Leicester City – a parable

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value of something

Why successful clubs don’t know how lucky they are!


The whole nation knows the value of winning the Premier League to Leicester City. The value of Leicester winning it is greatest just before it’s won. This blog was published the morning of the day when Leicester became Premier League champions. I’m not a Leicester fan (or season ticket holder like regular reader Sam Pickford) , but I’m fascinated by the story like everyone else.

#LCFC 2015-16 – The best value for money  in the history of the Premiership

You want to know what value for money looks like, it looks like Leicester City Football Club’s wage bill and this is why.


You get the picture. The blue dots represent those clubs that (per pound spent on wages have got most from the spend). The orange dots represent those who’ve got most.

The dark blue dot at the very top is Leicester City this season, a club that has defied every expectation!

As you’d expect, the orange dots include historic failures such as Derby County, today’s failures such as the current Aston Villa side and relative failures such as the 2015-16 Chelsea.

And now I’m thinking  pensions

It’s one thing to judge a football club on its fully disclosed wage bill over a determined time, it’s another supposing these numbers are a guide to the future. The second team (and highest light blue button- are Ipswich- who were relegated the season after their annus mirabilis). But it’s interesting that Tottenham and Arsenal regularly appear in blue and Newcastle and Sunderland in orange.

Adjusting performance for the cost of achieving that performance is an established way of measuring things and it should be no different for pensions.

First Actuarial runs each year a Monkey League where we challenge our football experts to pit their wits against the picks of 1000 monkeys in picking winners and losers. Each team chosen has a handicap, clubs with big spends have to do better than the lightweights. We had one our of our 150 contestants choosing Leicester to do well, Leicester has done her well, they were assumed to be relegated.

Picking outliers like Leicester is great fun, but it’s not what makes for success. The lady who has chosen Leicester has followed the same philosophy throughout and sadly , she has not done well in other divisions. Which suggests that strongly capitalised clubs which pay good wages do get better results (usually).

But over time, it appears it is the Tottenham’s and Arsenal’s who are delivering most pound for pound and this suggests that they, and not the Manchester City’s and Chelsea’s, are the teams producing the consistent value for money over time.

What this means for us pension fans is that

  1. we should  be wary of investing in the Leicester’s and Ipswich’s on the basis that one swallow does not a summer make
  2. That we should look for consistent above average performance evidenced by results
  3. That whatever our theoretical assessment of the value for money we are likely to get from our choice of fund, we need to back test against historic results to see if theory translated into practice.

(Footballing) success can only be judged over time

Thinking about an analogous measure – such as the value for money of football club wage bills helps focus the mind on the very abstract concept of value for money in the very abstract world of manager performance.

Past performance is one dimension of the 3-D decision, the other two are value for money. Prudential, alone among the IGCs looking at VFM proposed a straightforward benchmark for performance (3% over CPI – net of charges – over time).

Like Einstein’s fourth dimension, past performance is time dependent. Leicester may be in the Championship in 2017 (following the Ipswich performance track). It is not until Leicester can show consistent outperformance relative to spend – over time – that we can label the club “well managed”.

Football is great as what you see is what you get. The football league table is a transparent measure of success ( put aside arguments about point deductions). But football is a game that fully engages us all, about which we can make educated decisions. Football is a game that empowers us to feel we are all experts.

It is also a game that teaches that clubs only become great over time.

Supporter’s Trust


Nottingham Forest v Yeovil 180507


Why the “beautiful game” helps is that it enables us to see what pensions could be like if we could find a way to make it as interesting. The beautiful game also allows us to understand that what we measure as success can typically include, not just the results , but the quality of the experience for the fan.

Which is why supporting Yeovil Town FC will always be value for money and why pension providers  must do better in engaging ,  educating and empowering their members. Football clubs – especially in the lower leagues, are setting up Supporters Trusts which allow fans a greater insight into and say about the decisions being taken in their clubs.

Football clubs (like my Yeovil), know that the loyalty of the fans depends on their being able to speak about “their club”. This seems to have been something that Leicester has achieved over the years ( as recently as 2008-9 they were in the third tier -League One).

Keeping the trust of supporters – “whether you’re up or down” seems tied to this sense of ownership. When the club loses its supporters as owners, then it struggles.

I sense that IGCs could- in time- become like Supporter’s Trusts, the means by which ordinary people feel they get some ownership of how their retirement fund is managed.

For that to happen, we need to bolster the IGC as an independent but integral part of a pension provider’s set-up. That’s why I believe IGCs are critical to restoring confidence in pensions.

leicester city

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to Leicester City – a parable

  1. Mike Jeapes says:

    According to the first image, Ipswich can’t even win the wage league. It’s tough being a Tractor Boy.

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