Finding Your Firm’s Neymar
August 11, 2017
The sports world is still in hysteria over soccer club Paris Saint-Germain paying a record-breaking $263 million transfer fee to acquire 25-year-old Brazilian star Neymar. But it was an overlooked comment by PSG President Nasser Al-Khelaifi that truly underscores for organizations and leaders the value of star player with paychecks big and small.
Al-Khelaifi said that simply signing Neymar, who scored a goal in his PSG playing debut, added $500 million to the franchise’s value immediately. Over time, Neymar's addition to the team will double its worth to $3 billion. If all that comes to pass, then Neymar’s total $600 million-plus compensation package—$263 million paid to Barcelona to release him from his contract and an additional $350 million in salary and bonuses to play for PSG for five years—will seem like a bargain.
Of course, most CEOs and other corporate leaders don’t often approach Neymar’s compensation package. But that doesn’t mean they can’t contribute similarly to an organization’s growth. “Most successful players and executives are highly motivated,” says Jed Hughes, vice chairman and global sector leader for sports at Korn Ferry. “Their motivation comes from within. The hardest thing to measure is the commitment and discretionary effort someone will give to a club or organization.”
Neymar, who doesn't use his full name publicly, says he isn’t motivated by money but by happiness. In that regard, he is not unlike most millennial workers—whether they be soccer players or marketing executives–who rank culture and future career opportunities ahead of compensation and benefits as the main reasons to join an organization.
For PSG, the value proposition in signing Neymar isn’t in how many goals he scores or how many games the club wins. Rather, it is in his ability to enhance the club’s brand and power on a local and global level by virtue of his performance on the pitch. The same is true of corporate leaders: their ability to enhance the organization’s brand and market power to grow the business is what differentiates them for the rest.
In order to harness that value, however, leaders have to optimize the role of star players. “Coaches have to structure the team and game plan in a way that takes advantage of a star player’s capabilities,” Hughes says, adding that organizations need to do the same thing. “If star players aren’t used in the correct way, motivation goes down and hurts overall performance.” In much the same way, the success of star leaders is contingent on how they are integrated into the team, how the team is changed because of their presence, and how teammates react to their arrival.
Neymar’s signing runs parallel to the corporate world in another respect: more so than any other sport, soccer is an inherently free market. Unlike basketball or football, for instance, there is no salary cap in soccer, which means that players can get their true market value. (The US’s top league, Major League Soccer, has a salary cap but there are loopholes to recruit high-priced players.) It’s the same thing in the business world, where there are no restrictions on base salary, stock options and other incentives needed to hire the right leader.