Why two multi-millionaire actors bought a football club in North Wales?
As humans, we’re pretty bad at judging our own abilities. From sports and exercising to our jobs and sense of humor, we all estimate ourselves to be far above the average. Unfortunately, the law of averages would tell us that most of us probably aren’t. What’s worse is that in a lot of cases we’re far worse than we think we are.
Author’s note: I am an above-average driver — everyone else on the road sucks. I am above-average funny — some people just don’t get my jokes. Finally, if (after a few beers) you tried to tell me I was a BELOW-average dancer…you would be mistaken.
Our inability to recognise our own shortcomings has a name: ‘Illusory Superiority’. Illusory Superiority was a term first used in 1991, and is a cognitive bias that causes us to overestimate our positive qualities and underestimate our negative qualities. Essentially, we’re hardwired to delude ourselves. Illusory Superiority is evident in all walks of life and academics have studied and found evidence of it in academia, professional organisations (particularly in recruitment), relationships and driving ability to name a few.
In many ways, it is no great issue that we tend to overestimate our abilities. In fact, in many ways it helps us greatly. It often gives people the confidence to pursue work and ventures in environments where experience and practice would have warned them off early on. It allows us to get excited about new experiences without the handicap of knowing we are bottom of the pile. In many cases, like launching a startup, ‘ignorance is truly bliss’.
The Dunning-Kruger Effect
It’s the Dunning-Kruger effect, NOT Diane Kruger effect
However, there are obvious downsides to Illusory Superiority. When we’re blissfully ignorant of our skills, we can’t work toward improving them. More importantly, people who lack the skills or abilities for something are also more likely to lack awareness of their lack of ability. This was discovered by Justin Kruger and David Dunning, from Cornell University in their 1999 study, “Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments” The phenomenon became known as the Dunning-Kruger Effect.
Dunning and Kruger’s work showed just how common Illusory Superiority is. You may now recognise it in yourself. As you start to learn a new skill or activity your progress is rapid — you learn quickly and make progress fast. This makes you feel like you are really good at the skill, a natural perhaps and pretty soon you feel like you’re the dog b******s. You have only learnt enough to be able to perform the skill, but have not yet learnt enough to realize what you don’t know. As you then gain knowledge, you begin to realise just how little you know, your confidence will plummet as your inferiority dawns on you. If you choose to continue to work on building your knowledge by learning, practicing and gaining experience, your level of confidence will rise until it eventually matches your ability.
The graph above is a great illustration of the D-K Effect. I can see myself standing proudly at the summit of Mount Stupid when it comes to certain areas of knowledge. In other areas, I am in the Valley of Despair, and finally in very few categories I am climbing the slope of enlightenment as my knowledge and confidence slowly grow.
Many people make decisions on the top of Mount Stupid. As previously discussed, these can be good decisions and can inspire innovation and progress by those free of the shackles of knowledge and expertise. However, when these people are celebrities, people who have been lured into thinking they are wonderful, smart and not only above average but through their acquisition of wealth and popularity believe they are better than everyone else and worthy of their praise, the gaps in their knowledge often present themselves with embarrassing (often deserved) failures.
There are thousands of celebrities who are experts at a given craft, honed over a lifetime and usually given the recognition they deserve with global acclaim and financial success. Footballers, musicians, actors and chefs to name a few. Many of them live off the success of their singular careers for a lifetime however, others fall victim to a very specific case of Illusory Superiority, namely the idea that success in one area, where they are experts, translates into another, where they are not. These celebrities make decisions at the peak of Mount Stupid, investing time, money and resources into areas they think they know a lot about, but really know very very little. Sometimes, their luck comes in and they can wax lyrical about having a 6th sense for money making opportunities BUT I can list many times where it has not*:
Jamie Oliver: An excellent cook. But a bad restaurateur. The Jamie Oliver Restaurant Group collapsed in 2019.
Britney Spears: One of the most successful pop stars of the noughties. Terrible actress. Spears’ 2002 cheesy road trip movie “Crossroads” was panned by critics and currently has an abysmal 14% rating on movie review site Rotten Tomatoes.
Naomi Campbell: Great at being ‘really really good looking’. Very bad musician. Campbell released her one and only album, “Baby Woman,” in 1984. It was panned by critics and only sold 175 copies in the first two weeks of its release, The Guardian reported.
Hulk Hogan: Iconic WWE star. Failed pasta restaurateur. Turns out people didn’t want to eat “Hulk-Us” or “Hulk-a-Roos” at Pastamania.
And a personal favourite…
Dion Dublin: Former Premier League Golden Boot winner. Awful musical instrument inventor. Dublin created the box-shaped percussion instrument ‘The Dube’.
Dion Dublin Dubing his Dube Deftly
*Many, if not a majority, of celebrities make very wise investment decisions through financial advisors and recognise the value of external counsel in growing their wealth. I am talking here about those who have a career. The celebrities who are confident their skills translate. These celebrities are rarer and usually fail.
With all this in mind, the Illusory Superiority, the examples of celebrities taking on something new and failing spectacularly. Imagine then reading the headline, ‘Hollywood A-listers Ryan Reynolds and Rob McElhenney get fan approval for Wrexham takeover’.
Ryan Reynolds WHAT? Rob McWHO? And Wrexham WHERE?
Ryan and Rob, a tale of Hollywood meets North Wales
Yes. Ryan Reynolds, the Canadian born Hollywood superstar has teamed up with the less well known (in the UK) ‘It’s Always Sunny in Philadelphia’ actor Rob McElhenney to buy the North Wales, National League Club…Wrexham Association Football Club.
A clear case of Illusory Superiority?
At first glance, it seems like a clear case of cognitive bias. Two successful actors mistakenly think they can run a football club. So why have they bought one and why Wrexham? The audit and consulting giant KPMG, lists 4 motivations behind buying a professional football club as illustrated below.
Strategic Capital (Political Owners): Buy football clubs for positive PR and global brand building as well as to advance their own geopolitical motivations and network of contacts. Think the Saudis, the Chinese or any other questionable regime who is looking to expand their ‘soft power’ by acquiring European clubs. AKA Sportwashing.
Economic Capital (Global Owners): Buy football clubs to maximise financial gains, to avoid paying tax or to speculatively invest in the hopes the club can be promoted or expanded into new markets and eventually sold for a profit. Examples are the Glazer family at Manchester United and Wesley Edens at Aston Villa.
Local ownership (Cultural Capital) and Supporter ownership (Social Capital): Clubs are often part of the social fabric of the local community and therefore local owners can be seen as benevolent or ‘giving back’ in taking on a local club. Furthermore, fans have the greatest motivation to own a football club and many of the largest clubs in the world are still owned by the fans, including Real Madrid, FC Barcelona and Bayern Munich.
It seems that Ryan and Rob don’t really fit the bill for any of these traditional buyers. As far we know they are not acting on behalf of a gulf state trying to use sport as way to draw attention away from human rights abuses, nor are they Wall Street Financiers who have spotted a drop in market value and want to take advantage of the skyrocketing media rights revenues, (especially in the UK) and increasing financial sustainability fostered by the introduction of Financial Fair Play regulations in order to gain dividends and capital growth. Finally, Rob and Ryan have no local connection to North Wales as one is Canadian and the other Irish American so social and cultural capital are out of the equation.
Wrexham railway station…the end of the line
Chris Anderson, a Professor at the London School of Economics (LSE), has talked about Oligarchs role in football, buying clubs as they do super yachts, as trophies to show they have more money than everyone else. Again, Ryan and Rob have both had successful acting careers but even with Ryan’s recent success with Aviation gin, their combined net worth isn’t exactly the kind of FU money needed to buy into the top end of the Premier League.
A new motivation to buy a football club?
So if Ryan and Rob have decided to buy Wrexham AFC for a reason other than the ones listed by KPMG, the argument for Illusory Superiority surely grows stronger…or does it?
When we deep dive into KPMG’s matrix it would seem that in fact all people looking to buy football clubs are doing so for the wrong reasons and make for bad long term businesses. Many drive the inflation of broadcast revenue, extract value in the short term or leverage debt against the organisations they buy (GLAZERS OUT). Others pump a ton of cash into the entity to fuel their own ego but in-turn abolish any hope of a healthy, sustainable operation.
Finally, private buyers of football clubs tend to have a singular area of expertise…finance. The goals these financiers then set for the club are primarily financial and the focus will usually be on some sort of exit down the line, be it five, ten or fifteen years down the line. This couldn’t be more evident in this year’s rush of private equity firms (Eg. CVC and Silver Lake) buying stakes in football clubs across Europe.
The business of sport however, runs on a different fuel and value is generated very differently to the way financial firms generate profit. A football club’s value is tied up within its brand and its ability to market itself and others to its audience. Manchester United makes the majority of its revenue, not through ticket sales, corporate events or even merchandise. Manchester United makes their money from partnerships and brand association. Their value is tied up in their ability to market another company’s products to an energised and passionate audience who are more likely to buy from a company who supports their passions and interests.
Illusory Superiority…maybe not…
Ryan Reynolds and Rob McElhenney just might be the perfect people to buy a football club. Now, I am not saying that Wrexham will tearing up the Champions League in ten years time but if there are two things that Ryan and Rob clearly understand and have strong track record of, it’s building powerful, authentic brands that people emotionally buy into and secondly creating world class content to drive those brands into profit machines.
Ryan Reynolds to start, is best known as the star, producer and co-writer of the Deadpool films. For the first Deadpool film he launched Maximum Effort Productions with ex-McCann creative George Dewey to promote the franchise, and installed himself as creative director. He named it Maximum Effort, after a Deadpool catchphrase.
Reynolds is quoted by Forbes as believing in “having skin in the game.” Not only does he create the advertising, he has a financial stake in many of the companies he’s advertising. (Which, incidentally, can pay off handsomely. Aviation American Gin was sold to Diageo for $610 million within two years of Reynolds’ involvement).
Reynolds is also pioneering a new style of vertically integrated marketing. His ad agency doesn’t just create content but provides his own channels. Reynolds has 36 million followers on Instagram and more than 16 million on Twitter, and he is using social media to extend the advertising message. Cameos in ads from his network, including David Beckham (could be handy for Wrexham), Richard Branson and Hugh Jackman only add to the hype surrounding his work.
Maximum Effort is small and lean, with no red tape to cut through and no bureaucracy to get through. As with his movies, Reynolds keeps budgets at modest levels. It means he has the ability to be nimble and go. Speed is essential to his approach. Working under self-imposed deadlines and small budgets (good news for the Welsh outfit) means expensive sets are swapped out for local locations (say…North Wales) and scripts are whittled down to the bare bones of the ideas.
Rob McElhenney does not have an agency background and nor, to my knowledge, does he have any experience in selling gin. However, Rob is an expert content creator. He is creator, writer, producer, director and a lead actor of sit-com ‘It’s Always Sunny in Philadelphia’. The show has been a monumental success since it first aired in 2005 with the New Yorker describing it as “not merely the best sitcom on television but one of the most arresting and ambitious current TV series, period.” and the BBC called the show “the best US sitcom”.
What’s occurring?
Could it be? Have we got two commercially minded, gifted creatives at the helm of a football club in an industry where almost all the revenues come from media and marketing?
To me, Ryan and Rob have a recipe for success. Sure, they’ll need a number cruncher in the background to take care of the balance sheet but we have finally got owners of a UK football club who understand media and content creation, how to market it and most importantly how to build a commercial proposition on that IP. To put it simply, we have marketeers at the head of a business whose primary revenue stream is marketing.
The pair have committed to investing £2m in the club and to to turn it into a global force. “This is the third-oldest club on the planet and we don’t see why it can’t have a global appeal,” said Reynolds. “We want Wrexham to be a global force.” No wonder 96.8% of the Wrexham board backed R and R’s bid.
Hence, unsurprisingly, the rumour mill is already turning with whispers of a Netflix deal for Wrexham FC. If Ryan and Rob’s past are anything to go by, you can expect these rumours to be true. Wrexham AFC are likely to do very well from this deal. They have clued up, benevolent owners whose impact and spotlight will benefit not just the club, but North Wales and the rest of the National League. Illusory Superiority? I think not.
Winning on the Hill?
As we finish every article on here…can Ryan, Rob and Wrexham AFC ‘Win on the Hill’. In short, Yes. Despite the lack of fans allowed into the ground and the UK’s sports industry in disarray the two actors and their football club still have the capital and the vision to win in a streaming first world where the drama on the pitch is only part of the story.
