Pay & Performance in Sports

– flops and successes

In 2018, Juventus FC announced that they had reached an agreement with Real Madrid FC to purchase one of the most popular players in the world, Christiano Ronaldo.

At the time of the announcement, the fee was undisclosed, but it was obvious that it would be up with the highest transfer fees ever paid as a result of his well decorated career – Ronaldo is a five-time winner of the Ballon d’Or. It has since emerged that the cost to acquire his services was approximately €120 million for a four-year deal. At 33 years old, this may have seemed foolish to some, however, his inclusion in the team has not only been matched by superb performances (22 goals and 7 assists in 35 games) but also seen Juventus FC’s share price double during his time at the club. This means that the market capitalisation of the club more than doubled from €670 million in July 2018 to €1.47 billion currently – an increase of €800 million for a cost of €120 million.

These numbers suggest that acquiring Ronaldo’s talent was a masterful piece of business by Juventus FC but this is not always the case in the world of sport, as we shall see in this article.

The Indian Premier League (IPL) recently began its 12^th Edition. It is known as the most lucrative cricket tournament in the world and as such has attracted the attention of the majority of the cricketing fraternity. This has created a very competitive process during the IPL auction, where players are bought and sold as teams seek to acquire the best available talent. As with most other sports, popularity and talent do not always combine to equal positive performance which has resulted in a few ‘flops’ (bad value purchases) over the course of its 12 year history. Conversely, some exceptional purchases (good value) have also taken place. A few cases of these occurrences have been detailed below.

Flops – Bad Value Purchases

Tymal Mills – The left-arm English fast bowler came into the tournament with a commanding reputation as a T20 specialist that could bowl in excess of 150 km/h. A bidding war ensued and he was purchased by the Royal Challengers Bangalore for approximately USD 1.7 million in 2017. Unfortunately, this turned out to be the highlight of his tournament as his performance did not come close to expectations. He played only five matches before being dropped from the team and only took five wickets. In a complete reversal of fortunes in 2018, he went unsold in the auction as none of the teams bid on his talent.

Glen Maxwell – The Australian batting all-rounder also known as “The Big Show” was purchased for approximately USD 1.75 million in 2018 by the Delhi Daredevils (now Delhi Capitals). Unfortunately, “The Big Show” didn’t realise his potential that season and could only contribute a meagre 169 runs in 12 matches, including a run of 5 consecutive single digit scores. He returned to his supreme best during the international season later that year but his IPL was well below par by his standards and the fan’s expectations.

Ben Stokes – The trailblazing English all-rounder commanded a final bid of approximately USD 1.8 million in 2018 from the Rajasthan Royals. Stokes is world renowned for his ability to single-handedly turn the direction of any match with bat or ball in hand (and he is an exceptional fielder), however those moments did not materialise in 2018. He struggled for form with both bat and ball and floundered to a tally of 196 runs and 8 wickets in 13 matches that season. This fell far short of his potential and public expectation.

Exceptional Purchases – Good Value

Shaun Marsh – He was an unexpected purchase in 2011, known more for his powers of concentration than ability to blitz a bowling attack. He was purchased for USD 400 000 by the Kings XI Punjab and astonished the crowds with his flare and control whilst attacking the opposition bowlers. He finished the tournament with 504 runs at an average of 42 runs per innings and a strike rate of approximately 1.5 runs per ball faced.

Sunil Narine – The West Indian mystery spinner was purchased for USD 700 000 in 2012. A somewhat unknown quantity on the international stage, (having only recently made his international debut) Narine ensured that he became a household name as he earned himself the player of the tournament award. He took 24 wickets at an economy rate of less than a run a ball (5.47 per over) and bamboozled most batting line-ups that opposed him.

Mustafizur Rahman – Also known as “The Fizz” is a left-arm fast bowler from Bangladesh and was purchased by the Sunrisers Hyderabad for USD 206 000 in 2016. At the age of 21, he bowled with the cunning and guile of a man twice his age as he tricked batsmen with his assortment of variations. He bowled economically during key moments of the game and contributed 17 wickets to the team that season.

The above examples indicate that although talent and reputation influence the demand for players within the IPL (known as tournament theory), the price paid does not guarantee performance. Sports stars are human and have times when they thrive and times when they struggle. Attracting the right talent – whether it is in a sports team or a business – is crucial but does not guarantee performance.

A number of factors such as the role of the individual, team culture and personal matters influences a person’s ability to perform. In other words, the ability to perform is influenced by more factors than purely talent and reputation.

Attraction is only one part of the puzzle when building a strong team. How the team work together and perform is the real trick in assembling a quality team whether it is in the workplace or on the sports field.

Written by:

Bryden Morton
Data Manager
B.Com (Hons) Economics
[email protected]

Chris Blair
CEO
B.Sc Chem. Eng., MBA – Leadership & Sustainability
[email protected]