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The GAIN LINE Report #17 December 2015
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The Financial Impact of Cohesion
There is no doubt that when a sporting team maintains ongoing success on the pitch it should translate into sustainable success for the business.  This can come in many ways: membership, sponsorship, broadcast revenue, apparel, corporate hospitality etc. Some teams have been able to take this to a level where they can compete with some of the largest brands on the globe. Brands like Manchester United or the All Blacks do not feel out of place with Brands like Nike or Coke. However, the inherent nature of high cohesion has the ability to deliver increased and varied revenue streams.
 
This is where understanding the Value of ongoing success is so important. While the 23 All Blacks that won the Rugby World Cup final each have a specific salary, it’s their value as a unit that is significant. Think about the All Blacks current combined salary, now just imagine if the entire 23 went on the global open market – what would their combined salary be then? The ongoing success of the All Blacks has created a perceived value of the players based on the success of the team.
 
This scenario has been played out in different ways. There are plenty of stories across the sporting landscape of successful teams taking pay-cuts or not taking pay rises to enable groups to stay together. This happens when the perceived value of the players increases because of the success of the team. Market forces naturally force the price up for the successful players, however the perception of individual success is caused in part by team success.
 
In the 2000’s a very successful Australian Rugby League Team went through this scenario. Senior players chose to maintain their salary to enable the group to remain under the salary cap. However, this scenario could not be sustained and a number of the senior players eventually moved on.
 
While this seems to be a natural phenomenon that occurs as players progress through careers and through successful teams there is no reason why it can’t be used as a potential revenue stream within a sporting team. 
 
Our analysis has shown that more cohesive teams have the ability to increase the skill of players more efficiently than non-cohesive teams (see The Juggler Effect). The difference between clubs that can bring their juniors/academy players through and those that can’t is often about cohesion of the 1st Team, not the actual players or quality of the academy program. The comment “the players coming through aren’t good enough” is often the answer when there isn’t an understanding about why new players can’t work in with a senior team. More than likely it’s because that senior team is not cohesive. GAIN LINE recently spoke with a traditionally very low-cohesive English football team that has been in a cycle of promotion and relegation in the top tier of English football. In the last 16 years they have only had 1 player go through from their academy programs into their 1st Team. This team is getting neither value for money from their academy players nor return on investment. This is a function of being a low cohesion team.
 
How does this scenario play out in a productive way? If we look at the Premier League as an example, there are revenue streams available via player transfer. The Premier League is a very fluid market with many player movements between clubs. It is common knowledge that the Premier League, since its inception in 1992/93, has become more and more fluid. In that time the average salary has increased by 2800% and through no coincidence average cohesion has dropped by over 30%.
 
High cohesion teams have the inherent ability to up-skill players, whether that is players from in-house academies or players from outside sources. As the skill of the player increases the perceived value of the player also increases. Along with this comes the perceived increase in skill associated with being involved in a successful team. It is almost a mirage of skill so to speak caused by the cohesiveness of the team. With the actual and perceived increase in skill a potentially higher transfer fee will reflect the perception of the player in the market place, and subsequently a significant return on investment to the transferring club.
 
In saying this, we are not proposing that football clubs turn themselves into player factories. What we are saying is that through the inherent nature of high cohesion, clubs can benefit from the natural fluidity of the Premier League, and professional football in general. Not only do the clubs get value for money by player performance on the pitch but they also gain significant return on investment if a player is traded.
 
While not all sporting clubs have the opportunity to obtain revenue from the trading of players, cohesion still offers the ability to gain value for money by being able to get the best out of the player and the subsequent flow on benefits into the team and organisation.
In November GAIN LINE's founder Ben Darwin spoke at the final Melbourne Rugby Business Network event for 2015. Ben took the audience through the work of GAIN LINE and how his experiences as a player influenced his work in cohesion analytics.

"Feedback of Ben’s highly interesting and entertaining speech has been incredibly positive and the RBN was very grateful that Ben could take time out of his busy schedule to share his wealth of knowledge on the subject"

The Rugby Business Network is a global not-for-profit organisation that connects business people with a passion for rugby. The RNB hosts events around the world. Click here to search for an event near you.
 

GAIN LINE is an operations and management consultancy with a unique perspective on success in professional sports. We believe great teams are more than just the sum of their parts; we believe great teams are the product of the linkages and connections within their playing group. As such, we help clubs build these linkages and connections with a view to sustainable, long-term success both on and off the field. As distinct from other firms in the industry, GAIN LINE places a strong focus on data analysis and quantitative research. This means we offer our clients solutions that are grounded in evidence and real-world experience.

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