The Performance of Football Club Managers: Skill or Luck?

ICMA Centre Discussion Paper in Finance No. DP2011-24

29 Pages Posted: 21 Nov 2011 Last revised: 15 Dec 2011

Adrian R. Bell

University of Reading - ICMA Centre

Chris Brooks

University of Reading - ICMA Centre

Tom Markham

University of Reading - ICMA Centre

Date Written: November 21, 2011

Abstract

This paper evaluates the extent to which the performance of English Premier League football club managers can be attributed to skill or luck when measured separately from the characteristics of the team. We first use a specification that models managerial skill as a fixed effect and we examine the relationship between the number of points earned in league matches and the club’s wage bill, transfer spending, and the extent to which they were hit by absent players through injuries, suspensions or unavailability. We next implement a bootstrapping approach to generate a simulated distribution of average points that could have taken place after the impact of the manager has been removed. The findings suggest that there are a considerable number of highly skilled managers but also several who perform below expectations. The paper proceeds to illustrate how the approach adopted could be used to determine the optimal time for a club to part company with its manager. We are able to identify in advance several managers who the analysis suggests could have been fired earlier and others whose sackings were hard to justify based on their performances.

Keywords: English premier league, football manager performance, fixed effects, bootstrap

JEL Classification: C23, C25, M12, G11

Suggested Citation

Bell, Adrian R. and Brooks, Chris and Markham, Tom, The Performance of Football Club Managers: Skill or Luck? (November 21, 2011). ICMA Centre Discussion Paper in Finance No. DP2011-24. Available at SSRN: https://ssrn.com/abstract=1962574 or http://dx.doi.org/10.2139/ssrn.1962574

Adrian R. Bell

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom

Chris Brooks (Contact Author)

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom
+44 118 931 82 39 (Phone)
+44 118 931 47 41 (Fax)

Tom Markham

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom

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