By Robbie Butler

Pick up any standard microeconomics textbook for undergraduates and you will meet a chapter explaining the theory of the firm. Readers will be introduced to issues like profit maximisation, marginal revenue, average costs and marginal costs, amongst other things.

Embedded in the theory is an explanation of "shutting down" and "existing" the market. The former is regarded as temporary closure, while the latter is permanent. Because of this distinction, the short-run decision (shutdown) and long-run decision (to exist the market) differ for the firm. If a firm shuts down, it loses all revenue from the sale of its product, but must still cover all fixed costs. Therefore, the firm will shut down if the revenue it would get from producing is less than its variable costs of production. The firm will only exit the market if total revenue from the sale of its product is less than the total cost of production (all costs).

Sky Sports have a lovely insight to this today thanks to an interview with Tranmere chairman Mark Palios. Football clubs have essentially "shut down" in recent months - with no fans at games. The variable cost of fans (security, light, heat, insurance, health and safety, policing, etc.) have largely disappeared. However, the reopening of stadia will bring these costs back. The fixed costs never left e.g. player salaries.

Palios explains the problem this is for clubs. 
"If you just come down the tiers to 2,000 fans [tier 2], our season tickets are 3,000. So actually cash-wise we are probably worse off because if we have fans in the ground, I know the costs would be about £10,000 to open up. We'd have all the gates open for social distancing, and all the turnstiles on. As a consequence of that, we wouldn't get anymore cash and we'd have to spend £10,000 a match. If it stayed like that, in the context of about a further 18 matches, it's nearly £200,000 of costs. And if you were allowed in 4,000, it's only for the extra 1,000 of general attendance [on top of 3,000 season ticket holders], but we'd still have the costs. It would be pretty minimal, with regards any excess for us."

A lovely illustration of fixed costs, variable costs and total revenue, and the problems facing clubs that rely on match-day income as their primary source of revenue.

By David Butler

The 2020 Nations League group stages concluded this week. The tournament was founded in 2018 and was devised to eliminate the non-competitive friendlies that often faced the ire of European football clubs. It also offered a more balanced competitive format for an international European football competition.

How has balance changed over the two Nations Leagues that have taken place?  One way of considering this is to look at bookmaker odds for the competition. Although the difference in betting odds between a home and away win does not control for draw probabilities, this is a quick and easy way to give some insight into balance.

Controlling for the bookies over-round, the average difference in probabilities for a current Nations League match was 0.31. The median was 0.29.  For the 2018 Nations League there was a higher mean and median (0.37 and 0.35, respectively). To put this in perspective, the mean difference in odds for Euro 2020 match was 0.55 (with a median of 0.57). For those not familiar with the UEFA international qualification groups for the World Cup and Euros, these are notoriously unbalanced. 

On first glance, the competition may have become more balanced. Although the comparison is not perfect - the most recent competition was behind closed doors, a factor which would likely impact odds. 

By Robbie Butler

In August 2018 I wrote a short piece here about the newly formed Nations League. I have to add, more than two years on, I still struggle with the competition structure and what it might mean for future qualification.

In the original piece, I wrote the following: 

"The good news for the minnows is that they not only get to play one another, and therefore have a golden opportunity to register a rare international win, the winner of this group also qualifies for the 2020 European Championships. This poses an obvious question? Is a country better-off targeting a place in Group D rather than Group C? This logic can apply to Group C/B and Group B/A."

As far as I can tell, UEFA qualifying for World Cup 2022 is based on the current standings in the Nations League. Play-off spots will be available to the two highest finishing teams that fail to finish 1st or 2nd in their qualifying groups. This encourages team to win.

What I don't now get is qualification for Euro 2024.

If the same rules hold as for Euro 2020, are Northern Ireland now better off than the Republic of Ireland? The North were relegated to Group C last night, while the Republic survived in Group B with a 0-0 draw at home to Bulgaria. 

It should be noted, neither team will play at Euro 2020, having been in Path B play-offs. Yet Scotland will be there having been seeded in Path C.

My question remains. Is a country better-off targeting a place in Group C rather than Group B?  Surely, losing can't be better than winning. Can it?

By Robbie Butler

England will play the Republic of Ireland later today in an international football match. This a rather rare occurrence and is deserving of a blog post. While England play Ireland regularly (sometimes once a year) in many sports, for example in rugby or cricket, football matches are a far more infrequent.

Since the World Cup in Italy during the summer of 1990 - where the countries played out a 1-1 draw - the nations have met just 5 times. In fact, the countries have played against one another just 16 times (ever) according to the excellent 11v11.com website. 

To put this into context, England have played international football matches against Scotland 114 times, Wales 103 times and Northern Ireland 37 times. There are complex historical, political and social reasons for this - the abandoned game between the two countries in Dublin in 1995 certainly did not help - but the number of games is still very low. 

Following the 1995 abandonment, the countries did not meet again until May 2013, in an international friendly. There has not been a competitive game between the two since March 1991. This is somewhat surprising as the countries were rarely seeded in the same pot in UEFA qualifying competitions between 1992 and 2020. 

What is also worth pointing out is the perfect balance between the nations in recent decades, despite England being almost always ranked higher in the FIFA World Rankings. Excluding the game in 1995, where the Republic of Ireland led 1-0 before it was stopped, the last 5 meetings (from the World Cup in Italy) to the most recent game in June 2015, have all ended in draws. The sequence has been 1-1, 1-1, 1-1, 1-1 and 0-0. Perfect balance.

The last time there was a winner between the two countries was coincidently the first international football match I remember -  Republic of Ireland 1-0 England in Stuttgart at Euro '88.

England have not beaten the Republic of Ireland in more than 35 years - the 26th of March 1985 being the last time. However, with odds of 4/11 for an England win this evening, the bookmakers think this run is about to come to an end tonight. As an Irish man, I can only hope they get this one wrong.

​By Robbie Butler

On Saturday afternoon, as I was watching Crystal Palace play Leeds United, I was struck by a comment from the match commentator that this was the home teams' 8th consecutive season in the Premier League.

Those that are familiar with English football will know that Crystal Palace are somewhat of a yoyo club, and have 5 different spells in the Premier League. That means 4 relegations and 4 promotions (they were in the league in 1992/3 for the first season). Their 8-year stint is by far their longest spell in England's top flight. 

Crystal Palace's current stay in the top flight was thanks to a promotion at the end of the 2012/13 season through the play-offs. The play-offs are for teams that finish the season in places 3/4/5/6 and involve semi-finals (two legs both home and away) and a final at Wembley.

The Championship Play-off Final - which Crystal Palace have incidentally won more than another other club (4 times) - is often referred to as the 'richest game in football' or the 'richest game in the world'. This is because of the enormous revenue streams that can be generated from playing the Premier League through broadcasting, sponsorship, matchday operations and merchandising. 

On the 27th of May 2013, former England and Sunderland striker Kevin Phillips, scored a penalty in added time of first half extra time to beat Watford in the 2013 Playoff Final. Crystal Palace have reaped the rewards since. Each season the clubs stays in the Premier League, the more value this goal become. Phillips, now 47, is long since retired and played his last game in 2014 for Leicester City.

However, there is a more valuable goal. A year before at Wembley West Ham United beat Blackpool in the 2012 Playoff Final.  Portuguese player Ricardo Vaz Tê - currently playing with Portimonense following spells in Turckey and the Chinese Super League scored the winning goal, 3 minutes from time, as West Ham won by two goals to one. 

West Ham have remained in the Premier League ever since. Every club to win the Playoff prior to 2012 have been relegated at least once from the Premier League. Vaz Tê's goal unlocked nine seasons of the Premier League and counting. Just like Kevin Phillips' goal a year later, the longer West Ham and Crystal Palace survive in the English Premier League, the more valuable these individual goals become. 

With the 2020/21 season well underway it seems very likely both clubs will see an 9th and 10th season in the Premier League. By then Phillips will be 48 and Vaz Tê 35. The impact both had on their respective clubs lives on. 

By David Butler

The Premier League recently announced that they, along with their partners Sky Sports and BT, will be "changing direction" and discontinuing their pay-per-view match offering. This is a second attempt of having multiple paywalls; Sky’s Prem Plus lasted from 2001-2007 and was based on a similar model. 

The recent extension was introduced a few months back so that matches typically played during at the 3pm Saturday time slot, and not shown live on TV, could be viewed by fans. Of course, this came at a price – every pay-per-view match cost £14.95 in the UK and €16.95 in Ireland. It wasn’t the case that Sky were charging extra per se, as these matches were in addition to the 140 live matches on the premium channel.

The logic proposed by the EPL seems to be that pay-per-view charges would allow fans of every club to watch their team during the pandemic and raise revenue for clubs in the absence of matchday fan income.

14 matches have been sold via PPV in the UK but now the PPV model is being abandoned. Some casual data tweeted by Joel Minsky suggests that several matches sold poorly. These figures were based on BARB viewing data -which is not the same as buyer data. Newcastle vs. Man Utd had 40 viewers, while Leicester vs. Aston Villa only had 20k. Liverpool vs. Sheffield United sold relatively well, coming in at 110k viewers. Arsenal vs. Leicester registered 140k. Given the size of the Newcastle and Manchester United fan bases, I was surprised by the buy rate – maybe this reflects fans disdain for PPV.

Back-of-the-envelope calculations say that these raised ~4.63m (assuming all viewers paid – which may not be true). This figure might seem reasonable but averaging it over 4 matches, this is lower than what Sky pay per match. However, I don’t know if (or what) Sky are paying for these extra matches. On top of this, there is likely lost advertising revenue from choosing the PPV route and, as can be seen from fans donating the PPV fee to charity, plenty of bad publicity.  

Given that Sky are happy to end the PPV model one would have to infer that it’s not making economic sense. That said, they may have been content with this failing from the start – for a company with savvy marketers, it seems strange that a Monday evening fixture between West Brom and Burnley would be packaged as “box office”....

If I recall correctly, there was plenty of disdain about the PremPlus model in the early 2000’s too. Back then however, there was no method to allow fans successfully coordinate on mass to donate the fee to charity like they have done this time.  

One final thought. Are Sky bailing out at the wrong time? Some of the earliest matches on box office were broadcast when fans could have partook in out-of-home viewing. England and Ireland are now back in lockdown, so the option of the pub is now out.

By Robbie Butler

Just over a year and a half ago there was an interesting post on this site and the number of finishers in the Aintree Grand National through time. You'll find the piece here. This is an extension of that work in some ways and is motivated by the running of the Melbourne Cup earlier this week.

For those unfamiliar with horse racing, the Aintree Grand National run in Liverpool is very different to the Melbourne Cup in Australia. The Grand National is run over more than 4 miles and involves jumping 30 fences. The Melbourne Cup is a flat race run over 2 miles.
​
Jump racing brings with it inherent dangers - to both horses and jockeys - that do not exist to the same extent in flat racing.

The data below presents the number of horse fatalities between 2000 and 2020 for both races. The first figure plots the cumulative number of deaths in both races.

​12 horse have died in the Grand National. 7 have died in the Melbourne Cup.

The second figure should be much more worrying for organisers of the Melbourne Cup and again presents the cumulative figure of fatalities in both races.

​Since 2010 more horses have died in a 2 mile flat race than in a 4+ mile steeplechase. There has been 7 fatalities in the past 8 years. This compares to 1 fatality in the Grand National since 2012. This is remarkable.

​One can only speculate on what is causing this (ground conditions, number of runner) but this trend needs to be halted.

By Daragh O'Leary

A post recently (see here) looked at the drop off in form of League of Ireland champions in the seasons following their success. The post captured an ongoing issue in the League of Ireland where league success is often followed with a period of gradual decline, and unfortunately for Cork City, relegation. This post got me thinking about looking at the form of champions in the English Premier League the season after they won the league. Now while the Premiership doesn’t have nearly as big an issue with the decline in form of their league champions, there does still appear to be a dip in form.

It is very rare for a team to successfully defend their status as champions. Only seven clubs have ever managed to win the title, Manchester UTD (13), Chelsea (5), Manchester City (4), Arsenal (3), and Blackburn (1), Leicester (1), and Liverpool (1) and just three of these have won the title two years on the trot. These teams were, Manchester UTD, Chelsea, and Manchester City. If we discount Liverpool, who are currently trying to defend their status as champions, then only 50% of the clubs who have won the title have managed to defend it. In fact, if we look at the net points difference in teams the season after winning the Premier League, we can see that declines in performance the year after winning the title are very common.

​The only year out of the past 10 that a title winning side managed to improve their points tally the following season was in 2012. That year Manchester UTD managed to accumulate 89 points instead of the 80 points they acquired the season before. What’s interesting about this is that despite the 9 point gain, they didn’t manage to defend the title that year because Manchester City beat them on goal difference. The mean points difference between a team the season they win the league and the following year over the last decade is -15.45.This news doesn’t bode well for Liverpool fans who are cheering their club on during their first ever title defence of the Premier League era. Hopefully they can manage to weather through this drop-off effect.  

By Robbie Butler

The new Republic of Ireland jersey was launched today, and for the first time since 1986, fans buying the shirt will not find a sponsor of the front. While the players never wore sponsored jerseys in competitive games, fan always had to act as walking advertisements for companies such as Opel, Eircom and Three.

The Irish were very much an outlier in this regard. Very few international teams use the jersey as a means of generating sponsorship revenue. Here is a piece I wrote in April 2019 for the Cork City match day programme on the subject and why the Republic of Ireland were an international trailblazer in this regard.

"In May 1924 the Irish Free State (today known as the Republic of Ireland) played its first international football match at the Summer Olympics in Paris, France. Bulgaria were the opponents that day, with the Boys in Green claiming a 1-0 win. Some 579 games later, the Boys in Green overcame Georgia by the same score line, in our most recent UEFA Euro 2020 Qualifier.
 
Green has always been a part of our national team. The vast majority of Ireland’s performance since 1924 have been in our national colour. It was only in 1969 that a changed strip of white became an option, as the game expanded. Gold was added to jersey from 1978, in various forms, culminating with a one-off “Kerry-style” jersey against Norway on the 1st of May 1985.
 
It was around this time that much of the evolution in football jerseys globally began to gain momentum. While international jerseys remained largely the same, Ireland did something quite different. In 1986 the Football Association of Ireland became the first national association in the world to place a sponsor on replica kits. Opel became a regular feature of Irish society and fans wearing famous jerseys from Euro ’88, Italia ’90 and USA ’94 all inadvertently acted as advertisements for the German car manufacturer.
 
This decision created an anomaly that continues to exist to this day. FIFA and UEFA prohibit the use of sponsorship on the front of jerseys in competitive games. This means that Irish fans buying the replica kit today actually buy a jersey that is obviously different to the one that players will wear during match day.
 
This has not stopped the FAI from successfully selling the right to place a company name on the front of replica Irish jerseys but does provide a rare example today of FIFA and UEFA rules preventing further commercialisation of the game. The Football League were the first to encounter this issue and the history of sponsorship deals can be traced, like most things in the sport, to England.
 
In 1976, non-league Kettering Town became the first professional club to adorn their jersey with a sponsor. They were immediately reprimanded by the FA, fined, and instructed to remove such wording from their jersey.
 
The following season, a number of Football League clubs proposed rule changes that would permit the use of sponsorship on jerseys. The proposals were accepted by the FA on the 3rd of June 1977. The rest is history. This is the reason today that we are familiar will sponsorship agreements long-since lapsed and brands such as Sharp, JVC, Candy, Holsten and Opel.
 
As many Irish fans will recall, Opel was replaced by Eircom from the start of the 2002 World Cup qualifying campaign, with the communications company subsequently replaced by “3” in 2010.  For Cork City fans this translates to brands such as Guinness, Nissan, Beamish, Clonakilty black pudding, and today UCC. Kettering Town are the architects of this.
 
If the ban of sponsorship on international jerseys is ever removed, the Republic of Ireland can rightfully claim to be the “Kettering Town” of international football."​

By David Butler

​I’m seeing more and more takes on the apparent ‘madness’ that is apparently taking place this season in the Premier League. Things are a little bit different, but not a whole lot. 

Here are some examples of the adjustments based on carrying out a quick analysis of the first 58 matches (rather than the equivalent fixture).

The gap in expected goals (xG’s) between home and away teams has decreased. For example, after 58 matches last year Home team xG was 1.66 on average, while for the away team was 1.23. This season the average home xG has fallen to 1.35 while the average away xG has creeped about it, rising to 1.40.

Second, there are later goals going in this season but not too many extra. Last season after 58 matches there was 9 goals in the 90+ minute scored and 16 goals between the 80th and 90th minute. This season there has been 15 goals in 90+ minute and 23 between the 80th and 90th minute.

Third, in the first 58 matches of last season, 13 odds favourites were defeated. This raises to 16 this season. Again, hardly a huge jump.

That’s just a few examples of the small match level differences. The league table does look somewhat ‘unusual’ at the moment but this is not uncommon after only 5-6 game weeks. At this stage last season (with fans) we had seen plenty of 'madness' – Chelsea had won 5-2 at Wolves and Norwich had beaten the Champion’s Manchester City 2-1. Leicester’s famous 0-9 win was only a few weeks away.  

The actual number of goals scored has increased and one is left wondering how much this is down to the application of the rules, stadia without fans and short pre-seasons.