By Robbie Butler

Tokyo must be cursing their luck. What is it about the Japanese capital and cancellation of the Summer Olympics Games? The 2020 gathering were set to be the 29th installment of the modern Games, have first started back in Athens in 1896.

Organisers of the 2020 Games will be very much aware that the last time the event was cancelled, with everything in place, was back in 1940 with Tokyo set to host their first Games. London was subsequently cancelled in 1944, having been awarded the Games, but little planning was ever put into the event.

The cancellation of 1940 put to an end 5 Summer Games in a row (1920-1936). This was preceded by five Games in a row from Athens in 1896 to Stockholm in 1912. World War 1 broke the link. 

Based on these earlier experiences, where the world managed to string just 5 Games in a row before major disruption hit, the recent run of 19 Games is quite remarkable. It demonstrates the stability of the world order since 1945 and the general success in avoiding major upheaval on a global scale. Covid-19 has put an end of this run. 

We have taken this and many other things for granted. I recently read a tweet that said how unlucky someone born in the year 1990 has been. They have lived through a global financial crisis and now global pandemic by 30. But what about 1900? These people lived through a pandemic, world war and depression by the time they were 30. A second war was on the way.  If you were Russian this also included a revolution. 19 Games in a row is proof of the success of many global institutions, both economic and political.

Had we followed a similar pattern to the past, following the cancellation of Tokyo in 1940, the Games would have restarted in 1948 in London for a chain of 5. This would have meant London, Helsinki (1952), Melbourne (1956), Rome (1960) and Tokyo (1964). ​At least the Japanese city would have missed out of losing the Games again...just.

By John Considine

It can be difficult to get widespread agreement on an exact definition of sport.  Philosophers such as Bernard Suits are worth reading on the issue.  Comedians can capture much of it in a punchline.  However, for a working definition of sport, the EU deserves some credit.  As an economist, I was drawn to the high-level versus grassroots distinction made by an expert group charged with examining the sustainable finance of sport.  The distinction is captured in the table below.

The distinction between high-level sport and grassroots is an important one.  Expenditure on Media Rights and Sponsorship & Donations are mainly on high-level sport.  Volunteering is mainly on grassroots.  Within the public sector, expenditure also differs.  National governments spend slightly more on high-level sport but local authorities allocate 90% of their expenditure to grassroots.

This distinction between high-level and grassroots is also reflected in the Treaty for the Functioning of the EU.  From an economics perspective, the articles on competition dominate the Treaty.  The more important articles for Antitrust or Competition Law start at Article 101.  It deals with anti-competitive agreements.  In the EU, high-level sport is subject to Competition Law (a situation that is worth comparing with the US).  Government interaction with high-level sport is also subject to Competition Law.  Article 107 deals with State Aid.  It constrains government funding (by whatever means) where it gives unfair advantage.  Virtually all economists are happy on this terrain where the market delivers and the government is constrained.

It gets a bit trickier for economists when it comes to government funding of grassroots sport.  Case law, and clarifications to Article 107, suggest that government funding should be directed to inclusive social projects.  This is in line with the Amsterdam Declaration on Sport - a "declaration of the European Council on the specific characteristics of sport and its social function in Europe".  There is more than a suggestion that the market under delivers.  It is the world of market failures and government solutions.  It is my contention that many economists are less comfortable on this terrain.  They have the theoretical concepts, e.g. public goods, merit goods, and goods with positive externalities.  But, there is a lack of conviction - that some say is linked to a lack of empirical evidence.  (I will explore this argument in a forthcoming edited volume by Robbie Butler.)

The EU distinction between high-level sport and grassroots sport is not perfect but it does offer a useful framework to think about the role of government funding in sport.

By David Butler

The general consensus is that the most vulnerable are those who receive the greatest protection. How does UEFA go about doing this for European leagues?

The table below is recreated from a recent UEFA benchmarking report and shows the breakdown of total revenue by income source (%) for each UEFA member. The categories making up total earnings are (i) UEFA revenue, (ii) Commercial/Sponsorship, (iii) Gate Receipts, (iv) Domestic TV  and (v) Other. Transfer revenues are excluded but shown in the original report.The figures mostly relate to the financial year ending in 2018 and are compiled by UEFA based on data submissions by clubs/national associations through a UEFA online financial reporting tool.

There are vast differences across UEFA members in terms of a reliance on different income streams. This may offer some insight on relative exposure to the crisis and help UEFA identify the most vulnerable leagues. 

I've ordered the table by gate receipts - the revenue source that has vanished. The second order is commercial/sponsorship, another income stream that will be impacted by fixture postponements.  Worryingly, but not surprisingly, the League of Ireland is 4th on list - we rely on gate receipts relatively more as an income source given the absence of any lucrative TV deal. 

Many of the smaller associations (at the end of the table) are, relatively speaking, not at as much risk, assuming there are no drastic cuts to UEFA or 'other' funding sources. 

Some caveats. First, these figures should be taken as estimates (some UEFA figures are actually over and under 100%!). Second, obviously there are significant variations in total revenues, but I'm assuming this is reflected in costs bases. Third, this take is not giving much thought to the plight of clubs outside the top divisions. Fourth, I'm guessing leagues relying on TV money may be facing a haircut or entering some negotiations in terms of their deal (?) - this might come down to the contracts and payments already received. Fifth, gate receipt revenue may include season ticket sales, but I'm sure clubs will be offering refunds to fans here. 

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.
​
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).