Splashing the Cash20 Sep 2013
Another crazy summer of football transfer finally ended a couple of weeks ago. And this year has seen the summer spending by English clubs reach a new high of £630 million, a massive 29% rise from last year’s spending. And this surge in spending was not independent to the UK, with a whole series of massive transfers occurring all over Europe. The top ten transfers across Europe amassed to £455.5 million alone, including the record transfer of Bale to Real Madrid for a staggering £86 million. And these are just the transfer fees, this doesn’t even take in to account the massive amounts spent on wages, signing on fees, contract settlements, and agent fees.
This has sparked a debate over whether this spending big to win strategy has got a bit out of control and become damaging to the game. Largely because this strategy has not always proved to be a successful one, with clubs often being lumbered with expensive ‘flops’ tied to long and expensive contracts. No one needs reminding of the catastrophic demise of teams like Leeds and Portsmouth who not only dropped down leagues but almost disappeared from existence entirely after risking huge wages on footballing success they simply failed to achieve. And unfortunately for OpenCRM’s local team Darlington F.C., this nightmare became a reality when they folded completely in 2012 to then be reformed in the lowly Northern League under the new name Darlington 1883.
However this issue isn’t just localised to the sport of Football. This topic also makes me look back to my old stomping grounds across the Atlantic in Philadelphia and my beloved NFL team the Philadelphia Eagles. In 2011 they spent big in free agency signing big names like Nnamdi Asomugha, Jason Babin, Cullen Jenkins, Vince Young and Dominique Rodgers-Cromartie, creating a lot of buzz with the fans, putting together what was then referred to as…. ‘The Dream Team.’ They hoped this would help them make a big push for the Super Bowl, however that year they failed to even make the Playoffs, the first time since 2007. The following year they then posted an even worse record of 4-12, their worst in over a decade! Fast forward two years and none of those ‘Big Name’ signings remain on the Eagles roster, nor do their top three draft picks from that year.
Important lessons can be learned from these sporting mishaps. A lesson that spending big and fast on ‘big names’ doesn’t always create immediate success, and in some cases could actually do the opposite. Whether it’s an ambitious investment, a large intake of new staff, or a massive marketing campaign, it’s always wise to take the time and carefully evaluate what options are available and what will create the most value and ROI for your business. A good example of this, sticking with the theme of sport, is the Oakland A’s team of 2002 in the MLB. When losing their three biggest names to bigger and richer franchises, instead of splashing the cash to replace them, they were replaced with carefully selected alternatives who fulfilled their needs at reasonable prices. And in doing so they won their division, recorded a still unbeaten record win streak of 20 consecutive games, and came within a game of reaching the AL Championship Series. This shows that you don’t always have to ‘splash the cash’ to achieve success, and by taking the time, you can find exactly what you need for a price within your means, and still achieve the success you are striving for!
Before I got my start in the tech industry as part of Apple’s UK Mac launch team, I was a professional drummer (notice I didn’t say musician). But once I got in, I was hooked and I’ve been involved in the tech industry, primarily software development, for over 35 years. I founded this company and I now have the enviable title of System Architect (as well as Managing Director) here at OpenCRM.