IIFT 2014 Question Paper

For the following questions answer them individually

Read the following passage carefully and answer the questions given at the end.

No club in the English Premier League generated less money than Wigan Athletic. No club in the Premier League had so little history, or so few fans. Ever since 2005, when they won promotion to the top flight for the first time in their existence, Wigan started the season listening to prophecies of doom. 2013 was the year that football gravity finally caught up with them, and they returned to their 'rightful' place among the also-rans. Even as the naysayers and doubters were ignoring seven years of wrong forecasts and congratulating themselves for seeing Wigan's fate, this little David took out one last Goliath. Manchester City, in the FA Cup final.

In their book Why England Lose, the football journalist Simon Kuper and the economist Stefan Szymanski found that money matters a great deal for the success of football clubs. According to their calculations, 92 per cent of the differences in English football clubs' league position can be explained by a club's relative wage bill. It might not be the case that the team with the highest wage bill finishes top each and every season, but over the long term, the correlation is uncanny. At the other end of the table, it seems inevitable that, eventually, in football poverty will drag you down.

For Wigan, this was unfortunate. The annual reports into football's finances prepared by the accountants Deloitte must have made miserable reading for anyone who followed the club: their turnover, wages and attendance were all fractions of the Premier League's giants. And yet Wigan managed to avoid relegation for seven years. It was almost pathological. They defied the laws of football economics. They disobeyed the laws of football gravity.

Part of the reason Wigan managed to survive so long in the rarefied air of the Premier League is Dave Whelan, the local magnate who owns the club. Wigan's average attendance was just 17,000 - they rarely sold out their home ground, the DW Stadium, its initials a (self-awarded) tribute to the club's benefactor - on a par with the likes of Vitesse Arnhem or the average German second-division side, but half the Premier League's average. That's a considerable shortfall in revenue. It's the same when we look at television and commercial earnings: in 2010- 11, they earned £50.5 million from all of these streams - a tidy sum, to be sure, but half what the average Premier League team took. Only because of Whelan's enduring generosity did the club avoid sinking into the red. In 2011-12, he wrote off a £48 million loan to the club to balance the books. Financially, Wigan could not compete. And yet on the pitch they did.

In truth, Wigan did not dramatically outperform their wage bill, the gauge - for Kuper and Szymanski - of a manager's true impact. From 2006 to 2011, they finished eighteenth, fifteenth, fifteenth, sixteenth and sixteenth in the salary league, not far off their finishes in the actual division. Yet Wigan's continued survival was still, as the respected financial blog The Swiss Ramble had it, 'a minor modem miracle'. To explain why. we have to consider the odds that - given their spending on wages - Wigan would have been relegated well before the final axe fell in 2013. To do that properly, we need to calculate the odds of relegation as a function of a club's payroll.

The notional odds of relegation from the Premier League in any given season, for any team, are 15 per cent: three sides out of twenty endure the pain of demotion every year. But of course those three clubs are not simply drawn out of a hat: money does matter. More specifically, when we examined twenty years of club finances with the help of data from Deloitte, we found that a club's odds of relegation are 7.2 per cent if its wage spends is greater than average. In other words, you can halve the chances of being relegated just by spending a little more on your salaries than the average side. But for clubs that spend less, the odds of relegation shoot up from 15 to 21 per cent. For a team that spends as little as Wigan or less, these odds can even be as high as 44 per cent in any given season.

Spending less isn't a death sentence, but you are flirting with the chair. And spending less than the average year after year means the odds of relegation accumulate. For Wigan, the odds that they would be relegated at some point over the five Premier League seasons to 2012 were 95 per cent. It was, both mathematically and financially, almost a certainty. With wage bills four, two, and one and a half times Wigan's £40 million, Manchester United, Aston Villa and Fulham faced odds of demotion of 0, 31 and 69 per cent, respectively.

All this suggests that Wigan's continued survival was more than just good luck, and it was not simply attributable to their individual wage spending in any given year: the numbers were squarely against them. So Wigan's story is not just about money, but also how that money is put to use. By any standard measure Wigan had been a mediocre team for a long time. They conceded more goals than they scored in every season they were in the Premier League. They tended to have more possession than most of their peers at the wrong end of the table, but much of that came from the sterile domination of their own half. Roberto Martinez's team, though, had been doing more than just passing the ball around at the back and getting lucky. With the help of Ramzi Ben Said, a student at Cornell University, and the performance chalkboards published online by the British newspaper the Guardian in conjunction with Opta Sports, we tried to establish how Wigan went about scoring their goals in the 2010-11 season. Ramzi collected and coded a year's worth of data of attacking production (how each Premier League club scored their goals that season).

The data showed that the vast majority - 66 per cent - of the 1.4 goals a team scored in the average match that year came from open play. By far the smallest proportion of goals came from direct free kicks: just 2.8 per cent per team, per match. The average team produced one goal a game from open play, but needed to take thirty-five direct free kicks before finding the net that way.

But Martinez's Wigan was not your typical club. In 2010-11, they created goals in extremely unusual ways. They relied much less on traditional open-play goals than most, and did not bother with anything that resembled a patient build-up. In half their games they failed to score from open play at all. When they did, they tended to come from what are known among analysts as 'fast breaks' - lightning-quick counter-attacks. And the rest of their goals came from free kicks. Their output in both these categories was exceptional. They scored twice as many goals on the break as the average side, and they scored almost four times as many goals from free kicks.

Rather than choosing one or the other, Martinez as a manager seemed to have forsaken both high frequency - not scoring from the most common source of goals - as well as good odds - trying to score from low probability shots (free kicks) - as a way to win matches. Martinez was not trying to fight his opponents in a conventional way. Instead, he was beating them any way he could. Albert Larcada, an analyst at ESPN's Stats & Information Group, filled in the picture further. Using Opta's master file of play-by-play data, Larcada discovered Wigan were unusual in a number of other ways.

Not only did they score from fast breaks and free kicks, but when Larcada calculated the average distances from which Premier League clubs attempted shots that season. Wigan were the overall league leaders. Their average shooting distance was some twenty-six yards. This looked deliberate: their goals came from a longer distance than any of their peers - an average of 18.5 yards, way ahead of second-placed Tottenham, while their players Charles N'Zogbia and Hugo Rodallega both finished in the top five scorers from distance in the Premier League in 2010-11.

Martinez was thinking outside the box in the most literal fashion. Indeed, his team had the lowest number of goals scored from inside the penalty area of any side in the league - just twenty-eight, compared to Manchester United's sixty-nine. This sounds very defensive - hitting teams on the break, relying on set pieces and long-range shots - but Wigan's formations told a more nuanced story. Martinez's strategy relied on highly accurate long- range shooting, firing from distance - allowing his team to recover their defensive shape more easily - and persistence. He did not place any emphasis on corners - Wigan scored just one goal from a corner in the entire 2010-11 season - because it meant allowing his troops out of hiding and into open sight, leaving them vulnerable. Martinez was playing guerrilla football. He had his team lie in wait for their opponents and then punish them on the counter-attack. He employed sharpshooters, to let fly from distance, and snipers, to hit free kicks. His team were adaptable, unpredictable.