A cynical mind could defend that the ultimate goal of both education and sports is to rank people according to intellectual or physical ability, and this at all levels. At the top of the pyramid, MBAs tend to be regarded as the most prestigious diplomas, while high-flying professional leagues, such as the Barclays Premier League in football, dominate the world of sports. Interestingly, interesting parallels can be drawn between those two areas. I have listed 8 points, but I am sure there are many others. I have split this post in two parts to make it more digestible. The second half will follow early next week – in the meantime please feel free to comment and add your own.
- The objective economic value of both MBAs and the Premier League is debatable: For MBAs the question has been around for years, and actually a straightforward Google UK search for the terms ‘Is it worth doing an MBA?’ will return an excess of 24 million results. The opportunity cost of taking one or two years off often outweighs the accelerated career progression an MBA promises – and even when it happens it is never possible to cleanly delineate the benefits directly attributable to MBAs. When it comes to the Premier League, one could adopt a relatively harsh viewpoint and declare that this competition does not manufacture any product or does not create any value-added service – although this statement obviously neglects the economic activity induced by the organisation of such events as well as the social and health benefits of physical exercise.
2. Competition between top schools/clubs is increasing and happens on a worldwide basis: MBAs have been fighting against each other for years, trying to make it to the top of world-famous rankings such as the Financial Times’ Global MBA ranking. Competition has undoubtedly reached a worldwide scale if we look at the origin of the business schools contained in the latest FT ranking: 19 countries are represented in the top 100, from the US (50 schools) to the UK (13), China (6) and more ‘exotic’ locations such as Portugal (1) or South Africa (1). In football, the 1995 Bosman ruling facilitated the transfer of players within the EU and the net has since then widened to allow clubs to recruit a limited number of non-European players.
3. The price for top talent will keep rising: In football, the globalisation of the market for top talents, coupled with the development of football as an economic powerhouse, has led to an explosion of the price paid for top players. A Wikipedia article has listed the highest player transfer fees over time. Even when adjusting for inflation, some of the best players of the past decades would be considered as bargains by today’s standards: Johan Cruyff’s 1973 move from Ajax to Barcelona cost the Spanish club the equivalent of a mere £922k and no transfer fee had ever exceeded the £15m mark before 1996 with Alan Shearer – the same mark would apply to an ‘average plus’ player today. Since then inflation has been more and more pronounced, culminating with Cristiano Ronaldo’s and Gareth Bale’s transfers to Real Madrid for £80m and £85m at the beginning of this decade. The rising role of Mid-Eastern and Asian clubs witnessed during the recent transfer windows – in particular China last month – will only accelerate this trend.
Competition for MBA students has not reached this extreme – and will likely never do so -, although an interesting article from the Financial Times concludes that business schools are more and more using their scholarships as a way to attract the best students rather than broadening the pool of potential applicants. On top of fiduciary benefits some schools also offer ‘benefits’ such as “preferential access to certain faculty members or guest speakers” according to the same article.
4. Schools/clubs are building a strong intake/team not only to reign now, but also to facilitate recruitment in the future: The quality of the alumni network is a key component of the MBA offering and top business schools need to maintain their status as a regular supplier of blue-chip executives. The recruitment of high-quality students can therefore be considered more as a long-term investment aiming at improving the executive pipeline in the future – for an example see this page listing selected famous Harvard alumni. For football clubs, the recruitment of a star is a way for a club to signal a step change in standing and to lure other strong players as part of this ‘transformation project’. Putting aside Real Madrid, who has been spending huge amounts in top-class players for years, Fulham for instance (unsuccessfully) tried to do so in the early 2000s, then Manchester City, and more recently Paris Saint-Germain with the recruitment of Zlatan Ibrahimovic, without whom PSG would certainly not have signed the likes of Di Maria, Cavani and Thiago Silva.