googlebd6a115ee0f704d9.html Game Theory or Bust

©2018 BY WHITE SPORTS VENTURES.

Game Theory or Bust

April 30, 2019

Soccer clubs are big business. Pay to play is here to stay and represents a massive financial opportunity for clubs that are willing to fight for market dominance.  

 

In the Philadelphia area, with the exception of the Phila. Union and Penn Fusion, clubs are not (entirely) behaving like businesses.

 

The Union and Penn Fusion are playing chess, some clubs play checkers, and many clubs are hindered by low-resolution thinking. Let’s briefly examine the Union’s steps over the past few years.

 

Imprecise catalog of events :

  1. Purchase Rocket Sports / Partner with a savvy facility operator

  2. Hire surrounding club coaches as staff and use them to funnel surrounding clubs’ players into the YSC facility for programming

  3. Launch club neutral programming / disarm local clubs.

  4. Hire local club directors to run programming and facility operations

  5. Launch Academy program / take all of the area’s top talent

  6. Dissolve club neural programming

  7. Get rid of local coaches that are not DA qualified.

  8. Hire foreign coaches

  9. Expand the DA program to Pre-DA that is pay to play and extends to u-10 and takes even more young talent from local clubs

  10. Innovate by opening a school

  11. Close a deal that essentially makes the local rival DA your farm club

  12. Allow administrative staff to coach at local talent rich clubs

  13. Protect gains by joining the board of US Soccer and dominating the local political soccer scene.

Machiavellian, strategic, and well executed. The reward; a damaged local reputation, a strong national reputation and an uncontested seat a top of the PA, DE South NJ soccer iron throne.

 

The speed in which the Union have risen should be a lesson to any club that believes the lindy effect gives them perpetual rights to a consumer base. If your club does not own infrastructure, it is vulnerable. If your club refuses to innovate, it is vulnerable. If your club has inexperienced, unqualified leadership, it will fail.

 

Penn Fusion is years ahead of the local competition from a business standpoint. If they decide to act more aggressively and purchase land on the main-line to scale their recreational programs, they will emaciate the financial strongholds of several established clubs.    

 

One day soon, the Ukranians and Penn Fusion will behave more aggressively. They will expand their market share. Why wouldn’t they? The signs are obvious. Penn Fusion already purchases clubs and brands their affiliates.

 

What actions might ambitious, yet smaller less sophisticated clubs take to protect themselves in advance of the coming territorial battles?

 

Hire a business consultant that understands game theory.

Game theory is the study of mathematical models that describe strategic interaction between rational decision makers. The methodology helps individuals or groups make decisions by adopting the perspectives of others to anticipate their actions or reactions.

 

In the context of business, Game Theory is used to learn what partners and competitors are thinking and planning. Game Theory has become a powerful tool for the prediction of outcomes or results of transactions that directly affect or impact others and manner in which others react to the effect of a transaction.

 

To be more specific, soccer clubs should employ game theory to aid in the following:

 

  1. Reduce business risk – Applying game models is effective in determining equilibrium within a market. Models can also obtain information about a company, the market, competitors and technologies in use.

  2. Insights about the competition – Game theory is effective getting information about factors related to the competitiveness of business. If you want to know what your competitions motivations, strategies, strengths and weaknesses are, and use the information to increase your value proposition, use Game Theory.

  3. Improve internal decision-making processes – By playing out business scenarios, companies become more confident in their decisions.

 

Keep in mind, Game Theory is not a substitute for business experience, it is a tool…..you still need experienced people.

 

Good luck!

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