By Robbie Butler

On the 24th of September 2019 in Ljubljana, Slovenia, the Ramón Sánchez Pizjuán Stadium in Seville was as selected by the UEFA Executive Committee as the host venue for the 2020 Europa League Final. This was a world before Covid-19. The choice of Seville seemed appropriate given that the club named after the southern Spanish city has enjoyed remarkable success in the competition since 2006 - winning six finals. As expected, in June 2020 due to the Covid-19 pandemic, UEFA announced that Seville would instead host the 2022 final as the 2020 and 2021 finals were to be relocated. 

Fast forward to the 25th of April 2022. This link from Seville FC speaks about the preparations underway for the 2022 Final. Below the video in the link it says: 

"In addressing the event, the mayor, Antonio Muñoz, stated that between 45 to 50 thousand fans are expected to come to the city for the final. Although he regrets that there will be no representatives from the city, nor Spain, the mayor said that "two of the four semifinalists are German and the other two are British, i.e. they come from the two main tourist source markets for Seville." Hence, it is estimated that the city's economy will be boosted by €60 million." 

Those familiar with lobby groups seeking to attract major sporting events to potential host cities always cite increased tourist numbers - and the economic benefits that follow - as a reason for bidding for said events. As the Mayor of Seville suggests, this was to be worth €60 million to the local economy. 

On the 12th of May 2022 UEFA made a statement warning fans not to travel unless they had a ticket. With a capacity of less than 43,000 seats it seems odd that the Mayor was expecting 50,000 fans to his city. In fact, Rangers and Eintracht Frankfurt received just 20,000 tickets each, with the remaining tickets distributed to sponsors, corporate affiliates, UEFA members, etc. 

It is believed that almost 100,000 Rangers fans descended on Seville. As a colleague of mine pointed out, it seemed that tourist arrivals are good so long as it is not too many. Maybe the effect is non-linear. 20,000 is good for the city but 100,000+ is not. We don't ever read about this in the ex ante economic impact reports. 

With Dublin due to host the final in 2024 in the Aviva Stadium (capacity 51,700), I wonder will Irish authorities 'cap' the number of expected tourists in any ex ante estimates. My guess is no. Imagine if the game was a repeat of this year. 100,000 Rangers fans in Dublin would be interesting to say the least. 

By David Butler

As a case study on my strategy module, I look at the ideas in Moneyball and consider ‘David vs. Goliath’ strategies. One factor I stress with students is that the outcomes as described in the book are very much the exception to the rule – this is what makes the story interesting. Also, I remind students that the Oakland A's didn't lift any trophies. 
 
As the majority of football in Europe has finished for the 21/22 season, once again, we can see the regular relationship between salary spends and point accrued across the major leagues. The charts below plot the relationship between points totals and the log of annual net salary spend divided by squad size. This gives the an estimate of per-player spend (all in €).  As can be seen in the charts, player salaries explain a lot of the variation in performance. 
 
There are no vivid examples of successful Moneyball strategies, but some clubs did succeed - relatively speaking - with low budgets. Others are venturing toward the ‘moneyball-zone’ (bottom right-hand corner of the plots). Brentford bucked the trend in the EPL with a budget ~€11.75m (while Manchester United did the opposite). With an annual budget of ~€11m Verona finished 9th in Serie A. Freiburg finished 6th in the Bundesliga with one of the smallest budgets in the league - just under €6m. In France, Lens finished 7th with a budget of ~€5.2m.

The managers of these clubs did not win their leagues, but I often wonder whether this type of criteria should inform decisions on managerial awards. 

By Jane O'Sullivan

Every summer since I can remember I’ve spent hours on the side of sun-drenched French roads, waiting for the 2 minutes of excitement as hundreds of cyclists zoom past the cheering crowds. The planning for this big day out starts months in advance, examining in detail the road book with provisional timings of the earliest and latest possible arrival of the cyclists. Hiking up Alpine roads in July heat is a tough feat so getting to the nearest parking before the roads close is essential, while planning how long we need to hike to our preferred spot also depends on the timing outlined by the race organisers. The race director keeps the whole show on the road to ensure these provisional timings, outlined months in advance, are as accurate as possible on each stage, allowing the local police to close the roads in ample time and the spectators to get in place.

The role of the director in keeping the stage running on time depends greatly on coopetition. This concept is examined in detail by Brandenburger and Nalebuff in their 2021 Harvard Business Review piece.  They published a book with the same name in 1996.  Coopetition is essentially some cooperation between competitors.  In cycling term, cyclists from competing teams cooperating for a successful breakaway to have the chance of winning a stage. The early breakaway not only keeps the speed of the stage within the race director's limits, but simultaneously increases the excitement of the race for the spectators early in the stage. Additionally, the cyclists themselves benefit from participation in the breakaway because of television coverage for their team sponsors, while having the potential to succeed in intermediate categories. 

​This is why stage 6 of this year’s Giro d’Italia was so unusual as an early breakaway of riders from invited teams did not develop, despite the presence of a significant climb early in the stage, creating the potential for a gap in the peloton. It is questionable why the race director did not further influence the teams to put riders in a breakaway in order to increase both the excitement and speed of the stage, for a number of stakeholders; team sponsors, spectators, television coverage and local police. The race director is a key figure in the success of wildcard teams because of their dependence on an invitation to the race, so an instruction to put riders in a breakaway would surely have been obeyed.  With 19 UCI World Teams automatically invited to each Grand Tour, 1 team qualifying by ranking and 3 wildcard spots available to be awarded at the race organisers discretion, the competition is fierce.

The graph below highlights the number of riders in the early breakaway throughout the last year’s Giro, with a relatively even spread between successful and unsuccessful breaks. However, on five particular stages the breakaway was composed only of riders from these invited teams.  From the small size of the break and the stage winner of each of these stages it’s clear that these were days earmarked by the sprinters and their teams, who have the sole purpose of keeping the breakaway in check so the sprinters can battle it out in the final metres. These stages can be dull until the final kilometres, with low viewership throughout the stage, which is why McQuaid, as referenced in Larson and Maxcy (2014) and blog post of May 13th, pushed for more breakaways early in the day, even on flat sprint stages, as would have been expected in stage 6 of this year’s Giro. These are the days when the invited team can show their value to the race, increasing the drama throughout the stage, securing a place for the following year, and ensuring greater television time for sponsors, basically keeping everyone happy, despite the elusive stage victory for the riders who battle at the front all day!

In recent years there has been some exceptional quantitative analysis of breakaways in cycling.  Thijs Brouwer and Jan Potter examine 783 early breakaways from races between 2011 and 2017 in their Journal of Economic Psychology paper.  Nicolas Scelles, and a number of colleagues, have examined breakaways from four years of the Tour De France starting in 2013 in their Team Management Performance: An International Journal.  These works should be read in conjunction with more qualitative explanations like that provided by Peter Cossins in his book Full Gas.

The lack of breakaway in stage 6 of the 2022 Giro came much to the disappointment and confusion of Eurosport commentators Sean Kelly and Carlton Kirby. Eurosport’s chief cycling reporter, Kirby, highlighted that the reasons behind the lack of a breakaway can only be explained by riders and teams themselves in interviews following the stage.  In addition to some quantitative analysis, I’m taking a interview-based qualitative approach to breakaways in my Master dissertation (MSc Business Economics at UCC).  To date I have interviewed experts from across the world of cycling including: Eurosport reporters Kirby and Felix Lowe; former British cyclist and current Eurosport journalist Dan Lloyd; Global Cycling Network reporters Joe Timms and Cillian Kelly; former editor of ProCycling magazine and author of numerous award-winning books on cycling Peter Cossins; as well as Irish cycling hero, Grand Tour winner and current Eurosport commentator Sean Kelly.  These experts, amongst the best in the sport, have been invaluable contributors to my master’s thesis on coopetition in breakaways, allowing for a more detailed understanding of the complex dynamics within the peloton, building on previous quantitative studies in the area.  Their willingness to help is a great reflection on the cycling community.

Looking forward to July in France.

(Jane O'Sullivan is currently completing her MSc Business Economics.)

By David Butler

We're in the midst of the English football league play-offs. These are some of the most exciting football matches that one can watch – an entire season is on the line. My fondness for these matches goes back to childhood; the unfamiliar scheduling and the high-stakes drama was appealing. 

The play-offs were first trialled in 1987, as part of a wider re-organisation of the English league, and have taken place at the conclusion of every season since. This post considers outcome data for 32 seasons. This includes data for the old First Division/Championship play-off from the 1988/89 season* and 33 seasons for the lower divisions (that have changed name many times since due to re-structuring). 

Unsurprisingly, the playoff winners are most likely to come from the 1st slot after the automatically promoted teams via the league** (charts below). These higher ranked teams are also most likely to be finalists.  For the Championship, on average this team finishes 4 points ahead of the 4th and 5th placed team and 8 points ahead of the 6th placed finisher. 

The idea that finishing just outside the automatic promotion spot brings a certain psychological angst, that spills over into the play-offs, isn't borne out in the data.  The teams just outside automatic promotion win the play-offs most often and are finalists most often too. 

By John Considine

"Get out the chequebook and pay them."  These were the instructions that Sean Kelly gave to Pat McQuaid when the latter wanted the former to encourage cyclists to put in greater competitive effort.  It was during a cycling race in Ireland decades ago.  This was how Kelly helped explain events yesterday during the live commentary of Stage 6 of the Giro d'Italia 2022.  Kelly's example came from the last century when he loomed large in world cycling - he topped the world cycling rankings for years after they were first introduced in the 1980s.  McQuaid's cycling days were behind him at that time and he was talking to Kelly as the administrative director of the race.

McQuaid dominated the administrative side of world cycling in the same way that Kelly dominated the road.  McQuaid features in one of the early papers on the economics of cycling. Daniel Larson and Joel Maxcy quoted McQuaid in their 2014 Journal of Sports Management paper (see below).  The quotation shows how TV producers can set the agenda for the sport.

Yesterday's stage of the Giro was fascinating viewing for economists.  Channeling their inner-McQuaid, the commentators bemoaned the lack of a breakaway.  The discussion of economic incentives associated with professional cycling was informative, entertaining, and fascinating.  It was in this context that Kelly explained his statement to McQuaid from decades earlier.

Yesterday, as the flag was dropped to start the stage, one rider pretended to attack but slowed within seconds and smiled at the cameras.  A few kilometres later, two different riders did something similar.  This is where Kelly comes into his own.  As the "senior" analyst in the Eurosport stable, he has seen and done so much.  With 187km to go in the stage, the cameras showed one of the older riders.  This was Kelly's opening to explain how the sport had changed over recent decades.  He suggested that the older rider would remember the days when nothing would happen for the opening 100km of a stage.  A few kilometres later, Kelly suggested that Mauro Vegni (Director of the Giro) would be talking to the smaller teams encouraging them to attack and to form a breakaway.  Eurosport's lead commentator, Carlton Kirby, chipped in with an explanation of the importance of breakaways for TV broadcasters and their willingness to pay for content.  McQuaid could not have put it better.

Eventually, a rider from a smaller, invited team set off on his own - a team invited to the Giro by Vegni and his colleagues!  Kelly bemoaned the decision of the smaller team to sacrifice one of its better riders and possibly the chance for that rider to win a stage later in the race.  A sporting chance reduced by economic realities.

That is not to say that there are no economic incentives for attacking and getting into a breakaway.  The previous day on Stage 5, Kirby and Kelly explained the monetary rewards.  Kirby explained how the two riders who formed the breakaway in Stage 1 earned €2,000 for their team.  Kelly listed the prize money for some of the intermediates scattered within the race, e.g. the winner gets €500 and second place €400 and so on.  This then sparked a discussion of the balance between salaries and prize money.  You can listen to all this while viewing the Italian countryside.  Sport and economics in the glorious Giro.

By Robbie Butler

Yesterday UEFA made public their plans for the 2024/25 UEFA Champions League. As expected the competition design has been altered. This is a consequence of a number of factors including club lobbying, a desire for further expansion of the competition, and the threat and upheaval brought in April 2021 by the announcement of the ill-fated and short-lived European Super League. 

Born in 1992, the UEFA Champions League replaced the old European Cup and consisted of just 8 teams (post-qualifying) in two groups. Numerous changes and expansions occurred thereafter, including a double group phase, but since 2003/04 the competition has remained effectively unaltered. This is testament to the success of the product and the attention that the current format generated. Alas, nothing remains the same forever, and the powers that be have decided that change (as most people now do) is for the better.

The 8 groups that currently exist will be replaced by a Swiss-style tournament model.

I must admit, I had no idea what this was (Google was required) and am still a little unclear as to what this will look like. I had the same problems with UEFA's Nations League when the competition design was announced but got to grips with it once the actual games started. A theoretical example of the Swiss system can be found here.

What was interesting to note from the link is that the Swiss system is currently used in competitions such as eSports, Chess, Scrabble and Pokémon!

One wonders how this will map into elite European club football. Roll on 2024/25.

By John Considine

From the start of yesterday's opening stage of the Giro 2022, two riders from an invited (Tier-2) team went on the attack.  They established an early break.  The break by the (Drone Hopper - Androni Giocattoli) teammates will have justified the invitation extended by the organisers.  The team sponsors will have been happy with the television coverage devoted to the breakaway.  The two riders will have picked up some intermediate prizes.  Expect some of the other invited teams to be in the early breaks in the coming week.

The peloton allowed the pair away and then closed ranks.  The break was allowed to open a 10 minute gap.  However, that was never going to be enough.  Like a cat playing with a mouse before delivering the final execution, the gap was narrowed but the two were allowed to stay slightly ahead until the real racing started near the end of the stage.

The relatively small kick-up at the end of the flat stage sorted the riders.  The distribution of time gaps to the winner are produced below.  Seven riders were given the same time as the winner.  These seven are listed in the table below, along with their pre-stage betting odds (from Paddy Power).

A crash in the final sprint cost Caleb Ewan (3rd favourite in pre-race betting) one of the top places.

It can be expected that today's individual time trial will produce a more "normal" distribution of time gaps.  Riders will not be allowed draft in each other's slipstream (a process that can result in riders finishing in groups).  Today's time trial is about individual optimisation.  The type of stuff you find in the early chapters of an introductory economic textbook.

By John Considine

One of HBO's current drama offerings is Winning Time: The Rise of the Lakers Dynasty.  A recurring theme is strategy.  At one stage, the team's owner explains how the board game Monopoly can be used to explain his life.  A childhood illness gave his mother the opportunity to teach him card games and board games.  He believes that he is unbeatable at the game.  However, he is beaten by the team's coach while the latter is recovering in a hospital bed with a brain injury ("beaten by a man who can't tie his shoe laces").  He recounts this story to the GM and previous coach as they are about to face the Boston Celtics.  The previous coach ironically calls it "only a game" and he does not see the bigger picture.  He thinks Monopoly is just a board game.  That is not how some of the best minds see card games and board games.

Almost thirty years ago, the Department of Economics in University College Cork, Ireland hired a guy called Robert Leonard.  Robert had just completed his PhD in the USA.  The topic was game theory.  Within two years, Robert would have an article in the Journal of Economic Literature titled "From Parlor Games to Social Science: Von Neumann, Morgenstern, and the Creation of Game Theory 1928-44".  Game theory was in vogue as John Nash had recently won the Nobel Prize for his work in the area.

Von Neumann was surely one of the greatest minds of the twentieth century.  In 1928 he published a paper called "On the theory of parlor games".  He joked that he proved that some games were not worth playing because there was no strategy involved.  By 1944 he had teamed up with Oskar Morgenstern to write the hugely influential, but not widely read, The Theory of Games and Economic Behavior.  It was John McDonald that brought the poker-loving Von Neumann to a wider audience.  McDonald wrote two articles on game theory and poker for Fortune Magazine .  He then turned these into a book called Strategy in Poker, Business and War.

Von Neumann found poker more intellectually interesting than chess.  He believed that chess, although hugely computationally complex, was capable of solution.  Poker, he argued, was different.  Bluffing made it different.

Today, the Giro d'Italia 2022 starts.  Cycling has been called "chess on wheels".  However, it could also be called "poker on wheels".  The distinction between the analogies is clarified in Peter Cossins brilliant book, Full Gas! How the race was won: Tactics from inside the peloton.  The chess analogy seems more appropriate for the positioning of the riders in sprint finishes.  The poker analogy seems more appropriate for smaller group breakaways where bluffing about one's strength can be crucial.  Today's stage is a flat one.  It should be a chess-like finish.  The poker played in the breakaway today will be less serious as it is unlikely that the breakaway will capture the stage win.

In addition to the strategy employed by the riders as sports competitors there is also business strategy involved.  Don't be surprised if it is riders from the invited teams that contribute heavily to the early break.  It will all play out over the next three weeks.  Like the game of Monopoly, the Grand Tours are tests of endurance where strategy plays a crucial role.  

By Robbie Butler

A few of weeks ago I wrote about UEFA's decision to remove away goals in the knockout stages of European club competition. I was skeptical about this move and thought it could result in more penalty shootouts in the latter stages of competitions. 

The Champions League to date has proved this to be wrong. No two-legged knockout tie was decided from the spot during the 2021/22 competition. In fact, the change in rules appears to be working very well and the strategic behavior that one witnessed in previous seasons appears to be reduced. 

Take Real Madrid versus Man City as an example.

The Spanish team trailed 4-3 going into last night's game. In previous seasons, three away goals would have defined how this tie would be played. Under the new rules, the game is simplified, and Real knew they required a one goal margin to force extra time and penalties.

Had this been 2020/21 Man City would have exited the competition after 90 mins (5-5 on aggregate). The new system gave City extra time. Maybe in the past Real, fearful of conceding away goals, would have sought to play out the final 30 minutes in a draw. With this threat removed, attacking play by the home team is encouraged and the Spanish club won the game 3-1, and the tie 6-5, after extra time. 

The removal of this fundamental European rule may be much better than I first thought. 

By John Considine

A reference to a 2008 paper by myself and three colleagues will pop up regularly in the popular media.  Two weeks ago it surfaced again.  This time it featured in the Sunday Times.  The piece was written by Colin Coyle (here).  The 2008 paper examined the distribution of National Lottery funded sports capital grant allocations.  There are a fair few previous posts on this issue.  The image to the right is of the original article.

Colin Coyle's piece in the Sunday Times explained how there is going to be a public consultation on the allocation of National Lottery funds in Ireland.  A recent paper in Public Choice examined the situation in Israel.  The title of the paper by Momi Dahan and Itamar Yakir captures much of the content - "Revealed political favoritism: evidence from the allocation of state lottery grants in Israel".  The paper examines a shift from a discretionary allocation system to a more rule-based allocation system.  The authors found that favouritism towards the Jewish municipalities decreased with the move to the rules-based system.  With a bit of luck, the folks heading up the public consultation (Indecon) will read Dahan and Yakir paper. 

It would be a mistake to presume that any rule will solve all the problems.  It will depend on the quality of the rule.  Six years ago, Justin Doran and myself examined the problems with an informal rule (here, also published in Public Choice).  Dahan and Yakir's paper gives a more promising message.