ‘deteriorates’, than he will become less interesting for his club, the football fans and the third parties. For example Ruud van Nistelrooy; he has been one of the key players of Manchester United for years, but currently he is not in the first eleven. This might not be a problem on a short term basis, but on a longer term, this might influence his value. Add the aspects of big investors like Abramovich. Furthermore; the revenues from merchandise sales are part of the basic salary, not of commercial income. Change celebrity status into media exposure.

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B.3. Confirmations by the Respondents

The exact appendices that were summed up in section B.1.3. and B.2.3. were also sent to the specific respondents. This is done in order to ensure the reliability of the analyses of the contributions of the respondents. I have mentioned a reasonable term within they could either refuse or alter the contents of these summaries, namely ten days ending on May 10 th 2006.

-Table C. Confirmations Interviews Analyses Respondent Appendix Confirmation Sent Confirmation Received K. Ploegsma jr. B.1.3.5. April 30th 2006 May 5th 2006 A. Kroes B.1.3.4. &B.2.3.1. April 30th 2006 May 1st 2006 J. van Benthem B.2.3.2. April 30th 2006 May 10th 2006 H. Nijland B.2.3.3. April 30th 2006 May 10th 2006 J. de Visser B.2.3.5. April 30th 2006 May 10th 2006

Addition after request for verification and after presenting a preliminary version of the analysis from Kees Ploegsma jr. on May 5 th 2006

The analysis and conceptual model appear to reflect reality.

A football player can become a superstar primarily based on his football skills; as soon as he has developed these skills he can transfer to bigger clubs and leagues and he can work on his commercial attractiveness. This means his personality should also be in line with these ambitions.

The commercial attractiveness of players like Ronaldinho and Eto’o is considerably higher than of players like Puyol. This is because the ability to score goals is much easier to recognize by the bigger audience. Fewer people will favor a good interception or solid, defensive action over a scored goal or a offensive, technical action.

Furthermore, players can improve their commercial value by improving their off-pitch-reputation. This is also related with the player’s personality. A friendly, open player will appeal to the audience more; which reflects on his commercial value. That is why it is wise to partake in charity events or get-to-gether’s at the players’ home of the club. Kees Ploegsma jr. mentions the example of Dutch goalkeeper Ronald Waterreus who managed to secure a first team position as Glasgow Rangers’ goalkeeper. However, his predecessor, the German Klose, was far more popular among the fans. This resulted in booing and negative cheering from Ranger’s own audience at the first couple of games Waterreus was defending Glasgow’s goal. Although Waterreus was valued more on a football level, resulting in a first team selection, Klose was valued more on a commercial level, because of his popularity amongst the fans. Consecutively, Waterreus is not massively approached by sponsors or advertisers. Hence, Kees Ploegsma jr. suggest that each player should always do something back for the fans; you never know when this can come in handy.

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C. Market Pool UEFA Champions League 2002-03

National League Market Pool - absolute Market Pool - relative 1. Germany € 81,575,000 22.3% 2. Italy € 67,377,000 18.4% 3. France € 65,260,000 17.8% 4. England € 61,912,000 16.9% 5. Spain € 58,567,000 16.0% 6. Netherlands € 10,877,000 3.0% 7. Greece € 4,735,000 1.3% 8. Turkey € 4,393,000 1.2% 9. Norway € 3,765,000 1.0% 10. Belgium € 2,720,000 0.7% 11. Switzerland € 1,924,000 0.5% 12. Russia € 1,673,000 0.5% 13. Israel € 929,000 0.3% 14. Ukraine € 293,000 0.1% -Table I. UEFA Champions League Market Pool Distribution 2002-2003-

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D. Reasons to Become a Football Club Supporter

-Fig. B. The Reason to Become a Football Club’s Supporter (University of Leicester, 2005a) -

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E. Distribution of Revenues UEFA C.L. 2003-2004

11% 1. FC Porto 16%

2. AS Monaco FC

s. Deportivo la Coruna 15% 11% s. Chelsea FC

q. Real Madrid CF

q. AC Milan 10% 10% q. Olympique Lyonnais

q. Arsenal 11% 16%

-Fig. C. Distribution of Revenues among quarter finalists of UEFA Champions League 2003 -2004 (UEFA, 2005c) -

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F. Performance of Top 15 Highest Valued Clubs

1997- 1998- 1999- 2000- 2001- 2002- Number of quarter Clubs 1998 1999 2000 2001 2002 2003 finals or higher 1. Manchester United quarter quarter quarter semi quarter 6/6 final winner final final final final 2. Real Madrid quarter winner semi winner semi 6/6 winner final final final 3. AC Milan - - - winner 1/6 3. Bayern Munchen quarter runner- semi quarter 5/6 final up final winner final - 5. Barcelona semi semi quarter 3/6 - final - final final 6. Juventus runner- semi- - runner- 3/6 up final - - up 7. Arsenal - quarter 1/6 final - - 8. Inter Milan quarter - semi 2/6 final - - final 9. Borussia Dortmund semi- - 1/6 final - - - - 10. Liverpool - - quarter 1/6 - final - 11. Chelsea quarter 1/6 - final - - - 12. AS Roma - - - - - 0/6 13. Newcastle United - - - - - 0/6 14. Schalke 04 - - - - - 0/6 15. Bayer 04 Leverkusen quarter - runner- 2/6 final - - up - -Table II. Performance of the top 15 European clubs in the UEFA Championsleague (UEFA-website 2005b)

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G. The Division of Wages of the Dutch Eredivisie

90 80 200000 70 60 50 100000 40 30 % of players of % 20 10 500000 0 1000000 -10 0 200000 400000 600000 800000 1000000 1200000 Average Wage NL: Wages in Euro € 229,000.00

- Figure D. A Visual Estimation of the Division of Wages in the Dutch Eredivisie (VVCS, 2003)-

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H. The Increase of Wages of the FA Premier

League

-Figure E. The increase of wages of the English Premier League (Deloitte & Touche, 2004: 36) -

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I. Number of Players of Big Five Leagues

German Bundesliga English Premier League French Ligue 1 Club Players Club Players Club Players 1 Arminia Bielefeld 26 1 Arsenal 30 1 AC Ajaccio 29 2 Bayer Leverkusen 23 2 Aston Villa 23 2 AJ Auxerre 31 3 Bayern Munchen 24 3 Birmingham City 32 3 Girondins Bordeaux 25 4 Borussia Dortmund 25 4 Blackburn Rovers 28 4 Le Mans 31 5 MSV Duisburg 25 5 Bolton Wanderers 20 5 RC Lens 29 6 Eintracht Frankfurt 31 6 Charlon Athletic 31 6 Lille 31 7 Hamburger SV 27 7 Chelsea 25 7 FC Metz 38 8 Hannover '96 26 8 Evertton 23 8 AS Monaco 29 9 Hertha BSC 28 9 Fulham 32 9 AS Nancy 26 10 FC Kaiserslautern 27 10 Liverpool 28 10 FC Nantes 30 11 FC Koln 26 11 Manchester CIty 28 11 Olympique Lyon 30 12 FSV Mainz '05 27 12 Manchester United 26 12 Olympique Marseille 32 13 Borussia M. Gladbach 28 13 Middlesbrough 28 13 Olympique Nice 29 14 FC Nurnberg 27 14 Newcastle United 26 14 Paris Saint-Germain 30 15 Schalke 04 26 15 Portsmouth 28 15 Saint-Etienne 24 16 VfB Stuttgrart 26 16 Sunderland 26 16 FC Sochaux 28 17 Werder Bremen 25 17 Tottenham Hotspur 35 17 Stade Rennes 26 18 VfL Wolfsburg 23 18 West Bromwich Albion 25 18 RC Strasbourg 27 19 West Ham United 29 19 Toulouse 27 20 Wigan Athletic 23 20 Troyes 31

Total # of players 470 Total # of players 546 Total # of players 583 Superstars (20) percentage: 4.3% Superstars (20) percentage: 3.7% Superstars (20) percentage: 3.4% Avg # of players per team 26.111 Avg # of players per team 27.3 Avg # of players per team 29.15 # of superstars per team: 1.1111 # of superstars per team: 1 # of superstars per team: 1

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Italian Serie A Spanish Primera Division Club Players Club Players 1 Ascoli 23 1 Alaves 30 2 Cagliari 21 2 Athletic de Bilbao 26 3 Chievo 21 3 Atletico Madrid 28 4 Empoli 25 4 Barcelona 25 5 Fiorentina 26 5 Cadiz 26 6 Internazionale 27 6 Celta de Vigo 25 7 Juventus 25 7 Deportive la Coruna 26 8 Lazio Roma 31 8 Espanyol 23 9 LEcce 31 9 Getafe 26 10 Livorno 23 10 Malaga 27 11 MEssina 31 11 Osasuna 27 12 AC Milan 24 12 Racing Santander 21 13 Palermo 29 13 Real Betis Sevilla 27 14 Parma 26 14 Real Madrid 32 15 Reggina 20 15 Real Mallorca 25 16 AS Roma 30 16 Real Sociedad 24 17 Sampdoria 32 17 Real Zaragoza 24 18 Siena 24 18 Sevilla 29 19 Treviso 27 19 Valencia 27 20 Udinese 32 20 Villareal 31

Total # of players 528 Total # of players 529 Superstars (20) percentage: 3.8% Superstars (20) percentage: 3.8% Avg # of players per team 26.4 Avg # of players per team 26.45 # of superstars per team: 1 # of superstars per team: 1

Average number of players per league 531.2 Average percentage of superstars 3.8%

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