By Daragh O'Leary

The summer transfer window saw Arsenal spend over €230 million on players. While this might be a welcome bit of news for fans, I want to use it to shed light on an issue I feel isn’t being discussed enough regarding the North London side. They are simply bad at selling players.

This year Arsenal made just over €67 million from player departures. While this still leaves them in a negative net spend, it is a welcome improvement on their sales from previous years. A statistic which I feel illustrates just how poor the North London side are at selling players is that their record sale is still Alex Oxlade-Chamberlin to Liverpool for just €38 million – hardly a mouth-watering fee. When you compare this to Liverpool’s current record sale of €135 million for Phillipe Coutinho it doesn’t make for a nice comparison for Mikel Arteta’s side. Particularly when you consider that Arsenal has, for the past 20 years, been a team that always sold their best players e.g., Henry, Fabregas, Van Persie, and Sanchez. Arsenal’s record sale looks equally as poor when compared to that of the other Big Six teams.

I think there are a few reasons Arsenal perform poorly in this respect. Firstly, it is well documented that Arsenal went through financial difficulties during their years of austerity when they were saddled with enormous debt from the Emirates Stadium. It is possible that during this period Arsenal had to make money and maybe they had to take whatever offers they could get.
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Secondly, for the last few years Arsenal haven’t really had any players of worth which they were also willing to sell. The Gunners having been out of the Champions League for the bones of a decade illustrates how subpar their players have been of late. However, I think a major issue the club has had in recent years regarding player sales is due to their manager.

Let me make it clear that as an avid Arsenal fan I am incredibly grateful for everything Mikel Arteta has done to improve the club and this piece should not be construed as a call for the Spaniard’s head. I just think his attitude towards players that aren’t in his plans makes it very difficult to negotiate the sale of those players.

In economic theory there is a concept called the winner’s curse. It describes a phenomenon which occurs in common value auctions where the most optimistic bidder always wins the auction but, as a result, tends to overpay for the item being sold. Where I feel this might have a parallel with Arteta is that his actions towards out of favour players makes it very hard for bidders to be overoptimistic about them.

Arsenal’s biggest sale of the summer transfer window was their third-choice centre forward, Florian Balogun. The US international joined Monaco for €30 million, which isn’t necessarily bad money for a player the team won’t be using anyway, but I can’t help but feel they could’ve got more for him.

Florian Balogun is a starter for the US national team and last season he scored 21 league goals in Ligue 1 for Reims while on loan from Arsenal. Yes, there can be questions over the quality of Ligue 1, but surly finishing only 7 goals shy of Kylian Mbappe while at a mid-table team counts for something? I feel had Balogun been a Reims player and scored the same number of goals and Arsenal tried to buy him this season, they would’ve had to pay well over €30 million for him. Where I feel Arsenal shot themselves in the foot was in their public treatment of Balogun.

It was well documented that all outgoing players (including Kieran Tierney, Rob Holding, Nuno Tavares, Nicholas Pepe, and Sambi Lokonga) were training away from the Arsenal first team squad because they weren’t in Arteta’s plans. While I can understand that Arteta does this from the perspective of preserving unity and atmosphere among the first team, it is very hard for Arsenal’s technical directors to go into a negotiation and ask for a lot money for a player that they quite clearly don’t want to keep. At the very beginning of the season Arsenal’s first choice striker, Gabriel Jesus, picked up a knee injury and looked set to miss a few weeks. Even at this point Arteta didn’t bring Balogun into the matchday squad.

The message was clear, Arteta and Arsenal didn’t want Balogun. They viewed him only as a way of generating money for the club. This is something which Arteta is going to have to improve on if he wants to reduce Arsenal’s hefty net spend over the next few years. The seller in a transaction must always adopt a strategy whereby they effectively communicate to the buyer that they are selling them something which has value. In simple terms, pretend that you are perfectly happy to keep what you are selling unless your valuation is met.
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This is something Arteta frequently fails to do by regularly freezing out fringe players from the squad and making them train by themselves. It isn’t a coincidence that the club has failed to generate much money from other signings which were isolated form the first team squad as well like Ozil, Aubameyang, Maitland Niles, Cedric, or Pepe.

By Robbie Butler

My EC3219 - Economics of Sport module started last week. Having introduced the group to Rottenberg, Neale and Quirk, we also touched on issues such as competitive balance, uncertainty of outcome and salary caps. Today attention turns to the demand for sport; specifically ticket sales.

The Republic of Ireland's recent UEFA European Championship qualifier gives us a nice little example to consider. Prior to home games against Gibraltar (June) and the Netherlands (September) the Football Association of Ireland announced that tickets would be sold for both games as a package. This is largely due to the fact the Gibraltar are not a big attraction and demand for this game would probably be lifted by the predicted demand to watch the Netherlands in Dublin.

While ticket prices do vary across age and seat categories, adult tickets for both games started at €100. Therefore, if we assume that everyone was able to purchase at this minimum price, the cost per game was €50, with the stadium capacity 51,000 or 102,000 over the two games. Total Revenue was therefore maximised at €10.2 million. In reality of course, this was much higher.

So what happened? In total 91,963 fans attended across both games. There were 42,156 people at the Gibraltar game in June and 49,807 people at the Netherlands. That's €9.96 million in total revenue assuming all tickets were sold using this dual package approach. 

Did the strategy work? Most likely yes. Some 7,651 people paid for a ticket for the Gibraltar game and never showed up. That's €382,550 in extra ticket sales. 

There are possibly others that simply went along because they had a ticket. The last time Gibraltar were in Dublin was June 2019. The total attendance was 31,281. Assuming identical demand and ticket prices, that's an extra 10,875 tickets sold or more than €500,000 in extra revenue. In total, the decision could have yielded a minimum of nearly €900,000 of additional revenue.

There may have been some lost sales on the Dutch game. Just over 1,000 extra attendees could have went to the Aviva Stadium. Of course, these tickets may have been sold, but assuming they were not about €60,000 may have been lost, as some people were not prepared to pay for both games together.

As a football supporter, I did not agree with this strategy. I chose not to attend even though I wanted to originally go to the Gibraltar game. This approach is more suited to people that live closer to Dublin, were the cost of attending (both in money and time) is smaller.

For those living further from Dublin, a trip to the Aviva often requires a lunchtime start, traffic navigation, parking costs and a return home in the early hours of the following day. This approach maximize the income of the Association but not the welfare of some fans. Those setting the strategy certainly understand the economics of the sport and consumer surplus but, as someone said to me many years ago about a match referee, "They might know the rules, but do they know the game?"

By John Considine

There is a saying that “cycling is chess on wheels”.  Sometimes a speed or heart rate is added.  For example, cycling is chess on wheels at 60kph and 180 heart beats per minute.  Occasionally the comparison is between cycling and poker because of the need to bluff.  Regardless, the point is that there is strategic interaction.  Last Sunday’s stage in the 2023 Vuelta produced a wonderful example.

As the stage approached the final kilometres, the strategic interaction played out.  Three cyclists were in contention.  Initially, Santiago Buitrago made his attempt to break free but was followed by Rui Costa.  Buitrago asked Costa for help but the latter’s reputation for free-riding is legendary and well-earned.  Costa would not help.  This could have proved costly as the pair were being chased by Lennard Kamna.  Eventually, Kamna caught and passed the pair.  Costa started to chase Kamna and wanted Buitrago to help.  Even a goldfish would have remembered Costa’s behaviour.  A Kamna win could have been seen as karma.

Unfortunately for the romantics, just as it seemed Kamna was destined for victory, he crashed.  Costa was back in the lead.  The three played cat & mouse with each other as they approached the line until Costa’s better sprinting ability secured him the stage win.

Costa’s stage win is unlikely to feature as a data point in the peer-reviewed journals for a number of reasons.  One reason is that it involved three people.  Economists prefer two-person duels where they can appeal to solutions such as minimax.  A second reason is that the context of the interaction has too many elements, e.g. the length of the stage, the vertical and horizontal contours of the road, the priorities of the individual riders and teams involved.

That is not to say that the truel, rather than the duel, does not feature in the research literature.  What is needed is a neater context than cycling.  The Weakest Link TV game show provides one such example.  Steven Levitt used data from the show to examine racial discrimination.  A 2019 paper in the Journal of Behavioural and Experimental Economics used the TV show to difficult of solving the problem with three people.  There is a need to “seed” many truel solutions with focal or Schelling point.  I’m not sure if Schelling would have preferred the cycling case study to the data analysis of a game show.  Given his liking for fictional examples from the printed page or movie screen my guess is that he would have suggested an alternative.  Specifically, he might have opted for the ending to Western called “The Good, the Bad, and the Ugly”.  That said, it is hard to see Rui Costa as a Clint Eastwood character.

By David Butler

Ireland's ELO ranking continues to fall under Stephen Kenny's reign. As FIFA use a similar formula to calculate rankings, I can only guess this trend will result in a demotion to a lower seed soon.  The question is when will Ireland's  ranking bottom out - surely it cannot get much worse? 

By Robbie Butler

Another defeat for the Republic of Ireland last night. The post-match interview with the manager hit the usual notes. Among it he said "Covid is finished. We have been able to get full capacity crowds. You know, all our crowds are sellout, no matter who we are playing".

The data below is from Republic of Ireland's last ten home games. The capacity of the Aviva Stadium is 51,700. The percentage in attendance is presented for each game. The average attendance has been just above 83% of capacity. 

​Of course, there is a subtle distinction between "full capacity crowds" and a "sellout". This is because of the FAI's decision to bundle the sale of match tickets for some games. 

Just over 42,000 people attended the recent Gibraltar game in Dublin. Tickets for the Netherlands' game on Sunday had to be purchased with this game. If more than 42,000 people attend - which will almost certainly happen - people paid for a ticket for one game knowing they would not attend. A "Gibraltar tax", if you would, on the Dutch coming to Dublin. 

Gibraltar may have been a "sellout" but that is down to the marketing tactics to the FAI rather than anything happening on the pitch. 

By John Considine

As noted in earlier posts, Alex Bryson’s excellent keynote presentation completed proceedings at the European Sports Economics Association.  The presentation examined racial discrimination in sport settings.  He brought a smile to many with his explanations as to the benefits of using Fantasy Football data.  He pointed out that Harry Kane could not refuse to play with any particular team and, at the same time, Harry Kane could be selected to play in every team.  Bryson may have been stating the obvious but by doing so he makes us think about what such data bring to the subject.
 
While Bryson was talking about the draft in NFL, a question came from the floor.  The question asked about work done on the Rooney Rule – a rule that places racial requirements on the candidates interviewed for coaching positions.  Justification for the Rooney Rule seems obvious, even if the Brian Flores lawsuit questions the effectiveness.  Surely, we would expect that the racial profile of the coaches in the NFL should approximate the racial profile of the players.  A sizable difference between the profile of the coaches and the players is worthy of investigation and interventions such as the Rooney Rule.
 
It seems to me that we are less willing to consider the difference between the racial profile of the players and the racial profile of the general population.  The differences are illustrated in the picture below (taken from a 2014 report by Stephen Bradbury on black, minority and ethnic involvement in UK football).  Is it possible that the greater representation of BME in the players category indicates a level of economic disadvantage in the background of these players?  Most (sports) people seem to shy away from such questions.  Maybe the potential solutions are too big to contemplate.  We are entertained by the gladiators in the arena, we celebrate their journeys to arena, but we avoid thinking too much about how they came to be there and what it says about our society.

By Robbie Butler

Technological University Dublin's ​School of Tourism and Hospitality Management is seeking to appoint a Permanent (Wholetime) Lecturer in Sports and Leisure Management.

​The appointee will be expected to have an excellent knowledge and experience of the business and operations of the Sports and Leisure Industry.

The appointee will play an active role in the academic direction of courses including teaching, research, academic assessment and academic administration.

The School is also seeking to hire an Hourly Paid Part Time Assistant Lecturer (Panel) Sports and Leisure Management.

More information can be found here.

By Robbie Butler

it is hard to believe a week has past since the main conference started on the campus in UCC.

​Some pictures of the event below.