The Madrid Model

There were many interesting things I found when Silva and Brands arrived. “Working to a new system” I thought was illuminating but what really caught my attention was a phrase that emerged in the wider press that Everton would be looking to emulate Atletico Madrid in their approach. It was one of the few and arguably first times I have heard people connected to Everton talk theoretically about how Everton could close the gap on the sides above them who have greater spending power. This was re-enforced to me by Denise Baxendale who a few minutes after the window shut had an article released by Chris Bascombe where she declared not only were they aiming for the top 4, but that she was actively planning for this. It was a hugely impressive, brave if somewhat risky statement though it’s been what the club has been lacking for many years. People in senior positions willing to talk about the expectations of the club. The timing which was just after a successful window dovetailed perfectly and built upon a feel good factor that exists within the club currently.  It was about as far removed as possible from what her predecessor Robert Elstone would have said.

It would be reasonable to link the statements. While I’m not sure they would all be phrased together one after the other, the general ethos seems to fit. We are doing things differently, we are looking to get to the top end of the league and we are drawing inspiration from clubs such as Atletico Madrid (AM) in order to do so.

Atletico seem a very sensible option for Everton to try and emulate if they wish to be successful. I always feel you should look for businesses that are similar to your own if you wish to make improvements. Both clubs exist in big football city’s, both are very much the less successful of their neighbours, both have good youth facilities who promote players, both have strong identifies with a sizeable loyal fanbase. Atletico were bought out by venture capitalists and have had to fight back from relegation to become the main contender to the top 2 teams. Everton have avoided the fate of relegation, but are themselves trying to find how they turn a side who are consistently in the top half into something better than this. They too have been bought out and have had a sizeable chunk of money made available to spend on players.

In analyzing the challenges the two clubs face, there are undoubtedly similarities but there are also subtle though important differences. On the face of it, both clubs are some way behind the top teams in their division. Using average wage per player (is US dollars) Atletico are $5 million (per season) while Everton are  $3.65 as of the 2017/8 season. As a % of the top team Atletico in the division Atletico’s wage bill is 58% of Barcelona, while Everton’s is 53% of the top team. There are similarities in how both clubs have to operate, in that they need to punch above their weight to be successful.

The unique challenge of the Premier League is not necessarily the inequality of the league, but (perhaps counter intuitively) the equality of it. The gap between the side with the lowest average spend per squad member to the highest in the Premier League is around 5 times in La Liga it is over 9 times (In Serie A over 15, Bundesliga around 11 and Lique 1 around 20). The fact that the TV deal is negotiated as a package and the size and scale of it in relation to other additional revenues generated (be it sponsorship, gate revenue or even European money) makes the Premier League uniquely egalitarian (and I would argue underpins the quality of the product).

To give some context to the amount spent per player, Everton would be 4^th in terms of spend in La Liga in the same bracket of Valencia ($3.16 & Sevilla $3.05) but strikingly well ahead of Bilbao who sit on $1.85 in 6^th. If Bilbao were in the Premier league they would be 18^th sandwiched between Watford ($1.9 and Burnley $1.78). 13 of La Liga’s sides would be 19^th (or below) in terms of Premier League spend and 11 would be bottom of our league. The bottom sides spend (Levante $0.64)  is less than half of Huddersfield ($1.33).

There are many ways to take these figures. It’s hard to avoid the conclusion that Premier League teams waste money and underachieve as businesses and in Europe. It’s also easy to see why European team see them as a meal ticket when selling players.

For a side like Everton they present a unique set of challenges which Atletico can avoid. In any business or football team you are always caught between weighing up a short term pragmatism against a long term optimism. While there will be some overlap in the two often what is needed for one vastly differs from what is needed for the other. Buying more unknown, less tested, younger players might be an example of looking for the long term and accepting some short term pain. So too might be developing an academy or creating pathways for academy graduates. The short termism of finding the most efficient ways to win is best encapsulated by Sam Allardyce’s approach, who is something of an expert of finding the small margins in football games to keep a team performing to it’s short term potential, yet the method he uses very quickly hits a glass ceiling beyond that point. To their credit Everton have been brave enough to attempt to move away from consolidating ourselves as just a top 10 side and are attempting to build structure that could deliver more, yet the risks are perilous.

Atletico (and so too Sevilla and Valencia) are so far ahead of their competitors in the bottom half of the league it allows for more flexibility and risk to be taken in the short term and a project to be developed in the medium to long term. In a very crude metric, as stated above La Liga has 10 sides who are (in some cases significantly) less well equipped than Huddersfield were. While it’s possible you may get a side like Burnley who may compound expectations with their performance it is unlikely 10 sides will do so in the same season. The security that comes from being very unlikely to be relegated does give a freedom for the club to be bolder in it’s approach, which is more of a challenge to Everton. As last season showed, in spite of substantial investment Everton were deeply mired in a relegation battle and while some of it was down to poor recruitment much of it is down to a league that is increasingly egalitarian for teams entering it.

That withstanding what Atletico have excelled at over a prolonged period is recruitment. Unlike Everton who made a hash of replacing both John Stones and Romelu Lukaku Atletico have been very efficient at identifying replacements for their players. When Torres was due to leave they signed Aguero. When he left they moved for Falcao. Later on when Costa left they moved for Greizmann. It is only in the last 12 months that they have really had the luxury of keeping together an impressive squad and being ready to put a serious challenge in for all the trophies they enter. In the last 10 years they have spent £98 (million) net but  figure is 103 million in the last 3 years and 71 million in the last year. Up until the last 12 months Madrid have bought top players but also been adept at allowing players to leave for big fees. It will be interesting to see if they can continue to spend in excess of 100 million as they have (so far) this summer without losing key players.

What is also striking with their approach is that while big money is often spent on players, they have spent money on players who generally they move on for significant values further down the line. Aguero, Falcao, Martinez & Costa were all sold at a hefty profit. While it looks like that Farhad Moshiri (and any other potential investors!) may be willing to continue to front Everton spending there may have to be an acknowledgement that players need to be bought with more than half an eye on our ability to move them on. It would lead itself to signing less known and younger players. It may also mean a shift in attitude from supporters and an acceptance that selling players at the right price point can be a sign of astute business not a measure for panic.

The other challenge that Everton face over and above Madrid is that they have 5 sides who spend substantially more than them, as opposed to 2 in Spain. While Barcelona and Madrid outspend all of our sides, Everton face a situation where there are 5 teams to have to try and finish above, not 2. There are also Tottenham to throw into the mix who while not an elite team are similar in many ways to Atletico in Spain in that they are well run and consistently out perform their spending (while still spending decent amounts of money).

This challenge also exists into other leagues. Dortmund who have an almost identical spend (3.56$) to Everton have only 1 team to overhaul (Bayern at $6.74). Like with Spain, they also have a league where 10 of the sides spend less than our lowest team. While Dortmunds record of 2 Bundesliga’s in the last 15 years is very commendable if a similar was applied to Everton over that time,  the opportunity for Everton to have won a similar number of titles exist. If the challenge set to Everton was equivalent to that of Dortmund, finish ahead of all sides outside of the teams paying $4.74 or higher and in the same season above each of the 5 teams who sit in that grouping Everton would have had some success). Under Martinez they finished above Manchester United, Tottenham and the rest of the league and in 2005 finished above Liverpool and the rest of the league.

A similar situation to that in the Bundesliga exists in France but at a more extreme level. Monaco are the 2^nd team biggest wage spenders in a league where 16 teams are below Huddersfield and that PSG outspend them by 3 times.  Like Marco Silva Portuguese coach Jardim has managed Olympiakos and Sporting Lisbon before moving to his biggest challenge and Silva’s record was at the very least comparable to Jardim’s at the time of being appointed to Monaco. Jardim’s own performance at Monaco has been impressive or miraculous depending on your interpretation. They have sold $500 m (euro’s) worth of talent in the last 2 years and over 800$ in the last 5. Smack in the middle of that is a team that Jardim built that won the French League and also got to the semi finals of the Champions League (to be knocked out by eventual winners Real Madrid).  Almost the entirety of the Monaco team who achieved this was gutted and sold on. Though given the inequality of the French League it’s unlikely they slip much beyond the European places (never mind to relegation difficulties) they have a substantial funds to re-invest over a prolonged period and with such a talented coach there should be real grounds for optimism that he can again build a side that can challenge on all fronts.

The volatility of Monaco would likely have serious drawbacks in the Premier League yet it illustrates that through effective recruitment and a coach that fits into the broader philosophy there are opportunities to build a club in such a way. For sides outside of the elite layer (Manchester United, City, Liverpool, Arsenal, Chelsea, PSG, Juventus, Bayern, Barcelona & Real Madrid) it is an essential part of the business. Such extreme trading would not be sensible in the Premier League, but looking at Dortmund, who sold Dembele recently for a huge figure and are gradually re-investing it shows the options that are open to Everton.

In re-adjusting this summer it seems clear the ambition and to a certain degree the funds are now in place to allow Everton the opportunity to be competitive at the top end. We have appointed a leading Director of Football to oversee transfers  and we have found a young Portuguese coach who’s in the mold of Jardim and arguably Simeone. It took both a little time to deliver some remarkable results and that will have to be given to both Silva and Brands. The biggest single thing Silva needs to do early into his Everton campaign is not necessarily about moving forward but is about securing us from the sides below us.

Towards the end of Moyes’s tenure we had developed a security that flirtations with relegation were a thing of the past. Uncertainty in any sector rarely compels long term thinking (the sort that have been in evidence from some of the teams mentioned in this piece). The criticism for Moyes was that having built that stability he did not take the due risks to truly build upon it. The funds available to Madrid, Dortmund or Monaco were not too dissimilar to what he had available at Everton and they were all and around a similar point to Everton 10 years ago (or 15 in the case of Dortmund) yet they all stuck to a longer term plan.

I would say Dortmund, Atletico and Monaco all produced sides that would have been good enough to have won the Premier League over the last 10 years (for Dortmund and Atletico that may have been on more than one occasion). They all could have won European trophies including the much daunted European Cup. They have also done so having spent similar to Everton in terms of transfer fees and wages. While the last 2 years have seen a lot of money wasted, the appointment of Brands should fill us with optimism as to what can be achieved, if people are given time to enact their plan. This does not mean Everton are destined to win the League or trophies in Europe, but the possibility certainly exists.

(For use of statistics please see
https://www.statista.com/statistics/675303/average-epl-salary-by-team/