By David Butler

It was interesting to see that the impact of 'bots' on football was receiving attention this week. For those not aware, automated software now exists to track fantasy football teams of Premier League players and staff. The story took off when it was ‘leaked’ on social media that Jack Grealish was injured before Aston Villa's game against Leicester.

An interview with the creator of the software can be read on the BBC website. In short, the ‘FLP insider’ twitter account reveals information on the strategic choices of players/staff within clubs (those who have private information on player fitness, injures etc.). The software was created based on publicly available information accessible via linkedIn, Football Manager and other sources.

While the use of this software doesn’t have much impact on the fantasy game itself, there is a monetary implication - the information could affect betting exchanges where a myriad of exotics bets can be laid. i.e. if player X took out his team-mate from his fantasy team, and this team had a late kick-off, say on a Sunday evening, there would be time for this new information to be potentially exploited.  

Regarding on-the-field implications, the managers seem either somewhat upset, citing ethical issues, or are indifferent to it. The information might give a club a strategic advantage, if they can make the right inferences from the fantasy choices of their opponents. There is scope here as football has a tradition that see's the team sheet released close to kick-off (usually 1 hour prior). This is part of the suspense for fans and adds a strategic dimension for managers. Other sports differ. In rugby for instance, it is common that line-ups are announced 24 hours in advance.

There is another factor however linked to these leaks that is in the hands of the clubs – training ground pictures. Often savvy fans can reverse engineer starting line ups based on the positioning of players on the training ground or based on which group of players are conducting routines. Obviously, missing players from training also spark injury concerns.

​Rules to prevent footballers from gambling on the sport already exist, so should Fantasy Football also be forbidden? I think that would be somewhat draconian. Perhaps players should be encouraged to play anonymously and clubs themselves should keep a closer eye on who they allow take pictures during training. Perhaps clubs themselves need to be more transparent – maybe injuries need to be logged with the Premier League and published well in advance of matches. 

By John Considine

This website started in the middle of 2013.  One of the first Journal of Sports Economics (JSE) articles reviewed was written by Nola Agha and examined the economic impact of teams and stadiums (here).  It was unusual in finding a positive impact.  Now, in 2021, Agha returns to the pages of the JSE in a paper that highlights the difficulties finding a positive impact.  The reference to the 2013 paper is shoehorned in as a sentence in the conclusions.  This change in emphasis was the latest in a series of readings that prompted what follows.
 
A decade ago I was struck by a sentence in Stefan Szymanski’s brilliant Playbooks and Checkbooks.  The sentence is "Here is a roll call of some of the hero-economists who have dispassionately reported the evidence on the impact of major sporting events, without fear or favor, often suffering personal abuse, and frequently denying themselves the opportunity to line their own pockets for the price of what the politicians would like to hear”.
 
When it comes to telling politicians what they would like to hear in return for monetary gain, there is a long queue of professional firms, employing economists, that are willing to do so.  Should we call these the anti-heroes?  Maybe we should consider the distinction made by Daniel Drezner in his 2017 book called The Ideas Industry.  Drezner is mainly concerned with ideas in the area of foreign affairs and he distinguishes between what he calls “public intellectuals” and “thought leaders”.  The latter are second-hand dealers in ideas who package these ideas and sell them for direct financial gain.  They provide the intellectual justification for actions that the politicians may wish to take.  When it comes to major sports events, there plenty of thought leaders that will provide economic justification for a course of action.
 
While Drezner can be critical of the thought leaders, he does highlight the areas that they can do superior work to the public intellectuals.  A prime example is their access to industry financial information that is not publically available.  In addition, they can be more open-minded whereas some ideas held by the public intellectuals are elevated to ideology.  Moreover, it should also be pointed out that public intellectuals can gain indirectly from their ideological position, e.g. peer esteem and associated promotions.
 
More recently, I was reviewing a number of textbooks in sports economics.  Many of the testbooks accepted that there may be a theoretical case for public spending on sport but they struggle to provide concrete examples.  Here is a quotation from one of those textbooks, “while a coherent theoretical case can be made for public sector investment in sports, the evidence in support of this case is weak, and suggests considerable caution and planning is required to harness the spillover effects from the investment”.  Reference to public goods, externalities, and merit goods arise in the textbooks but very few unambigious concrete examples are present.

It was suggested that my review of the sports economic literature showed a bias and it was overly critical view of public funding.  If there was bias then is it mine or is it present in the literature?

By David Butler

A central way bookies make money is through the overround (vig) on a given bet. This involves bookies factoring in their cut to the prices offered to bettors. How much bookies want to take from each bet is key to what prices are offered. If bookmakers consistently price effectively, regardless of the outcome, they should not lose significant sums. In most cases, by pricing optimally they will nearly always win. 

This can be seen by looking at betting odds for any sports market. The implied probabilities derived from the odds will always be over 1.  Take the most recent EPL match between Everton and Manchester City – the odds suggested that Everton had an 9% chance of success while Manchester City held a 77% chance of success. There was a 17% chance of a draw.  The extra 3% goes to the bookies.

How does this overround vary in football? The graph below shows the overround for the Premier League last season prior to the COVID break. What can be seen is that the overround on each match usually varies between just under 3% up to nearly 4.5%. On average they factor in about 3.61% for themselves on each match. 

There can be some interesting things seen in this trend. First, the bookies take far less of a cut on the first round of matches where competition might be more intense in the market. Getting bettors onto your platform, with more competitive pricing (effectively a sale), might be seen as a useful strategy to keeping them.    

Second, the bookies take trends upward as the season progresses. In particular, after the turn of the New Year, the bookies start to increase their cut. 

Professor of sports economics Alex Krumer has recently uploaded content to YouTube that provides many intersting examples that illustrate the usefulness of sports data in economic research.

His most recent video can be viewed below - ​'Sports for economics like apples for physics'

By Robbie Butler

As expected, release of the 2020 financial accounts for the GAA did not make for good reading. The national game and Association were badly hit by the Covid-19 pandemic and reported a deficit of €34.1 million for the calendar year. These losses were a combinations of both central (€27.1m) and county (€7m) level deficits, and compare to a surplus in 2019 of about €10 million.

The core problem facing the Association in 2020 was both the decline in commercial and gate revenues. Combined, these revenues sources fell 60%, from €73.9m to €31.4m. According to the Association "In 2019 the GAA earned €36M from gate receipts, whereas in 2020 income from gate receipts was just €3.6M". This means that both revenue sources added about 50% each in 2019 but gate revenues obviously collapsed in 2020.  

While few could have predicted in early 2020 that there would be a collapse in gate revenues, reliance on this source of revenue makes the GAA look more like lower-tier football clubs in England or the early years of the Premier League. Broadcasting revenues now dwarf gate receipts in almost all major sports with the NFL and Premier League being the two best examples.

The GAA have sought to rectify this in recent years by selling broadcasting rights to subscriptions channels such as Eir Sport and Sky Sports. However, the sums involved still do not match ticket sales. For example, the current BSkyB/GAA broadcasting agreement, which runs until 2022, is worth about €11 million per year. This is about the same value as a single Premier League game broadcast by Sky Sports, BT or Amazon.

News that Amazon may be about to bid for GAA matches from 2023 could be good news for the Association. It might move the game away from a reliance on state aid (currently more than half of all revenue) and gate receipts.

The reliance on gate receipts is probably the main reason why a rescheduled calendar for 2021 would see club games start first, with inter-county matches starting later in the year. If the latter were to start in October, for example, restricted attendance might be possible, assuming vaccine rollout continues apace. Any revenue in this form would be welcome news following a dreadful 2020 season. 

By Robbie Butler

We received some great news recently when learning that our paper "Contracts, Pay and Performance in the Sport of Kings: Evidence from Horse Racing" had been accepted by the British Journal of Industrial Relations. The paper is co-authored with David Butler and Robert Simmons (Lancaster University). 

Using twenty year of data from 2000-2019 we explore the relationship between jockey pay and performance for flat racing in Great Britain. In essence, the work is an extension of Fernie and Metclaf (1999) and seeks to understand if  performance-related pay schemes can raise worker productivity with much of this increase due to worker sorting. The beauty of horse racing in the context is that it allows us to consider variations in the power of performance-related pay contracts which can be rarely observed in other employment settings.

Unlike previous findings, we find no evidence of worker shirking when the power of incentive contracts is reduced through jockeys switching from complete performance-related pay scheme into a salaried (retainer) contract. Moreover, salary contracts result in legacy effects with superior performance continuing for elite jockeys even after their salary agreements have expired. Amongst other things, we argue this is due to a reduction in monitoring costs. 

The acceptance marks our 4th peer-reviewed acceptance in sports economics over the past 10 months. It is also the 4th sport (rugby, football and boxing the other three) we have explored. I wish to thank attendees at the 2018 ESEA Conference in Liverpool and the 2020 NAASE virtual conference for their many helpful suggestions. 

Once ready, we will make a link to the paper available.  

By Robbie Butler

Last weekend there was a televised discussion about betting markets during live horse racing from Leopardstown’s Dublin Festival. The conversation discussed how gamblers bet today with all non-essential retail closed in Ireland. The answer of course is online. 

The switch to online betting – growing in popularity before Covid-19 – has increased at an even faster speed. With bricks and mortar betting shops closed for the foreseeable future, it will be interesting to observe if habits change once they reopen.

The other important element of the betting market that remains shut is the on-course betting market. On-course betting was a cornerstone of the betting market. Prior to government legislation in 1920s and 1940s, the only place one could have a bet in Ireland was at the course. This market therefore created the crucial “starting price” (SP) from which all off-course betting services then anchored upon. 

The on-course betting ring is a sight to behold. In fact, it provides a wonderful illustration of how a financial market – albeit a very short-lived one – works. The ring is a hive of information and prices. Bookmakers list prices and bettor (punters) respond. Part of the fun of going racing is walking around the betting ring looking for the best price. If positive information about the chances of a horse reaches the betting ring, punters will back the horse and the price will tumble. There are times when you might miss a price because you move to late.

Sometimes the betting ring will reach an impasse as punters and bookies are not prepared to trade at current prices. One bookie may increase the price of a horse and a rush will ensue. Observing this is both fun and interesting. If the bookie takes all bets and the price remains unchanged, those that backed might regret their rush. If however the punters force the bookie back to his/her original price, or lower, they might have been right to rush for the higher price. Often, you can observe bookies rushing to 'lay off' with other bookies, attempting to hedge against potential losses following a big gamble. Indeed, a handful of big bets can shift the on-course market.   
 
The return of the betting ring will be interesting to witness post-Covid. As someone said to me recently, they wonder if bookies will attempt to move over to debit card (tap) devices. Currently, the market is almost all cash. This would be an interesting step and could help the betting ring survive and maybe even grow. 

​Racing would be a much lesser place without on-course betting market. The last year has proved (to me at least) that betting online is a poor substitute to the fun and enjoyment of being in the betting ring. Maybe one consequence of the past year might be to reserve the fortunes of on-course betting. 

By Robbie Butler

I have dedicated a number of posts on this site to VAR over the past 18 months or so. I must admit, my understanding of how VAR works is getting worse rather than better with the passage of time.

From the economist's perspective the beauty of VAR, indeed football, is that it is about decision making. While the rules are codified, and have been so since 1863, interpretation of these rules is open to judgement - that of the referee. Prior to VAR many believed that the introduction of technology would move us from judgement or normative analysis towards science or positive analysis. I do not believe this has happened or if it is indeed possible with our current technology.

The biggest issue with the use of VAR for me is the scientific analysis imposed on one parameter (the attacking player's position on the field of play) and the arbitrary nature of the other parameters which are equally critical. Here are three that seem to be considered at the judgement of the officials:

1. When the ball is kicked. Offside has two points and differs from a photo finish in horse racing in this regard. It does not matter where the horses started (in national hunt racing at least) only where they finish. When the ball is kicked/first touched even, it actually has not left the foot of the player. To use a freeze frame with VAR's current technology, where the ball has moved (even slightly) is then not accurate. 
2. What part of the body the vertical defending line is drawn. When imposing this restriction, I have seen the line drawn anywhere from the shoulder to below the elbow. When the arm of the defender is outstretched this could be a foot of more in distance. 
3. Where the vertical lines touch the ground. These lines should be perpendicular to the feet. The recent Burnley Man City match illustrates an example of this not being the case. For me, this is the most glaring error of all. The left knee of a defending player had a line dropped that met the ground in the wrong place (at a 90 degree angle to the right foot and not the left foot) - an error. 

One of these problems is enough to undermine VAR. Combined, they demonstrate how inaccurate it can be and instead of improving decision making it could be making it worse. As someone said to me recently, we have moved back to 1990 when in-line with the defender was actually offside. The movement in the early 1990s to make in-line onside was very positive for the game.

Maybe in time VAR will evolve and a player will be onside if any part of their body is in-line with the defender. So we could have to go backwards to the early 1990s to go forwards.

By David Butler

Manchester United bounced back with aplomb last night after what was argued to be one of the greatest ever Premier League upsets. Their loss to Sheffield United was definitely a surprise, particularly given that this was a top versus bottom clash at the time. That said, anyone watching Sheffield United would see that they are not playing that badly (they are fourth from bottom on the attacking xG table). Both teams were arguably in somewhat of a false position at the time of the match.

How does this loss to Sheffield United compare to other famous upsets? One way of considering upset objectively is to use implied probabilities from bookmakers odds (adjusting for the bookies take). These are useful as they account for contextual factors at the time of a match.

The table below considers upsets in recent Premier League history where there is a single source of odds data. Some more famous upsets are left out (Bradford City 1 - 0 Liverpool - May 2000, Liverpool 0-1 Barnsley - November 1997). The percentage indicates the adjusted probability of the underdog winning.

United's recent loss only comes in ninth in the list. Interestingly, a home win tops the list as – market odds suggested that Norwich only had a 4% chance of winning at home to Manchester City last season. The second biggest upset was the Manchester United 2-3 loss to Blackburn in 2011. While this shares an upset probability with the next two fixtures on the list, the second criteria I have used is the draw probability (i.e. Blackburn’s chances of a draw were lower than Crystal Palace and Hull’s)

So, in the David vs. Goliath battles over the recent years, the Sheffield United recent win was definitely high on the list but probably not the greatest Premier League shock ever. For now, this belongs to the Canaries. 

By David Butler

The chart below uses the aggregate expected goals statistic to give some insights to performance and style in the English Premier League this season.

Ideally, clubs want to push themselves to the bottom right hand corner of this chart - holding a higher xG for and a lower xG against. . Unsurprisingly, Manchester City and Liverpool occupy this space. Aston Villa are a surprise package - they perform relatively well on both metrics. 

Getting out of the top left hand corner is Big Sam's task! West Brom are not creating enough chances and are conceding a bucket-load of goals. Burnley are still conceding too many and definitely not creating enough chances.

The unique style of Bielsa at Leeds stands out.  Scoring goals is not a problem. Neither is conceding them. For the casual supporter watching teams in this (rarely occupied) upper right-hand space would  probably make for the most entertaining viewing.   .