People demonstrate "a greater tendency to continue an endeavor once an investment in money, effort, or time has been made." This is the sunk cost fallacy, and such behavior may be described as "throwing good money after bad",[20][15] while refusing to succumb to what may be described as "cutting one's losses".
First I would like to admit that I have been very little critical of the management at Man Utd during the past few years. For a long period I found it hard to believe that they could be as useless as the media made them look. I always felt they made a few poor decisions (hiring Mourinho and OGS for instance), but tried to see it from their point of view. My rational was something like this:
A) Glazer wants return on investment, and consequently would not accept money being pissed away,
B) Hence, they would hire someone competent. Based on my knowledge and experience I would expect someone from Goldman Sachs (Woodward, Judge and Arnold, I think) to be both competent and intelligent.
C) Considering the management spend (hopefully) 50 hours a week on these questions, with more information than supports and pundits, I would expect them not to make silly mistakes.
In hindsight, looking at the annual reports and compating the money with spent with our results, it appears I have been very naive.
The sunk cost fallacy is a rather easy concept that most people understand and I would never question if the management of a big company keeps repeating a "sunk cost fallacy". But in the case of Man Utd, knowing what we do, it is really hard not to.
Refusing to let Romero go to Everton is quite a good example. According to reports Everton made an offer off £2 mill in loan fee in addition to covering his salary. We rejected the offer and as a result, Romero stayed for a year costing us £100 000 a week. In total, Man Utd lost £7 mill on that decision.
This appears to be the case again with Martial where we, according to reports, are refusing to budge, insisting that Sevilla cover his salary and pay a loan fee. And it is probably the case with many more players on our books. Why do we do it?
A) In some cases we hope that the players desire to play football will make them give up part of their salary,
B) Want to avoid reputation of being a pushover in negotiations,
I think we have seen examples of both in the past. If I am not mistaken, both Sanchez and Rooney agreed to take a wage cut to leave with the prospect of playing more football. The club might even also argue that their «never split the difference»-approach made Leeds pay up for Daniel James in the end. However, I think they would find it difficult to justify their approach overall.
It is almost as if you wonder if our management is afraid to make previous errors (paying our players to much) transparent to the owner. Covering the salary of a player we have lent out, or letting players go for free due to their high salary, would expose previous errors.
A huge consequence of failing to let players go is a squad with players sulking. It makes us less attractive to our young players, the negative publicity hurt the brand, but first and foremost it makes it very difficult to build a successful team. How can anyone expect us to build a winning mentality when we have several players in the squad who have their minds elsewhere? Probably unhappy about their current situation. Are they likely to raise the bard in training? Ensure that their is a competitive environment in the squad? Or are they likely to be a bit careless? Lacking focus? And that their mindset spread to other players in the squad?
In short, becoming more effective with transfers should be priority number one for the new CEO. Rule number one, dont makes silly mistakes when handing out contracts. Rule number two, if you do, take the cost and gid rid fast.
First I would like to admit that I have been very little critical of the management at Man Utd during the past few years. For a long period I found it hard to believe that they could be as useless as the media made them look. I always felt they made a few poor decisions (hiring Mourinho and OGS for instance), but tried to see it from their point of view. My rational was something like this:
A) Glazer wants return on investment, and consequently would not accept money being pissed away,
B) Hence, they would hire someone competent. Based on my knowledge and experience I would expect someone from Goldman Sachs (Woodward, Judge and Arnold, I think) to be both competent and intelligent.
C) Considering the management spend (hopefully) 50 hours a week on these questions, with more information than supports and pundits, I would expect them not to make silly mistakes.
In hindsight, looking at the annual reports and compating the money with spent with our results, it appears I have been very naive.
The sunk cost fallacy is a rather easy concept that most people understand and I would never question if the management of a big company keeps repeating a "sunk cost fallacy". But in the case of Man Utd, knowing what we do, it is really hard not to.
Refusing to let Romero go to Everton is quite a good example. According to reports Everton made an offer off £2 mill in loan fee in addition to covering his salary. We rejected the offer and as a result, Romero stayed for a year costing us £100 000 a week. In total, Man Utd lost £7 mill on that decision.
This appears to be the case again with Martial where we, according to reports, are refusing to budge, insisting that Sevilla cover his salary and pay a loan fee. And it is probably the case with many more players on our books. Why do we do it?
A) In some cases we hope that the players desire to play football will make them give up part of their salary,
B) Want to avoid reputation of being a pushover in negotiations,
I think we have seen examples of both in the past. If I am not mistaken, both Sanchez and Rooney agreed to take a wage cut to leave with the prospect of playing more football. The club might even also argue that their «never split the difference»-approach made Leeds pay up for Daniel James in the end. However, I think they would find it difficult to justify their approach overall.
It is almost as if you wonder if our management is afraid to make previous errors (paying our players to much) transparent to the owner. Covering the salary of a player we have lent out, or letting players go for free due to their high salary, would expose previous errors.
A huge consequence of failing to let players go is a squad with players sulking. It makes us less attractive to our young players, the negative publicity hurt the brand, but first and foremost it makes it very difficult to build a successful team. How can anyone expect us to build a winning mentality when we have several players in the squad who have their minds elsewhere? Probably unhappy about their current situation. Are they likely to raise the bard in training? Ensure that their is a competitive environment in the squad? Or are they likely to be a bit careless? Lacking focus? And that their mindset spread to other players in the squad?
In short, becoming more effective with transfers should be priority number one for the new CEO. Rule number one, dont makes silly mistakes when handing out contracts. Rule number two, if you do, take the cost and gid rid fast.