Our results in the previous section reveal that, on average, performances improve after the replacement of a manager, but the improvement is not causally related to the change. This is in line with previous studies. Nevertheless, there is a clear heterogeneity in the effects of a managerial change when we look at individual managerial changes. Figure 2 presents a scatterplot of all 61 changes included in our sample. The horizontal axis refers to the change in cumulative surprise after the managerial replacement. The vertical axis indicates the change in cumulative surprise for the control group.Footnote 11 For the sake of clarity, we added a diagonal that indicates equality of equal change in cumulative surprise for the treatment group and the control group. Observations above the line represent cases in which the control group did better than the treatment group, suggesting that the change was ineffective or even counterproductive. Observations below the line represent cases in which the managerial change was effective. Furthermore, the closer the observations are to the line, the more equal the development of the two groups is. Many observations are fairly close to the diagonal, which suggests that the managerial change was ineffective, thus supporting our average result. However, a substantial number of observations are at a fairly large distance from the diagonal, suggesting that some changes are quite effective, while others are counterproductive.
To investigate whether there are particular reasons for effectiveness or ineffectiveness of a managerial change, we selected three managerial replacements to discuss in more detail. First, we look at Chelsea FC, with treatment season 2011/2012 and counterfactual 2010/2011. This observation is indicated as a ‘diamond’ in Fig. 2. The close proximity of the ‘diamond’ towards the diagonal line suggests hardly any effect at all. Second, we discuss Leeds United FC, with treatment season 2003/2004 and counterfactual 2000/2001. This observation is indicated as a ‘triangle’ in Fig. 2. The position of the ‘triangle’ suggests a strongly negative effect. Third, we examine Newcastle United FC, with treatment season 2005/2006 and counterfactual 2012/2013. This observation is indicated as a ‘circle’ in Fig. 2. The position of the ‘circle’ suggests a substantially positive effect. All three cases concern the dismissal of the manager.
Chelsea FC
André Villas-Boas moved from FC Porto to Chelsea FC in the summer of 2011.Footnote 12 The Portuguese manager, only 33 years old at the time, had just guided the ‘Dragões’ (Dragons) to victory in the UEFA Europa League. Rumour has it that the London club paid a transfer fee of approximately 15 million euro. Villas-Boas soon presented a 3-year plan to take the London club to the top of Europe. Yet, Chelsea-owner Roman Abramovich had already run out of patience after little more than 8 months. The Russian club-owner held the manager responsible for the disappointing results. Thus, on 4 March, 2012, Chelsea FC sacked their Portuguese manager. Former Italian midfielder Roberto Di Matteo, previously an assistant to Villas-Boas, took over, initially only as a caretaker. At the end of the season, Chelsea were sixth in the table. However, Di Matteo guided them to their first ever victory in the UEFA Champions League (UCL). Moreover, Chelsea also won the FA Cup under his supervision.Footnote 13
Carlo Ancelotti became the Chelsea FC manager in the summer of 2009. The former Italian midfielder had guided AC Milan to two UCL-victories (2003, 2007). In the 2009/2010 season, he led Chelsea to the double, viz. both the EPL and the FA Cup. However, Chelsea lost both prizes in the next season. Abramovich sacked Ancelotti immediately posterior to the last match of the 2010/2011 season. One month earlier, rivals Manchester United FC had eliminated Chelsea FC in the quarter finals of the UCL, a trophy then still absent in the club’s boardroom. This has probably been a crucial element underlying this post-season sacking.
Figure 2 immediately makes clear that the difference between the control season (2010/2011) and the treatment season (2011/2012) is negligible. Moreover, the decline in cumulative surprise after the (hypothetical) change in manager is about equal for both seasons (see Fig. 3a). The efforts that resulted in winning two trophies probably explain the disappointing results in the EPL in the treatment season, despite replacing the manager, who apparently was a mismatch. After all, the importance of the FA Cup may have decreased in the twentyfirst century, but the UCL is, no doubt, the biggest prize in European club football.
Leeds United FC (LUFC)
In the 2003/2004 season, the debts of Leeds United FC were assessed as astronomically high, at around 100 million pound sterling.Footnote 14 Consequently, LUFC had to go on selling quality players, weakening their squad. The board sacked manager Peter Reid, a former England international midfielder, on 10 November 2003, a few months after his arrival at Elland Road. At that time, LUFC had gained no more than eight points from a dozen EPL matches. Eddy Gray, an all-time club-hero, took over as a caretaker. Initially, the results got better under his supervision: LUFC even moved out of the danger zone at the end of 2003. However, they subsequently lost seven matches in a row. Yet, the ‘Whites’ succeeded in bouncing back a little, one more time. However, in the end, relegation was inevitable.
David O’Leary was in charge at Elland Road from 1 October 1998, when he succeeded his former boss George Graham, until the summer of 2002. At that time, the board sacked him. O’Leary had been allowed to spend more than 100 million pound sterling in the transfer market, without winning any trophy. O’Leary’s team seriously dipped during the 2000/2001 season, but they recovered. These plunges may be ascribed to the lagged fatigue effects and leading anticipation effects of UCL matches, at least partly. In April 2001, LUFC reached the semi-finals of the UCL/European Champions’ Cup for the first time since 1975.
Figure 2 makes clear that the difference between the control season (2000/2001) and the treatment season (2003/2004) is positive. Moreover, Fig. 3b demonstrates that the cumulative surprise developed unfavourably after the managerial change in the 2003/2004 season as compared to the same period in the control season.
Newcastle United FC (NUFC)
Newcastle United FC experienced a turbulent summer in 2005.Footnote 15 Rumours concerning the club-ownership, the departure of some star-players and the failure to qualify for Europe via the UEFA Intertoto cup (UIC) all contributed to the turmoil. Meanwhile, the Scottish manager Graeme Souness, a former Liverpool FC-hero, bought some first-class players, including England striker Michael Owen, who returned to England for 17 million pound sterling, after one season at Real Madrid.
Initially, Owen nicely co-operated with Alan Shearer, the latter in his final season as an active player. However, Owen got seriously injured on New Year’s Eve. After that, the form of the team decreased severely. One month later, the NUFC board sacked Souness. A stiff battle against relegation then seemed to lie ahead for the ‘Magpies’. The 2005/2006 season then seemed to lack any prospect for the ‘Magpies’. Glenn Roeder, director of the youth academy, took over as caretaker. He guided the team from the fifteenth place to the seventh place, thus even capturing an UIC spot. The team won no less than nine matches out of the remaining 14 matches in the EPL. Irish national goalkeeper Given and Shearer uttered afterwards that Souness had never been a fans’ favourite and that his preference for certain players had been devastating for the team spirit. However, injuries had also been a crucial element in their dipping form.
In the 2012/2013 season Alan Pardew guided NUFC to the 16th place. Thus, they avoided relegation. In the FA Cup and in the Football League Cup, they only lasted one round. However, NUFC did reach the quarter finals of the UEFA Europa League, which might explain their disappointing performance in the EPL and the domestic cup competitions, at least partly.
The chemistry between Souness and part of the team had apparently gone during the treatment season (2005/2006). Moreover, the mighty fans of the ‘Magpies’ did not appreciate his work. Under such circumstances, the replacement of a manager may be an inevitable measure. During the control season (2012/2013), NUFC were mediocre in all three domestic competitions. This may be explained from huge European efforts. Thus, it is hardly surprising that the difference between the treatment season (2005/2006) and the control season (2012/2013) is positive, as Fig. 2 makes clear. Furthermore, Fig. 3c demonstrates the cumulative surprise developed favourably after the managerial change in the 2005/2006 season as compared to the same period in the control season.