Philippe Coutinho, FSG and Game Theory

Philippe Coutinho, FSG and Game Theory
August 16, 2017 Chris Rowland

By TTT Subscriber Mark Cohen, responding to Paul Tomkins’ ‘Football Is No Fun Anymore’ article.

Tour de force Tomkins… well done ‘Ol boy.

So, one of my favourite human beings in this world is Richard Dawkins. As a lad, I read the Selfish Gene and was instantly and irrevocably smitten with this genius of a mind, his unwavering logic and superb insight into how everything that we see is steadily and gently built up over eons to create the majesty before us. Some may think it from a heavenly hand, others from a purely evolutionary one, but either way the majesty exists.

Anyway, Dawkins’ logic has affected every single thought I take, and has helped me to see everything as an ever changing and highly complex, intertwined mesh.

One of Dawkins’ pet loves is ‘game theory’ and how, if situations are thought out and played out mentally with enough knowledge and understanding of the underlying cogs and wheels that govern them, you can ‘see’ into the future and predict the situation’s outcome accurately. What is fascinating is how sometimes, playing this ‘game theory’ to its conclusion for a situation will produce a result that is at odds with conventional wisdom.

I should point out that my avatar is a screenshot from the 1983 film ‘Wargames’, one of my favourite and best depictions of a game theory play through and result. In the film, an artificial intelligence called WOPR (War Operating Plan Response) plays out hundreds of millions of World War III scenarios (with terrifying Nuclear weaponry) and ultimately draws out the conclusion that ‘the only way to win is not to play…”

Let’s consider the Coutinho situation and FSG’s response in the context of the game theory that might pervade.

Most people view the situation from the point of view of the individual. You will hear things like: “Coutinho dreams of Barca”, and “Coutinho wants to go, so we must let him.”

Game theory though, doesn’t only consider the individual. In fact, the individual is virtually irrelevant in the big picture.

Lets posit two scenarios:

Scenario 1

  1. FSG agree that Coutinho can go to Barca so we sell him (price immaterial)
  2. By doing so Liverpool confirm our status on the predatory tree as below Barca.
  3. The football world correctly recognizes this, that we are not as big as Barca, and that normal order is restored.
  4. The football world includes football players across the world. They also recognize this.
  5. The next batch of transfers (for the foreseeable future until this situation or ‘game’ is altered) is governed by the ‘fact’ that any good young player signing for Liverpool knows that if he becomes good enough and Barca come calling, he will leave no matter what.
  6. Barca will continue to view Liverpool as below the chain and will constantly watch our high performing players knowing they may pick them off at will.
  7. The football world will continue to view Liverpool as a rung below the very most elite and Liverpool may be trapped in a cycle where we can never improve past a certain point as our best players get plucked in their prime. (note that systems don’t exist in a vacuum, and we could improve by other methods – superior coaching, home grown Fowler types may never have their heads turned etc, but the game plays out as if all other things remain equal)

Scenario 2

    1. FSG hold a line that says he is not going anywhere and make him stay at Liverpool.
    2. The player sulks but soon comes around as he is a footballer and wishes to play. (indeed I can’t think of a meaningful long-term strike problem where this didn’t ultimately happen if the player was forced to stay)
    3. In taking this action, Liverpool change the situation or ‘game’.
    4. Liverpool are now directly telling bigger clubs that we see ourselves as their equals and wont sell to a rival unless it suits us.
    5. Whether this claim of size is true or not is irrelevant, as the football world will see Liverpool as attempting to play a different game than before, and their views will change.
    6. The football world includes football players across the world. They also recognize this.
    7. Some players will laugh and joke about how Liverpool are pretending to be as big as Barca. This is irrelevant.
    8. The next batch of transfers (for the foreseeable future until this situation or ‘game’ is again altered) is governed by the ‘fact’ that any good young player signing for Liverpool knows that if he becomes good enough and Barca come calling, he may not be allowed to leave.
    9. If a transfer target in this new ‘game’ is presented with a contract offer from Liverpool he now has choices:
        9.1 Does he have a competing offer from a club above Liverpool in the predatory stakes (ie Barca)

9.2 If he does, does he laugh at Liverpool or does he take Liverpool’s as seriously?
9.3 If he doesn’t have a competing offer from a bigger club does it worry him that he may be denied a future move to Barca if he becomes good enough?

    1. 9.3.1 If it worries him, is Liverpool’s offer of present wages big enough to tap into his hierarchy of needs and overcome his fear of not being able to move to Barca one day? If you do overcome this, he will sign.
    1. 9.3.2 If it doesn’t worry him unduly at this moment, because he honestly doesn’t know if he will ever be at Barcas level and Liverpool is already a world club, he will sign.

10. Barca will no longer view Liverpool as below them on the chain and will not bother to waste their energies on our players, as they understand that players have signed for Liverpool on day one in the knowledge that the club wont sell them and are thus much less likely to agitate for a move.
11. The football world will now view Liverpool as competing club with the most elite and Liverpool will likely benefit from not having the yearly threat of our best players leaving in their prime.

The key take-home points from the game theory play-through is that, in my opinion, close to 100% of players that are not actively being pursued by clubs bigger than us and are not affiliated to a smaller club (Le Tissier at Saints for example in the 80s when he simply wouldn’t leave them no matter how we tried) will  want to join us if we come looking and offer them a big enough wage package.

Once these transfer targets have absorbed this change in the game from the Coutinho refusal, their choice is simply to take the great job at Liverpool now, because the opportunity might never again present itself, and as a long term downside to that choice, understand that Barca is now probably off the table.

It holds little logical recourse, in my opinion, for close to 100% of these targets to think that, because they might one day be good enough and pursued by Barcelona, it would make sense for them to refuse a large pay packet and huge job from Liverpool today.

Of course, there might be competing offers from similar clubs like ours who will sell to Barcelona, and that may influence their decisions, like for example if a Spurs came in and matched our offer.

But, the great thing about human beings and their hierarchy of needs is that they struggle to see far enough into the future to make a long term decision that doesn’t benefit them now. In other words, Liverpool are more attractive than 98% of all football clubs today, and unless one of the 2% are bidding for you too, you are likely to take the real, tangible Liverpool offer now even given it may, one day in a mere hypothetical future, cost you a move to Barcelona.

Indeed, another advantage is that the refusal to sell you to Barcelona happens as a type of ‘compliment sandwich’. For the uninitiated, a ‘compliment sandwich’ occurs when you arrive in the boss’s office and he has bad news for you but starts and finishes the meeting with good news, ‘sandwiching’ the shit in the middle so he can get his point across whilst still making you feel good.

An example: “Morning son, great numbers for July, your increase will only unfortunately be 2% this year due to budget cuts but the good news is that Marv is leaving at the end of the quarter and continued good performance puts you close to the top of the list to replace him…”

In scenario 2, this would look like this during a negotiation: “Morning Naby, we will be paying you 150k a week, of course your contract will have no release clauses for any Spanish, English or German team and it’s important you understand we don’t sell to them, oh, and you are going to be the next Steven Gerrard for us…”

In toggling the player (and agents) expectations on day one, whilst keeping in mind they will know we are true to our word given they would have seen Coutinho staying at Liverpool in this scenario, we are setting a stable building platform of long term planning.

This is a powerful negotiating tool which works wonders in business and there is no reason it wouldn’t have the same result for us in terms of player procurement.

If you are wondering how these two scenarios might play out in the real world, a good place to look is Liverpool and Manchester City.

We have been more of the first scenario, where City try to operate in the second one, and the results are plain to see. No matter how well Aguero or Silva played in their pomp, they were never courted by the big two. There was almost this unwritten rule that Barca and Real seemed to understand, which governed players from City.

Also, if we consider how an agent’s role might play out in either of these two, you needn’t worry, because there is not a man on the planet who would block his client moving to Liverpool if he is getting 10% (or more!!) of the fee.

It is very difficult to be objective in a situation if you stand to benefit from it, and this, probably more than anything else, massively governs the agitation of players on a regular basis as their agents only make vast swathes of cash if their players move so it makes great sense to coax your players into packing up.

To me it has always been clear that FSG view Liverpool as the long game. They have probably taken a view that football is the world’s fastest growing sport economically speaking and they will also know that they have a strong history of taking on and beating the biggest sporting institution on the planet, the New York Yankees, so our fears of the predatory Barcelona probably don’t scare them nearly as much.

Indeed, if they have a long view of placing Liverpool alongside this clutch of mega-clubs at the pinnacle then it makes an enormous amount of sense to hold firm and upset just one player, if the long term results of changing the game are going to play out as described above in scenario 2.

Poor Phil  – he might have thought that all that had gone on before might mean he could force his move, but this may not come to pass.

Of course, FSG may still sell him, and that will mean a return to scenario 1 regardless of the price we get, and this will disappoint and surprise me given that I firmly believe they have performed this very same game theory play-through and drawn a similar conclusion.

It just doesn’t make business or football sense to sell him. Doesn’t matter if he can be replaced by an equal or even better player, as this is, in the firmest and most tangible sense, a matter of an actual display of strength, thus making all future player squads and recruitment more stable.

In the animal kingdom they would call this ‘peacocking’, strutting your beautiful feathers out as a show of virility to the ladies, and this is the same as that.

If I were FSG I would stick to my guns hell for leather. It might be giving us a miserable time now, but if you have the foresight to understand how this will play out, you will see it is worth the pain.