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The Sports Gambler Who Turned $700k Into $300M
Brentford FC won the "World's Richest Game" this past weekend, but their belief in analytics is even more interesting.
Brentford FC beat Swansea this past Saturday in the “World’s Richest Game” — the Championship Play-Off Final — earning the Bees a promotion to the English Premier League and the roughly $300 million in guaranteed money that comes with it.
Even more interesting?
Less than a decade ago, with the club facing financial stress, a professional sports gambler invested about $700,000 into the club — eventually taking over as team owner in 2012.
That man was Matthew Benham, and this is his story.
As a notoriously private person that has participated in just a few public interviews over the last decade, Matthew Benham has become one of the most interesting stories in sports.
He graduated from the world-renowned University of Oxford in 1989 with a degree in Physics, spending the next 11 years working in various investment banking and insurance roles. But in 2001, Benham accepted a job as a trader for Premier Bet, learning under one of the most successful gamblers in the world — Tony Bloom (source).
Matthew Benham and Tony Bloom had a falling out, but by the time Benham left Premier Bet, the fire was already lit. He wasn’t going back to investment banking. He was a professional sports gambler now.
It’s unclear how much Benham made gambling on sports, but in 2004, he set up his own betting syndicate, Smartodds. The concept was simple: Benham would consult clients using the same algorithms, statistics, and data research that made him a successful sports gambler.
The business has been a massive success and Benham now also owns Matchbook, a popular sports betting exchange. This is where Brentford FC comes in.
Along with algorithms, statistics, and data, Matthew Benham has also been a lifelong fan of Brentford FC. He attended his first game as an 11-year-old and even remembers the score. So when the club faced financial trouble in 2007, Benham stepped up.
Brentford supporters banded together to buy the club, making Brentford FC the first professional club in London owned by the fans. But there was a catch: a large portion of the money used to purchase the club was provided via loans from a “mystery investor.” That turned out to be Matthew Benham.
When the fans decided not to repay the loans in 2012, Benham was given the opportunity to purchase the club, becoming the sole owner of his childhood team.
But unlike other wealthy individuals that purchase lower-tier English clubs, invest in players, personnel, and resources, and hope to gain premier league promotion, Matthew Benham had a different idea. He wanted to use analytics — otherwise known as “Moneyball.”
Benham spent almost $10 million on a smaller club in Denmark — FC Midtjylland — to test his analytical concepts. The ideas that worked, he transported to Brentford FC. The ideas that didn't, he threw in the trash.
He fired multiple staff members, bringing in more analytically-minded professionals that lacked traditional experience. The club stopped caring solely about wins and losses. Instead, they developed a set of key performance indicators (KPIs) that determined if they were making progress or not.
For example, Brentford FC started to look more closely at “expected goals” — based on the quality and quantity of chances created during a match — rather than how many goals a player actually scored.
This allowed them to find undervalued players, or market inefficiencies, that could come in, play at a high level, help the club win, and be moved on for record profits.
Here are a few examples (source):
Brentford invested $3.8 million in Said Benrahma, eventually selling him to West Ham for $40 million.
Brentford paid $2.3 million for striker Ollie Watkins, eventually selling him to Aston Villa for $36 million.
Brentford paid $2.1 million for Neal Maupay, eventually selling him to Brighton & Hove Albion for $26 million.
While the top clubs in the world were investing millions of dollars in their youth academies, Brentford FC decided to eliminate theirs completely. Instead, they relied on a “B team” of 17-to-20-year-olds that had been rendered useless by other clubs.
Why? Because Brentford believed you had to give a young player at least 35 games before determining his value, but the richest teams in the world didn’t have the time, patience, or appropriate infrastructure to do that. As a small club willing to experiment, Brentford did.
The results weren’t immediate, but now a decade later, with Brentford returning to the Premier League for the first time in more than 70 years, the analytical approach has clearly paid off.
The true financial impact of Premier League promotion will depend on how long Brentford FC can stay in England’s top league.
If they get relegated after one season, like 40% of promoted clubs do, they’ll make about $250 to $300 million. But if they can stay up for a second year, they’ll make over $400 million. The longer they stay up, the more money they’ll make.
In the end, Matthew Benham believed analytics provided a unique edge in a low-scoring sport that has historically been skewed by randomness & luck. With promotion to the Premier League, he was proven right.
It will be interesting to see how Brentford’s success potentially shifts the long-believed concept that analytically-based equations can’t determine future success in professional soccer.
Have a great day, and I’ll talk to everyone tomorrow.
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