An ESPN article discusses how the quality of a coach affects the performance of teams in the US Major Soccer League. The recent paper by Thomas Peeters, Sports Economist at Erasmus School of Economics, shows this influence to be small.
In the paper of Terviö, mediocre superstars are defined as people with mediocre skills, but operating at important and visible parts of their market. The reason that they are able to maintain these positions while there are other, unknown but more talented people, is because of their visibility and the fact that they are already possessing important positions: because companies know what they get when they employ these people as CEOs, coaches or managers, they are more wanted and on the shortlist of ‘safe bets’. Others don’t get the opportunity to show their worth, until the former mediocre superstars retire. However, since these people are comfortable with their position and salary, this takes a very long time. To mention Dick Advocaat again: he is 73 years old, but still active and very wanted as a football coach. Peeters' new paper, 'The Survival of Mediocre Superstars in the Labor Market', shows that this preference for security and stability exists mainly among football clubs with limited budgets.
Eureka moment
When Peeters read the paper, he experienced a Eureka moment: according to Peeters, the football industry seems to exactly follow this theory at first glance. Football players are constantly scrutinized, meaning that they have to be the best players to be part of a reputable football team. However, it seems that most coaches are quite old and not that great. To examine this, Peeters used a dataset describing the performance of English football clubs and their trainers in the previous 40 years. This is the best proxy of performance, since the football industry doesn’t lend itself for double blind experiments in which new, unexperienced trainers are allowed to start their career in prestigious divisions.
The data seems to be in accordance with Terviö’s theory: Peeters points to the fact that performance reviews show that many coaches are given a grade of 4 or 5 out of 10. The peculiar thing is the following: one would expect English football clubs or football clubs in general to use these grades as a threshold when hiring a new coach. The average new coach has the same grades but has more potential for growth. However, many coaches that score below the average are hired. In Peeters’ paper, written together with Terviö and Stefan Szymanski (‘The Survival of Mediocre Superstars in the Labor Market’), they offered an explanation: certainty. Peeters: ‘If a club is fighting degradation, you are willing to appoint a coach that is not that good but certainly not horrible. At that point, certainty is exactly what you want’. This is quite sensible, since a club that is fighting degradation shouldn’t be seeking an undiscovered superstar: winning the competition is extremely unlikely at that point, while the danger of degradation is real.
Effects of granting new coaches the opportunity to start
If the worst mediocre superstars would be replaced with new coaches, football as a whole would experience a quality boost. According to calculations of Peeters, the quality of all coaches as a whole would increase by 0.1 standard deviation. This number doesn’t sound that exciting, but Peeters explains its meaning in a powerful manner: ‘0.1 standard deviation means two or three Jürgen Klopps, Pep Guardiolas or José Mourinhos per generation. This really is a lot’. For those who are not that much into football: these coaches are considered to be the best coaches of their generation, hard workers and innovators.