By John Considine

Last September, An Assessment of the Economic Benefits of Sport in Ireland was published.  It was commissioned by the Federation of Irish Sport (the representative organisation for the National Governing Bodies of Sport and Local Sports Partnerships in Ireland).  Investec Economic Research were commissioned to do the analysis.  In many ways the publication was an update of a 2010 report by Indecon International Economic Consultants and commissioned by the Irish Sports Council.

The Investec reports reminds us of the importance of local authority funding of sport in Ireland.  Using 2018 figures from the Local Authority Budgets, the reports documents how just over €54m was spent on "Community Sport & Recreational Development".  In the same year, Central government spent €114m via the Department of Transport, Tourism and Sport.  There can be little doubt but that local authorities make a significant contribution - even on this somewhat narrow definition of sport expenditure.

One could make a case to included local authority expenditure on "Outdoor Leisure Areas" (€126m) and "Leisure Facilities" (€38m).  This brings the expenditure to a total of €218m.  On this count local authorities, contribute 66% of public funding.

The numbers are presented differently in the Investec report.  Here is the relevant paragraph.

"Data from the Department of Housing, Planning and Local Government for local authorities' budgeted spend show that the annual spend on Sports and Recreation is €452m, or 78% of total State expenditure on this area.  However, within that, only about half pertains to sport, with the balance on areas such as libraries and the arts."

Regardless of the way the local authority contribution is presented, it is a very important component of the public funding of sport in Ireland.

By Robbie Butler

Ireland's Economic and Social Research Institute have issued revised scenarios for economic activity in 2020. The projections have changed from gross domestic product increasing by around 3.5%, to a deep contraction in the order of 7.1%. 

Some have argued already that 7.1% might be on the conservative side, and that the Irish economy, which is driven by exports and imports, could contract by an even greater extent. Might we even surpass the 9% contraction of 2009 in the depths of the Irish banking crisis?

The fallout from the crisis will be extensive and long-lasting. The economic, political and social ramifications will probably last years. Right now however, the focus is on getting from one day to the next. Sadly, another 10 people lost their lives yesterday in Ireland due to Covid-19. This brings the total number here to 19. We can only hope that the actions of the vast majority of Irish people, and people around the world, will help slow the spread of this virus, so than 

Such actions have come at a cost. Restriction of movement requires sacrifices. Not seeing family, grandparents in particular, isn't easy. However, it is a price that is worth paying. Movements have been largely reduced to essential activities - basically trips to the supermarket or pharmacy.

The other form of movement encouraged is physical exercise. People have been advised to stay active by walking, jogging or running. This benefits both physical and mental health.

It seems to be very successful. I have noticed a marked increase in the number of people passing our house, at various speeds, over the past 2 weeks. In fact, the number seems to be growing daily. Not only have I witnessed this, but I have also been part of the increase.

Normally at this time of the year, my road running distance covered would be 0km. This only starts in mid to late April with our focus on the Cork City Marathon in early June. 2020 has been different. So far this year I have run nearly 26km in the past 9 days. I suspect this will grow in the weeks ahead, despite the cancellation of the Cork City Marathon until September.

The Covid-19 pandemic is going to leave many legacy effects. People might queue much further apart in shops in the years ahead. Handshakes might become a thing of the past. Working from home may become more frequent. Let's hope greater physical activity becomes habit and is retained long after this crisis passed. And pass it will. 

On the 30th of September 1859, Abraham Lincoln recounted the following story:
It is said an Eastern monarch once charged his wise men to invent him a sentence, to be ever in view, and which should be true and appropriate in all times and situations. They presented him the words: "And this, too, shall pass away."  How much it expresses! How chastening in the hour of pride! How consoling in the depths of affliction!

By Robbie Butler

While most popular team sports globally follow a playing season that mirrors that of the academic cycle (Aug-May), there are some examples of those that do not. On these islands netball, rugby league and most domestic soccer in Ireland are exceptions and play through the summer. However, the most obvious example of this in Ireland can be witnessed in Gaelic Games (GAA).

While GAA is now effectively played all year round with clubs, county, schools and 3rd level matches scheduled from January to December, the most significant games are held between around April and September. Under normal circumstances we would all be preparing for upcoming inter-county games across all codes of the sport (football and hurling). Sadly, Covid-19 has put pay to this and one can only wonder when the Championships will commence.

The competition design of these must now be under consideration. For more than 100 years, counties played each other based on geographic location, across 4 different provinces. A straight knockout system was employed so that the 4 area winners met in 2 semi-finals and a final. The winner of the final was crowned the All-Ireland Champion. 

In the late 1990s and early 2000s, both hurling and football deviated from the traditional competition style and a "back-door system" was introduced. Put simply, this separated the provincial championships and All-Ireland series so that counties had 2 chances of success but could only be beaten once in either competition.

Further changes have happened over the years and the system is now quite complicated for passive observers. For example, the football championship goes from knock-out (Provincial Championship) to league (Super 8s) to knock-out (All-Ireland). The upshot of all these competition changes is more games. More games means more tickets sold in total (average match attendance has declined) and more broadcasting revenue.

Attendees at our recent research event in county Kerry will also know that the design changes also decreased competitive balance. John Considine's research demonstrated this and provided an insight into how stronger teams are now more dominant. Removing a straight knockout reduced the role of luck and has made it harder for underdogs to win outright. 

The pandemic we find ourselves in has seen the postponement of the GAA Championships. Assuming it can restart in June or July, this could mean a reduction in the number of games. Could a return to the traditional knockout format be the solution? It served us well for more than 100 years and could be employed for a one-off event under these unprecedented circumstance. 

If straight knockout is introduced, the chances of a shock winner will increase. Less traditionally successful teams would only have to beat one of the "big" counties once to end their season. The likes of Dublin, Kerry, Kilkenny and Tipperary will only get once chance. It could result in winners like Galway, Wexford, Mayo or Waterford. The latter two are waiting a combined 130 years to regain the titles that last one.  

For example, in 2004 Wexford shocked Kilkenny to win the Leinster Championship. Waterford did the same in Munster to win only their seond title since 1963. Under the old rules both would have reached the semi-finals and competed with Antrim and Galway. One, if not both, would have almost certainly made the Final. Neither was in the All-Ireland Final. Instead Cork played Kilkenny, both of which had lost their respective provincial finals.

What excitement a return to a straight knockout would bring. Competitive balance may be the biggest winner of all. 

By John Considine

Last week, my brother sent me an image from Twitter (reproduced on the right hand side).  It suggest that family planning could aid the success of the local team.  Followers of this blog might point to some supporting evidence in a paper by David and Robert Butler (available here).

Malcolm Gladwell did much to popularise the idea of a relative age effect in Outliers.  The book highlighted the luck associated with the time of one's birth.  There was a discussion of the relative age effect as we would normally know it.  Kids with a birth date at the start of a competition year are at an advantage.  Gladwell also discussed other ways people got lucky or unlucky based on the timing of their birth.  For example, those who eventually went on to become legal professionals did much better if they arrived on the jobs market during the Mergers & Acquisition boom in the 1980s compared with those who arrived on the job market in the 1930s.  Gladwell also documents how Steve Jobs and a variety of other successful technology people were born during a relative short time span in the early 1950s.

If one believes the traditional poem about birth days then one might believe it is lucky to be born on a particular day.  Sunday [the sabbath for many] might be one such day.  If that is the case then many Irish kids are at a disadvantage based on 2017 data.  A large proportion of births are on a Wednesday (Wednesday's child is full of woe).

The graphic above suggests that some element of family planning is possible.  My guess is that there are a fair number of planned arrivals in the above cohort.  Would I be incorrect to suggest that the arrivals suit the medical profession?  Sometimes we might want a condition to peak rather than flatten the curve.

Is it possible to plan one's family to aid their sporting chances?  Let us turn to the education sector (where I think the RAE literature started).  Urban legend has it that teachers in Ireland plan the arrival of their children better than most.  The structure of the school year plus the structure of maternity benefit should make this easy to test.  If only we had the data.  The Central Statistics Office publishes births by occupation but not combined with birth day, week, or month.  A pity.

By Johan Rewilak

The coronavirus (Covid-19) outbreak has put a dramatic halt on sport with the NBA, MLS and the PGA tour cancelling scheduled events (CBS Sports), and professional football in England suspended until now the end of April (The FA). There has been much speculation about how sport will move forward, in particular, professional football.  Euro 2020, has been postponed until Summer 2021 (BBC). In my opinion, this is the right decision as the health of the population is of utmost importance.  However, rescheduling the competition has left some interesting questions awaiting to be answered.

The most important question is; how will it impact the Women’s Euro 2021 Championships?  This tournament, which will be hosted in England (The FA) commences from July 7th until early August, giving the players approximately a month to rest before the Women’s Super League and other top European leagues begin play. At present, the postponed 2020 men’s tournament was scheduled to begin on the 12th June, (UEFA), lasting until mid-July.  If the men’s tournament is delayed by exactly 12 months, there would be some overlap in the two competitions. 

Whilst, stadium clashes will be avoided, will rescheduling the men’s competition next summer, overshadow the women’s tournament? Or will it provide some momentum for the women’s game?  This is a delicate balance. 

The World Cup last year provided a huge platform for the women’s game and showed how popular women’s sport truly is. England’s World Cup semi-final last summer versus the USA drawing a peak television audience of 11.7m viewers, (BBC).  The growth in the women’s game has been further demonstrated at the domestic level, with far larger attendances in the Women’s Super League this year. Television exposure has been argued to have driven this increase.  Therefore, the issue of broadcasting then becomes important.  Assuming the tournaments do coincide with one another, what is the likelihood that the later stages of the men’s game will take precedent over a women’s group game? Should it?

So given the current Coronavirus situation, what options are available to policymakers at UEFA? (i) To delay the men’s tournament by exactly twelve months and hope it provides enthusiasm for the women’s tournament that will occur with a slight overlap. (ii) either move the men’s tournament a few weeks earlier, the women’s tournament a few weeks later or a combination of both.

Of course, there may be severe implications with either strategy. Moving the women’s tournament may send out an incorrect signal, that UEFA are not that serious about gender equality in football, as it becomes a make-weight of a postponement in the men’s competition, (UEFA). This would be a time-sensitive decision given the recent resignation of the President of US Soccer for certain comments he made in relation to women’s football, (US Soccer) and the recent decision by the FA regarding the Lionesses travel arrangements to the She Believes Cup (The Times).

This may imply that UEFA looks to move the men’s tournament slightly earlier. However, the ability to do so would seriously depend on how it plans to conclude the current season.  In addition, with a full calendar next season, it would be very difficult to bring the men’s tournament earlier, without giving players the necessary amount of rest, or changing the format of competition next year. 

Overall, the decision to postpone Euro 2020 and reschedule it a year later seemed the obvious choice.  However, my concerns are that whether the implications on the women’s game were seriously discussed. For the time being, I’m sure UEFA will be thinking, “Let’s cross that bridge when we come to it” whether rightly or wrongly, when European football resumes.

Dr Johan Rewilak is a lecturer in economics at Aston University Birmingham, England.

By Ed Valentine

Will Liverpool be awarded the title? What about relegation? Is Euro 2020 (2021) going to be moved to a single location? The football questions and comments are Twitter timelining past our eyes quicker than the rolls change on a fruit machine. In a sporting context much of the focus has been aimed on the big money Premier League and Champions League. With reduced economic activity taking place across the world sports professionals are forced to upload social media posts of paint-dry wit and humour to pass the time. While the highly paid mega starts may be financially immune the more modest sporting outfits are faced with some difficult choices.
 
Much of the headline talk of the Premier League, the Euros and the Champions League centres on who will win and the loss of revenue across the main associations. ‘Will Liverpool win the league?’ is surely the most asked question in sporting terms.
 
Outside of the footballing bubble sporting events have had cancellations pinging in like some sort of postponement vidiprinter. As most governing bodies’ event rosters were phoning in sick the Paris – Nice cycling road race was in full swing. What started as a distraction from world events it was quickly overtaken by them. With riders dropping out quicker than the sporting events were chalked off the global sports calendar the racing was cut short a day before the final stage in Nice.
 
The race isn’t normally the go to tour for this time of year however the cancellations of the Italian classics attracted the big names of Sagan, Quintana, Nibali and unsurprisingly 5 Pro Continental teams (Pro Continental is like the 2nd tier of cycling, similar to the Championship, the gulf in cash is enormous).
 
This highlights the economics of the cycling peloton. Teams had to race in order to keep the doors of their business open even though from stage 3 onwards the race took place largely behind closed doors, or at least those parts of it to which doors could be easily attached. The final stage was cancelled with the remainder of the calendar put, as you’d expect, in to doubt.
 
Road racing doesn’t have turnstiles or matchday programmes or scarf sellers outside the arena. The business model is largely one of two things - sponsorship driven with team naming rights and jersey/team car sponsoring to make up the lion’s share of income, the larger teams like INEOS (previously Team Sky) have a budget of about €35-40 million thanks to their wealthy backers; or nation state backing like Astana or UAE McLaren. Lower down the order teams are not so fortunate. Movistar, Trek-Segafredo and Sunweb get by on budgets of around half that of the hyper teams. No TV time or prize money stretches the spend as the cash burn is still quite big even in a lockdown scenario.
 
In the 1990s the cost of title sponsorship was about €2 million. Now it’s many times more than that across the UCI World Tour peloton. The smaller teams in the Continental Tour will have slightly more than €2 million in 2020. A prolonged period of no competition would be a major threat to much of the feeder series into the main tour. Teams could fold like pieces of paper. To highlight this the NetApp team were founded in 2010, they then became NetApp-Endura in 2013, then Bora Argon in 2015 and now go by the name of Bora-Hansgrohe.
 
While the sporting world remains a hostage to fortune, we can just cross our fingers that the authorities can provide the right sort of financial medicine across the sporting world. If they don’t many teams will have to get on their bike.

By David Butler

Many research papers have considered the impact of individual ‘stars’ on, for instance, ticket revenues, spectator turnout or television viewership.

Some of the earliest questions posed on this topic considered stars in the context of positive externalities - spillover effects in markets where welfare is positively affected by a third party (and no compensation is paid for this).

Much of this research can be traced to a paper by Hausmann and Leonard in 1997. They showed that Michael Jordan, when he played for the Chicago Bulls in the 1991-1992 season, increased ticket revenues at away games throughout the league and raised local advertising revenue. There has been more evidence since. Lawson, Sheehan and Stephenson's 2008 paper ‘Vend it like Beckham’ showed that Becks increased ticket sales as a share of stadium capacity by about 55 percentage points when he joined LA Galaxy in 2007. Beckham's star status was conferred by the fact that he was paid over the salary cap. As more recent work has shown, the effects of stars on MLS attendance tends to diminish over time (Jewell, 2017). 

Given the salary rules, it is easier to determine a 'star' criteria in the context of the MLS. Measuring fame in European football is trickier. Should a criteria base itself on talent, celebrity status/popularity or both? The two sources of fame are correlated but it is far from a perfect relationship. I can think of many relatively more famous Premier League stars who have not delivered on the pitch for a long time. 

For the last year, I have been working on a ‘star’ index for footballers. The idea is to capture star qualities related to talent (ability/recent performance) and characteristics related to a player’s level of global media fame (celebrity status). Importantly, the aim is to discern the relative star power of each player. I have compiled a dataset using many objective measures and have developed a formula to condense on-and-off field attributes into one 'star score'. The tool is exportable and scores are comparable across leagues. It is designed so that it can be applied to any league in the world.
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For 410 Premier League players this season, the top 10 ‘stars’ are below. The results are mostly intuitive, with the odd surprise. Mo Salah tops the list. Ngolo Kante coming in at no.2 is somewhat of a shock. My only big surprise was Mateo Kovacic coming in at 6th. Interestingly, there is no English player in the top 10. They enter the list at no.13 (Raheem Sterling) and no.15 (Harry Kane).

By Robbie Butler

In our latest post “Economic Impact of Sport in the EU” John explored the economic impact of sport in the EU. It can be seen from the bubbles in the graphic that Ireland is lower than in most countries, with sport accounting for 1.68% of total employment and 1.03% GDP. The impact that the cessation of sports fixtures as a result of Covid-19 will therefore be smaller on the Irish economy than it is in many other EU states.

It is interesting to consider this further.

There is very little professional sport in Ireland. The most recent CSO sports module in 2013 found that almost all sport in Ireland is non-professional. Rugby reported the highest number of professional/semi-professional athletes at 5.1%. Other professional sports people in Ireland are found in dance and gym related activities. Then there are the elite individual athletes that are either funded through Sport Ireland or very successful in their sport and are household names e.g. Shane Lowry and Katie Taylor spring to mind.

After rugby, the only other team sport with sizable employment is soccer. However, just 0.2% of players here are paid. The domestic league probably employees about 400-500 players on professional and semi-professional contracts. Clubs are now in serious financial trouble as fixtures have ground to a halt. The primary source of income is gate receipts and one can only wonder what is going to happen to players and other staff in the coming weeks. (More on this next week).

It is interesting to compare the current fate of the League of Ireland with another Irish sport – horse racing. Horse racing is not considered a “sport” but rather an industry in Ireland for data purposes and probably employees about 3,500-5,000 people directly. Indirect employment is much higher. If direct employees were included, the number of professional sports people working in Ireland would jump considerably.

Horse racing continues in Ireland – behind closed doors. Today Dundalk goes ahead. Tomorrow Thurles. Down Royal is on Sunday. Naas Monday. Clonmel Tuesday. Dundalk again next Wednesday. And Cork next Thursday.

Irish soccer cannot proceed like this. The reason racing can is because gate receipts are not terribly important. The broadcasting agreement with Racing TV trumps this. Irish soccer has no major broadcasting agreement. It suffers badly because of this.
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The domestic game in Ireland will require support if it is to survive. This might mean State support through Sport Ireland or elsewhere. No domestic league means no national team. No Euro 2021. No World Cup in 2022.

By John Considine

It is worth revisiting an EU study on the economic impact of sport.  In the EU, sport accounts for 2.12% of GDP and 2.72% of employment.  Individual countries differ and are presented in the graphic below.  The size of the bubbles represents each county's GDP, e.g. Germany has the largest GDP.

Sport is employment intensive.  This explains why the contribution to employment is greater than the contribution to GDP for the EU as a whole and for every county except Poland.

The economic impact of sport is largest in Austria where winter sports play a significant role.  Sport contributes 5.63% to Austria's employment and 4.12% to its GDP.  The economic impact of sport in Ireland is lower than in most countries (1.68% employment; 1.03% GDP).  The relatively small size of the green bubble illustrates the relatively small size of the Irish economy.

Study on the Economic Impact of Sport Through Sport Satellite Accounts was published in 2018 and is based on 2012 data.  It is also based on satellite accounts (a situation where the sports components are extracted from the classifications used in the regular System of National Accounts).  The study explains the contribution to these sectors to the overall impact of sport.  One might be initially surprised to find that the largest contribution comes from the education sector.  Sports services is the second largest contributor.  These relative contributions are reversed in the case of Ireland.

In Section 2.1, the authors provide an important guide to the interpretation of the multipliers derived using satellite accounts.  The authors use the example of sports tourism to illustrate their point.  This item will show up in both the sport satellite accounts and the tourism satellite account.  They point out that "[a]dding the effects of both satellite accounts would double count sports-related tourism".

By Robbie Butler

Regular readers of this blog will be familiar with posts I have written on sports broadcasting. There is a dedicated tab to the topic here. A common theme that runs through these is the ability of suppliers (broadcasters) to extract an economic profit from those seeking the product, often by virtue of the monopoly they hold in the market.

If anecdotal evidence is anything to go by, the past 5-7 days has seen an dramatic shift in power from supplier to consumer. Subscription sports channels throughout Europe, North America and elsewhere have seen their live content evaporate in a matter if days. The postponement of football, basketball, formula one, tennis, golf, and the list goes on, has surely resulted in a surge in cancellations of sports subscription channels. 

From experience, cancelling these is difficult in normal times. One can only imagine what it is like now. It begs the question, how will the providers respond?

Could a reduction in price be on the cards? Or cancellation of the March/April charges? 

A 2015 Ofcom Report which I wrote about here in 2016 identified "which specific sports and competitions within sports are important to subscribers". If these are no longer being provided to subscribers is it fair to charge full price, or even charge at all? 

It might be time for sports channels to rethink their present strategy.