By David Butler

​There is a sizable literature on the demand for live sport but less on secondary or indirect demand. Indirect demand (derived demand) is demand for a good or service that comes about not because the good or service is desired for its own sake, but because it is needed to produce another good or service that is in demand.

In the case of football, the core product of the live match has created spin-off markets in video games and fantasy football, memorabilia, equipment and merchandise and, as I consider here, on-and-off line media/broadcasting products.  

One recurring event that always attracts the eyeballs of enthusiasts is the cup draw. The Champions League draw starts this evening and will likely attract a lot of attention given the new format. Last night saw the draw for the third round of the Carabao cup. Who doesn’t love a good cup draw? Great suspense, right?  Who are my team - or my rivals - going to be matched with? ...Ah the possibilities.  For me, these can be more entertaining than some of the football itself.

These draws are now hosted on YouTube, so we get clear numbers on viewers. The chart below plots the changes in real-time streaming numbers during last night’s show. On average last nights draw had 44,668 online viewers. The chart below plots the streaming rates as the draw progressed. Once the the biggest fanbase of ‘seeded’ team were all pulled out of the hat, the numbers start to dwindle.

By Robbie Butler

We spent last week in Rotterdam at the 15th Annual European Sport Economics Association Conference. What a great event it has become, since first launching in 2009.

It was the 7th time I had a paper presented at the event which has grown to become a truely globally annual event.
Speaking to some of those at the first conference, they confessed that they were unsure if there was sufficent demand for an annual event. This extended to both papers to be presented and possible hosts.

How wrong they were. The event is now thriving and the number of hosts continues to rise. The map below shows the spread of host since the first conference in 2009.

Next year Austria will become the latest 'new' country to host the event, when Olympic city Innsbruck takes over the 2025 running of the ESEA. In 2026 the event will return to Zurich, making it the first city to host delegates twice, having first hosted the conference in 2015.

The future looks bright too with potential hosts emerging in countries such as Poland, Scotland and England in 2027 and beyond. Given the geograhic spread to date, it would be nice to see the conference head to places such as Portugal, Italy, Greece and other hosts in Eastern Europe in the years ahead. 

By Robbie Butler

The 15th annaul ESEA confernce concludes in Rotterdam today. We have spent the last 3 days in the Dutch city with delegates at the event. In total, almost 60 papers have been presented over the course of the last three days which included a visit to Excelesior Rotterdam football stadium and the annual gerernal meeting of the association.

The highlight of day 1 was a panel discussion on the implications of the recent sport cases at the European Court of Justice. The event will conclude later today with the keynote address from Professor Ignacio Palacios-Huerta (London School of Economics).

Next year's event is already in planning and will take place in Innsbruck (Austria) from the 27th to 29th August 2025. 

By Daragh O'Leary

The impending return of Premier League football has had a huge impact on my work life and it is safe to say that I am daydreaming more than usual. My day dreaming has not been in vein, however. In fact it has given me inspiration for a blog post. My day-to-day research concerns developing ways of measuring and analysing what is referred to in the economics/business literature as scaling. This is a form of growth which is incredibly uncommon among businesses.

In contrast to a conventional growth trajectory, any increase in size, scaling must involve a repeated and proportional series of increases to an output (revenue) or an input (employment) – see more on this here. Meaning that for firms to scale, they must grow outputs by a sizeable amount and then repeat that same growth again. This sees them exhibit what Ott and Eisenhardt (2020) refer to as a hockey stick pattern of growth. This is a similar shape to the exponential curve we all unfortunately became so familiar with during the COVID-19 pandemic.

Amid my workday daydreaming, I began to wonder whether scaling has anything to offer the sports economics literature and sure enough, I think it may. I think we could use the criteria for a scaling trajectory as a proxy for how successful a manager will be at a club.

​Take Erik Ten Hag for example. Most fans and pundits of the beautiful game would agree that his time at Manchester United has been a bit of a mixed bag and wouldn’t have been too surprised to see him replaced during the summer. Yes, there has been 2 domestic cups, but there’s also been an 8th place finish and some dismal signings. The points trajectory of Manchester United over this time period illustrates this.

In his first season (2022/2023) Ten Hag took United to a 3rd place finish with 75 points. This was a 17 point gain on their previous season (2021/2022) where United finished 6th. However, the following season United only managed an 8th place finish with 60 points – a 15 point loss on their previous campaign. If you were to work out the average growth rate of United’s points tally over these three seasons it comes in at roughly +2%. This illustrates why average growth rates can be misleading.

An average growth rate of +2% over three years may sound like progress, but in reality we know that Manchester United have looked to identify replacements for Ten Hag during this time and some pundits are even predicting he may be out of a job by January. All this unrest about United’s progress gets hidden behind an average growth rate because it can’t effectively incorporate a positive period of change and a negative period of change into one final value. If the criteria for progress during this period was scaling rather than just growth, then Ten Hag would already be out of work. United’s trajectory during his time would not be considered scaling. Yes, there was growth, but the growth didn’t follow the repeated and proportional trajectory of scaling.
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Managers which have exhibited this scaling trajectory in their first 5 years include Mikel Arteta at Arsenal (below in red) and Jurgen Klopp at Liverpool (below in orange). These managers didn’t just improve their teams in one season, they repeatedly improved their points tally each year. 

In the case of Jurgen Klopp’s Liverpool, this trajectory would see Klopp call time on his tenure at Anfield having won every honour available to him. At the time of writing, Arteta has only won his Arsenal side an FA cup and 2 Community Shields, but this may change if Arteta is to stay as long at Arsenal as Klopp did at Liverpool. If it is the case that exhibiting a scaling trajectory is a good proxy for a manager’s future success, then hopefully Arsenal fans will have something to cheer about come May next year.
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It should be noted that I have also included the trajectory for Pep Guardiola’s Manchester City above in sky blue to show that success can come from non-scaling trajectories as well. However, I think it’s worth mentioning that Pep’s Man City not fitting a scaling trajectory is more so to do with their quality relative to Arteta’s Arsenal and Klopp’s Liverpool rather than any inability of Guardiola to improve his team repeatedly. Pep simply inherited a team that had challenged or won the league in 2 out of their previous 3 seasons, so there was just less room for them to improve into. Arteta and Klopp on the other hand both took over fallen giants languishing in 8th place.

By Robbie Butler

I spent the last few days reading the recently published The Shortest History of Economics by Andrew Leigh.

The book is a very nice summary of some of the biggest events in human history such as the farming and industrial revolutions, global conflicts and the depression.The usual suspects appear in the text. Names such as Smith, Ricardo, Marshall, Keynes, Hayek, Robinson and Ostrom.

How encouraging it was to read that sports economics has now made the cut!

On page 151 a section is dedicated to the field of sports economics. Leigh makes reference to the Journal of Sports Economics and acknowledges research by some friends of those of us on this website, include Carl Singleton, James Reade and Liam Lenten.

The piece concludes with the sentences: “Sport is an arena in which people respond to the incentives created by the rules…incentives are everywhere”.

What a perfect summary of what we try and illuminate on this website. 

By John Considine

The 1,000th and 1,001st medal achieved by Great Britain in the history of the Olympics were achieved in track cycling yesterday (7th August 2024).  As of that date Great Britain also topped the medals table for Track Cycling in 2024.  How much of this success is down to government funding?  I don’t know but I can recount a story in Dan Martin’s autobiography Chased by Pandas.
 
While there are references to the targeting of Olympic medals throughout the book, Chapter 4 provides the best summary account of the situation.  The story starts 20 years ago when Martin was a member of a British junior team comprising a range of future stars of cycling.  One member was Mark Cavendish who this year broke the record for the most stage wins in the Tour de France.  Many went on to form the core of Team Sky – a team that was to transform road cycling.
 
Martin performed poorly in the 2004 World Championships.  After the race, his father took the chance to request a meeting with British Cycling.  When the meeting happened, one of those on the side of British Cycling was Dave Brailsford.  Brailsford was to later head up the successful Team Sky years and is currently involved in Manchester United.  Brailsford made it clear that British Cycling had nothing to offer Dan Martin.  Why?  Because he did not fit the profile.  As Martins says “The ultimate goal wasn’t to convert the best track riders to road racers, but to the best road racers onto the track, with the aim of achieving Olympic success.  British Cycling’s government funding depended on the medal it won.”  Ruthless and seemingly efficient.

By David Butler

There are rumours abound that Tottenham’s Richarlison and Arsenal’s Jesus could be the latest stars to move to Saudi Arabia. The contracts on offer for these players in Saudi Arabia will likely represent significant financial improvements to their current deals.

Below is a table of per week (gross) salaries for well known players currently contracted in the Saudi league and this is compared to their salary per week for their previous club (data from Capology). This past contract was very often with a major European club in a top tier league. Six figure salary increases commonly accompany a move to the Saudi league. For most, there is a significant percentage increase. 

By Robbie Butler

This worked again. Despite a poor year - and just 5 winners - a profit was reported, largely thanks to a 50/1 winner on Day 1.

Using our rules below, and and an even stake, a return of 16.5% is reported after 7 days of racing. This means the champion trainer has beaten the market in 6 of the last 7 years at the Galway Festival. 

​Roll on 2025!