Why it was right to sack Claudio Ranieri (with added hindsight)

Two weeks on from the third most shocking event of 2016/17 – obviously after Brexit and Trump (according to urbane Liverpool Manager Jurgen Klopp) – and pausing for reflection, what do we now think about Leicester’s decision to dump their Premiership winning manager?

The news that the previous season’s genius and FIFA coach of the year had been dumped, just days after a vote of confidence – initiated a wave of disbelief and navel gazing of unprecedented proportions – it was clear that not only was this the wrong decision, it was the end of football! Chelsea Manager Jose Mourinho embroidered the initials CR on his own branded tracksuit in respect for his former foe, and with his normal level of self-realisation stated he thought the fact of his own sacking from Chelsea one year earlier, was earth shattering, and yet he had to admit was nothing compared to the shameful treatment of Claudio.  Even National Treasure and Leicester fan and former star player Gary Lineker gave credibility to the media over-reaction commenting that the sacking was ‘inexplicable, unforgivable and gut-wrenchingly sad’.

So was the sacking wrong?  And why did it create such a hysterical response from the media and football commentators.  As a popular meme shown to me by a colleague (no I dont know what that is either) demonstrated, six manager’s who had won the Premiership since 2010 were not in their job by the end of the following season – they had all been sacked (or resigned as in the case of Sir Alex Ferguson, after his title win in 2013).  I would expand this to also point out that Roberta di Matteo was also sacked by Chelsea, early into the following season, after he had remarkably won the Champions League.  The pay off to this particular viral electronic message was that this explained the reluctance of Arsene Wenger to win the title (since 2004) as he actually wanted to keep his job.  We will get onto that later.

On a radio programme just after the sacking and because I had a contrarian view, I was asked to explain the sacking in light of the research we have done (Bell, A.Brooks, C. and Markham, T. (2013) The performance of football club managers: skill or luck? Economics & Finance Research , 1 (1). pp. 19-30. ISSN 2164-9480:  http://centaur.reading.ac.uk/30997/). Put on the spot, and with the caveat that I am a historian, I said that yes Ranieri should have been sacked, and also could have been removed sooner.    I do think the timing of the decision was curious – just 13 games to go, and in the middle of a two leg Champions League tie.  However, maybe if the Owners had read our paper, which calculates you actually need 9 games to make a decision on the performance of a manager – and there were still a lot of points to pick up in the final run in.  Perhaps Leicester delayed their decision because of their own emotional connection to their now legendary manager and their fear of the media reaction – although they probably had still underestimated this.

How do I explain my mean mannered response?  Well it wasn’t gut feeling nor did it consider any of the emotional reaction referred to above.  Indeed the radio presenter challenged me on that – saying ‘that isn’t football’.  Instead, because we have investigated this problem in detail (I wont go on about it again now) and considering the resources and constraints of Leicester City, my view was that the team were not performing to expectation – without a win or scoring any goals in the League in 2017, they were clearly underperforming.   Now with the benefit of hindsight the decision to sack and my own interpretation was right.  Leicester bounced back with consecutive wins, scoring 6 goals, and even overwhelming the mighty Liverpool.  Vardy and Mahrez suddenly remembered how to play, and they clawed their way out of the relegation zone.  Now in the last eight of the Champions League, after an amazing return-leg performance at home against Sevilla – who knows, maybe Leicester could confound the odds, and the pundits again!

I am not going to worry too much here about why the big turnaround – as there hasn’t been a change of personnel, it is the same players, with the Assistant Manager, Craig Shakespeare, stepping up to acting manager – and now confirmed in the job until the end of the Season.  However, we can wonder about the huge disconnect between the decision of Leicester’s owners to dismiss their talisman and the populist reaction.  Indeed all the other sackings mentioned above – although each one would be subject to media dissection – had not led to such widespread condemnation.   My feeling is that this is because of the ‘fairy story’ narrative that had been built around lowly Leicester winning the Premier League and the unprecedented nature of this achievement.  How awful for everyone that this narrative had now been tainted.

All I would say to this is that fairy stories are pretty grim anyway (remind yourself of the Tale of the Three Little Pigs, where they lose two houses to a wolf) and Little Red Riding Hood (where Grandma is eaten by a wolf – probably a different one).  Surely there have been other achievements that were equal if not transcending Ranieri’s success.  You only have to look at the career of the legendary Brian Clough who managed the unfashionable Derby to promotion to the top league (no Premier League then, nor Sky TV), and then won this completion three years later and then made the semi-finals of the European Cup (the forerunner of the Champions League). Not bad.  But then he did the same with the equally unfashionable Nottingham Forest – gaining promotion and then immediately winning the top League and subsequently the European Cup – twice back to back. Oh well its different times now we hear – yes I agree, but I would argue that his mighty achievements still put Ranieri in the shade. (Arguably, Graham Taylor also achieved more with Watford, taking them from the bottom division to the top in five years, where they finished 2nd in their first season behind Bob Paisley’s all-conquering Liverpool).

To advance the debate I think it would be instructive to actually consider the annual football manager ‘sack race’ in a business context and for this I mean considering the club stakeholders – and here I would include the owners and the fans.  In the case of Leicester the owners were clearly acting with regret when they fired Ranieri.  The fans (not the famous ones) were also considered in their reactions.  Not too many rants on radio phone ins, and no big planned demonstrations at the next home match (but then they did destroy Liverpool – but they couldn’t have predicted that unlikely outcome).  And this is how football manager dismissals should be contextualised.  It is not ‘the end of football’.

Each club has to consider their own specific strategy.  For the owners, this means their strategic aims.  Do they plan to continue long term in the league they are currently in – or are they happy yo-yoing between divisions?  Surely it will be the former as this allows them to build a sensible financial plan taking into account the predictable pattern of income from prize money, TV money, gate receipts and other merchandising, sponsorship and hospitality.  Premier League status brings approx £100 milllion annual income for each club – just from the TV rights.  To lose this is catastrophic for their planned budget and will have their accountants tearing their hair out.  Therefore, in the case of Leicester – and other teams in their position – the primary strategic aim must be to stay in the Premier League at all costs – and this cost includes the negative reaction from sacking their manager as nobody is untouchable or irreplaceable in the context of their strategy.   I also think that the fans, in most cases, want the same as the owners.  Indeed, fan protests are usually most vehement when they feel that the ownership is not listening to them when they call for the manager to be sacked.  They want success, but what is this?  For some clubs, fans can expect silverware, a top four finish or mid-table respectability, for others even just not to be relegated is their measure of annual achievement.

This brings us to the perennial problem of Arsene Wenger and Arsenal.  This never-ending story seems to be entering its endgame – with the club saying they will let their longstanding Manager decide his own future (yeah right), and with Wenger reflecting that he will listen to the views of the fans.  Unfortunately for him, the long suffering and patient fans seem to be turning against him.   Wenger has taken a lot of stick for not winning anything between 2005 and 2015 (and then it was only the FA Cup!) – but I think he survived in his job because he consistently delivered on the clubs strategic aims – to be financially sound in their new stadium, and to be a top 4 finisher giving access to the Champions League.  This also satisfied the fans – up to now.  Now that Arsenal are not in the top 4 (and this is looking like 4 from 6 strong contenders this year) – it could be Wenger does not deliver on this for the first time.  On this basis, it would follow that he should indeed step down (in reality he is out of contract anyway at the end of the Season and despite what the club say, it is unlikely they will extend this).

I think it is useful to contrast Arsenal with their London rivals Chelsea – they have had completely different strategic aims and demands from their fans over the last 10 years.  For Chelsea, the owner wants to win the Premier League and the Champions League – the fans also want silverware annually.  Thus the club sacks its managers regularly (including Mourinho – the special one – twice)  and has seen great success winning the Premier League four times and the Champions League in the same period that Arsenal has won nothing.  With this obvious example in mind, why didn’t Arsenal do the same.  Again from a business perspective – this did not suit their strategic aims – sacking a manager of the calibre they need is extremely costly and would disrupt their aim to be a club with a sound financial footing.  Sacking Mourinho in 2007 apparently cost Chelsea £18 million, in 2015 it was speculated that he received a £40 million pay-off.  Chelsea has therefore spent a reported £100 million sacking managers in the period where Arsenal have had stablity without this financial burden.  How a football club acts regarding their manager at this elite level is directly linked to the size of the owners pockets and expectations.  The compensation paid to the outgoing manager is money that won’t be spent on strengthening the team, improving the stadium or bringing down ticket prices.

This makes me peevishly wonder, what was Claudio Ranieri’s payoff from Leicester?  According to media gossip, he walked away with a cool £3 million – more money than most of us will earn in our lifetime – rendering the comment poor Claudio an oxymoron.  For all its negative aspects, Football management does seem to be the only profession where you can get the sack for perceived failure, but still end up quids in!

Professor Adrian Bell is Associate Dean (International) at Henley Business School and Head of the ICMA Centre.

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