By Ed Valentine

Recap of Week 6
 
The pre international break round of bets didn’t offer much selection and with the pot in the red bold action was taken with a triple on Serie A. Unfortunately, results didn’t fall and the bet was lost. There was added insult to injury as Juventus scored twice in the final minutes to come from behind only to have the winner chalked off thanks to VAR.
Hopefully some better luck this week, and there’s still plenty of time to claw back losses.
 
Week 7 selections:
 
Bayern Munich vs Leverkusen
Bayern to win @1.42
 
Liverpool vs Brighton
Liverpool to win @1.42
 
This will be placed as a double
€50 @ 2.02
 
Potential net returns € 50.82
 
The pot is €92 in deficit after 5 game weeks.
Total outlay €300
Total returns €208

Reviewed by Robbie Butler

All our previous book reviews (along with this one) can also be found here.

Paul Oyer’s “An Economist Goes to the Game: How to Throw Away $580 Million and Other Surprising Insights from the Economics of Sports” is a fun and highly enjoyable way to explore the brilliant world of economics through the lens of sport.

The book takes readers on a journey through a collection of sports stories, introducing some of the world’s most famous athletes along the way, and demonstrates how core economic concepts are at the very heart of these multibillion-dollar industries. Oyer clearly has a passion for both and uses his deep understanding of economics to identify issues such as opportunity cost, prisoners’ dilemma, and domestic product.

At the outset, the author uses some very nice personal stories of parenting a young child – which I can very much relate to – to demonstrate some of his early insights. Readers are offered insights into his memories of Little League matches and, later in the book, highly competitive table tennis games at home, which are both intuitive and nostalgic. Readers that grew up with competitive parents, siblings or children will immediately understand.

A subtle difference between this book and offerings that currently exist in this space is that it is written by a leading economist with an interest in sport, rather than a sports economist. There is a difference, and those that have little or no understand of core concepts in economics will thoroughly enjoy the examples and stories throughout and learn something along the way.

The early chapters of the book look at parental ‘investment’ in children, why people cheat in sport and whether elite athletes are worth all that money!? As Oyer points out early on “Youth is one of the most valuable resources you will ever possess”, and with the passage of time this becomes all the clearer. Kevin Durant, Russell Westbrook, and Steph Curry are used to demonstrate how ‘investment’ can work out – but the probability of success is so low you might be better off doing the lottery.

Comparative (or maybe even absolute) advantage is demonstrated by the success of Norwegian skiers. It helps that Norway has lots of snow.  Oyer then goes onto explain why east African runners have dominated long distant running. They naturally don’t make good skiers. There’s some tennis and women’s golf along the way, and he explains the importance of role models like tennis giant Martina Navratilova in shaping women’s tennis in the Czech Republic. Role models matter and path dependency is important.

Cycling provides the prefect prism for the famous prisoner’s dilemma. What does a clean cyclist do if they know everyone else is cheating? The magnificence of Usain Bolt is then described with readers left to question if something is too good to be true, can it be real?

Oyer’s clear passion and skill with labour economics comes to the fore when the pay and performance of leading US athletes is addressed in Chapter 4. One thing this enabled me to do was learn about sports and sports stars and franchises that I am not terribly familiar with, because the book has a clear America focus. There is not much European football (soccer) and reference to other sports, for example horse racing, using American examples when illustrating a point. Non-US readers may learn many new aspects of US sport, while the US audience will readily relate to the players, coaches and teams. MLA, NBA, and NFL dominate many of the examples, which is appropriate given the origins of the field in 1956.

And Rottenberg (1956) makes an appearance in the text. Oyer also speaks to many prominent sports economists and names such as Szymanski, Zimbalist, and Noll – household names in sports economics – are drawn upon.

The latter part of the book addresses more provocative issues such as discrimination in sport, taxpayer subsidies for major sporting events, the business of scalpers and why people gamble. All were fun and insightful but Chapter 7 “How Do Ticket Scalpers Make the World a Better Place?” really caught my attention. It’s a brilliant exploration of this world and the chapter knits together concepts like demand and supply, dynamic pricing, price discrimination and strategic behaviour, with the world of baseball, basketball, and hockey tickets. The book is worth reading for this chapter alone!

Chapter 8 confirms what we already knew – don’t build a stadium with taxpayers’ money or hold a major sporting event unless you want to make a significant loss. The chapter is a nice update on earlier contributions and begins and ends with the lucky escape of Kazakhstan, and the not so lucky Japanese and Russian taxpayers. But they are not alone, and a plethora of American’s are currently paying for publicly funding stadiums for local franchises that could at any point decide to relocate.

Sports gambling – a relatively new legal pursuit in the US market – brings the book to a close. The importance of gamble as a leisure activity (“I’m happy to lose a little because I consume the excitement of awaiting the outcome”) is brought to the fore. And while issues with problem gambling are addressed and explored, and it is acknowledged there are probably much more productive ways to spends one’s money, Oyer stands firm that people can spend as they see fit and there is “nothing wrong with people enjoying themselves”. 

A small bit of overtime/extra time sees a hat tip to the failed Super League in Europe. Association football does not appear prominently and the Super League – an American driver project – might make for a fun follow-up. It could consume an entire book! 

By David Butler

I recall Alex Ferguson emphasising how important luck with injuries was to maintain a title challenge. Some injuries may be due to a club's mismanagement of a player, although I would think this is rare with elite clubs nowadays.  Some can be pure chance.  The level of injuries incurred during the last round of nations league matches is a good example.

Ronaldo’s bloodied nose is the perfect image for my point. Is there any other labour markets where employers holding contractual rights knowingly release their labourers to perform for a third-party? Also, knowing full well there is a risk that this may damage their ability to perform and could entail costs in relation to rehabilitation from injury.This seems to be a relatively unique aspect of the labour market.

Due to injuries sustained during international performances last week the following players were substituted: Nathan Patterson, Memphis Depay, Teun Koopmeiners, Richard Almeyda, Andreas Weimann, Jules Koundé, Ivan Perisic, Kiefer Moore, Jere Uronen, Miralem Pjanic, Giorgi Aburjania, Aleksandar Mitrovic, Kieran Tierney, Aaron Hickey, Miguel Vítor, Jakub Brabec, Anastasios Bakasetas, Zan Karnicnik, Hrayr Mkoyan, Eden Hazard, Steven Berghuis, Dominykas Barauskas, Marcelo Brozovic, van Bakhar and Eduards Emsis.

Countless others could have picked up knocks and niggles but were not substituted. The list above seems long - 24 players - maybe clubs are coaching players to immediately seek to come off if they sense even the slightest of injuries?Regardless, the workers above will probably report back to their employer and not be able to perform their job because they hurt themselves while doing it for free/for expenses for somebody else - seems strange, right? 

By Robbie Butler

After much delay due to Covid-19, we are delighted to announce that the 14th ESEA Conference on Sport Economics is coming to Ireland for the first time next year.

The conference will be held from the 21st to the 25th of August 2023 at University College Cork.

As is custom, the annual PhD seminar precedes the main conference and will be hosted from the 21st to the morning of the 23rd of August. The main conference will then start on the afternoon of Wednesday 23rd of August. This event will include keynote speakers, various parallel sessions, the annual general meeting and conference dinner. 

Abstract submission details and information on deadlines will be available on our soon-to-be-launched conference website. The website includes conference information, advice on how best to travel to Cork and what international visitors can expect once they arrive in Ireland's second city. 

Further updates will appear regularly on this forum.

By Robbie Butler

Back in 2014, when this blog was less than one year old, David Butler explored video game sales in one of the great duopolies or our time; FIFA and Pro Evolution. For those unfamiliar with the rivalry, the FIFA series was developed by EA Sports and has existed in one form or another since 1993. Pro Evolution, often referred to as PES, is an alternative option created by Konami and has also existed in various forms since the 1990s.

Around 2000 the rivalry really took off when the FIFA series had to go head-to-head with the ISS Pro Evolution franchise. A common question at the time was FIFA or Pro? While FIFA had the advantage of licensing and trademark agreements, I always preferred the Konami series as the gameplay was better. Others would disagree and the battle for dominance would go on. 

Around 2008 something changed. As the 2014 posted illustrates, while FIFA outsold Pro in Europe, the gap between the two widened quickly from this point. I was among the converts to FIFA as the gameplay on the EA Sports game improved and had the added bonus of licensing.

Ironically, it was at this time that Konami's Pro Evolution began to acquire some licensing agreements - the UEFA Champions League for one - that sales began to plummet. Things wouldn't improve and the data below is an update of the 2014 post, with global sales for both titles up to and including FIFA 2019 and Pro Evolution Soccer 2019​.

Pro Evolution Soccer 2019 would prove to be the end of an era, and in 2019 Konami decided to switch focus and move into online gaming and esports with the launch of eFootball PES 2020. The battle with EA Sports and FIFA had been effectively lost.

This was probably a direct result of the failure of Pro Evolution Soccer 2019 to sell, with just over half a million copies of the title sold worldwide, coupled with the obvious declining interest in the game series from 2008. This compared the 8.5 million copies of Pro Evolution Soccer 2008​ sold globally. The FIFA series on the other hand was annually selling between 14 and 16 million copies. 

Konami have continued production of their esports game and eFootball PES 2020 was followed up in 2021 and 2022, with the most recent edition of the game dropping the famous PES title so that it is simply eFootball 2022. 

A second new chapter also approaches. EA Sports will make their final installment of their legendary game with FIFA 2023. World football's governing body have decided to end their 30 year association with the software developer for FIFA 2024. This game will appear next year, but will not be made by EA Sports. Instead EA Sport will launch EA Sports FC from 2023. 
​
Imagine, this time next year, we will live in a world where EA's Sports FIFA and PES are a thing of retro gamers.

By John Considine

Hurling is a game that rewards fair play and penalises foul play.  Evidence to support this statement comes from the 11 games in the 2022 Munster Senior Hurling Championship.

A game of hurling in 2022, at the highest level, involves approximately 124 passages of play.  Every game has two passages of play that start with the referee throwing in the ball, i.e. one per half.  Every game has two passages of play that ends with the referee signalling that the 35-minute half has ended.  Nearly all passages of play end with either (i) the ball leaving the field of play, or (ii) a player engaging in unfair (foul) play.  The start of the next passage of play depends on how the previous play has ended.  Restarts after the ball has left the field of play dominate, i.e. puckouts, sidelines, and 65m shots.  The distribution of 2022 restarts in the Munster Senior Hurling Championship are presented below.

While puckouts, frees, sidelines, and 65m shots are all uncontested restarts, they differ in terms of (a) their location and (b) the type of ball strike permitted.  Puckouts are from one’s own endline.  The ball is struck from the hand.  Sidelines are taken from the non-scoring sides of the rectangular field.  The ball is struck from the ground.  A 65m shot is one that is taken from a line that is parallel to the endline and 65m from the scoring goal.  The player will lift the ball with his stick, toss it in the air, and strike it.  A free for unfair play is normally struck in a similar fashion to a 65m (the player can opt to strike it like a sideline).  These shots can be awarded anywhere on the field except within 20m of the endline of the defending team.
 
Puckouts may dominate in terms of quantity but there is a strong case to suggest that hurling is a game of fair play.  Economists might say that there is a lot of incentive compatibility.  The biggest costs are imposed on teams who do not play the game as it is intended.  Teams are most likely to incur a score against themselves when they concede a 65m (touch the ball over their own endline outside the scoring zone similar to a soccer team conceding a corner).  Over 70% of these were converted in the 2022 MSHC (although these are rare events as shown above).  Where a team is penalised for unfair or foul play then the resulting free produces a score approximately 65% of the time.  This percentage increases by about 10% for frees that are within range of the scoring area (see previous post).  The picture below illustrates the likelihood of a score resulting from a particular restart.

The fact that sidelines are more likely to result in a score than puckouts surprised me a little.  But it is in keeping with the idea that the rules of the game should encourage players to play.  This is further illustrated by the picture below.  The picture illustrates the benefits of being awarded an uncontested strike.  Direct scores from sidelines and free shots have been removed (see previous post on sidelines).  The picture illustrates the benefits of having control of the restart.  The ratio of own to opposition scores resulting from a team’s restart is presented.  In all cases the ratio is above 1.  It is of benefit to have the restart.  In other words, there is a cost to the team who put the ball out of play.  But here is the beauty of it, the cost is lowest when a team puts the ball out of play when attempting to score.

And it gets even better if one separates successful scoring attempts from unsuccessful scoring attempts.  The return from a puckout after the opposition has scored is lower than when the opposition has missed (possibly due to the fact that the referee needs time to record the score and, therefore, ruling out a quick puckout).

​On these numbers, hurling is a game of fair play.

By Robbie Butler

Do we really need more seats?

​This was the question I asked myself earlier in the week when I read that South Dublin County Council had opened a tendering process for the naming rights of Tallaght Stadium, home of League or Ireland football club Shamrock Rovers. The council plans to increase the capacity of the stadium to above 10,000 seats as part of a €11.5 million investment. 

As our recent paper in the Economic and Social Review shows, the average attendance at Shamrock Rover's home games from 2012 to 2019 was somewhere between 2,041 and 3,444 fans. The maximum attendance at any game during the 8-year period was 7,021 . The current capacity of the stadium is 8,000. Is there really a need for a 20+% expansion?

Of course, there may be an element of Kevin Costner in Field of Dream - "If you build it, they will come". But Dublin is presently one of the most "seated" capitals in Europe right now. A post some 8 years ago on this site raised the issue and ranked Ireland as number one in Europe for stadium seats.

The illustration below is an attempt to update this, not at a country-level, but rather capital cities on these islands. I compare Dublin with Belfast, Cardiff, Edinburgh and London. One word of caution; this is open source data that should reliable but may have some shortcomings.

Dublin currently has more than 10 outdoor stadiums with seating capacity. Two of these (Croke Park and Aviva Stadium) have in excess of 50,000 seats. Croke Park has the third biggest capacity in Europe. With the current population estimate of Dublin at just over 1.2 million people, and more than 163,000 stadium seats, there is a seat in Dublin for nearly 1 in every 8 people. The GAA is responsible for about 70,000 of these and rugby in excess of 65,000 seats. Ignoring soccer's shared use of the Aviva Stadium, traditionally a rugby venue, League of Ireland soccer provides just under 20,000 seats. Cricket, horse sport and athletics provide the remainder.

While many people will travel to Dublin from outside of the city to watch events, the ratio of people to seats is quite high. However, it is topped by both Cardiff and Edinburgh. In the Welsh capital there is a stadium seat for every 4.3 people. Edinburgh is a close 2nd. The Scottish capital has a stadium seat for nearly 1 in every 5 people.

Belfast is similar to Dublin, with one seat for every 8.67 people. London has a tighter supply, with 1 seat for every 13  Londoners. England's capital has a whopping 686,000 stadium seats spread across icon venues such as Wembley Stadium, Twickenham Stadium, Tottenham Hotspur Stadium, Centre Court, Wimbledon, Lord's Cricket Ground and the London Stadium, home of the 2012 Summer Olympic Games. However, with a population of nearly 9 million people and more than a dozen professional sports teams it is easy to see how these stadiums regularly sell out.

Dublin on the other hand has very few full-time professional sports teams. And even those that are regularly fail to sell out their stadiums. And while it is not as concentrated as the capitals in Wales or Scotland, Dublin has nearly twice as many stadium seats per person than London. 

​Do we really need more seats?

By Ed Valentine
 
Recap of Week 6

Another difficult weekend for the project. The risky move to place a treble meant that the Atalanta draw with Cremonese ended hopes of a good pay out. With the overall total €92 down it’s going to be a difficult task to chase this back before the World Cup break. Always worth a try however. The pot is €92 in deficit after 6 game weeks.

Week 7 selections:
 
Atletico Madrid vs Real Madrid
€10 Draw @3.50 | Potential Returns €35
 
Newcastle Vs Bournemouth
Newcastle to win €40 @1.55 | Potential Returns €62
  
Week 7 Potential Returns €97
Potential Net Returns €47

By John Considine

Last week, Sky Sports News extended the Monday morning “Ref Watch” segment.  VAR was in the spotlight.  It is funny to see four people arguing for minutes about a single decision and then complain about the time it takes the officials using VAR to come up with a decision.  Frequently, there is disagreement amongst the four about events that took place 24 to 48 hours previously despite have had days and a variety of camera angles to view the events.
 
The key person in “Ref Watch” is a retired referee.  A person who no longer referees EPL games.  He is joined by a Sky employee and two former players.  I don’t know if any of the latter three have qualified as a referee.
 
The disagreement between match-day officials and others (from the pre-VAR period) is examined in a paper published earlier this summer in the Journal of Law, Economics, & Organisations.  In a paper worth reading, Paul Bose and his colleagues examine data on 13 seasons of Bundesliga games.  There is a staggering difference between the views of the match-day officials and the statistics company representatives in the stadium.  For example, match-officials awarded 704 penalties but the data coders in the stadium reckon there should have been another 620.
 
Again, I’m not sure if the data collector/coder in the stadium is a qualified referee.  Nor do I know how much they are paid.  Economists like to think that people get paid what they are worth.  The referees in Bundesliga games are on a base salary of €80,000 and get an additional €5,000 per game.  My guess is that the observer is lucky to get one-tenth of that figure per game.  Therefore, if there is a disagreement on a decision who should we presume is more likely to be correct?
 
The referees’ payments in the above paragraph are taken from another recent paper published in the Journal of Business Economics.  This paper examines the impact of VAR using Bundesliga and Serie A data.  This paper allows us to see the bigger disagreements between referees.  Below is Figure 1 from the paper.

The gap between the lines in the VAR period shows situations where the on-field official overturned their decision after VAR intervention.  It might be noted that there is little change in the overall number of penalties and, therefore, it is possible that the referees are deferring to VAR in questionable situations.  It could be something akin to the way officials deal with offside – let the game proceed and correct any mistake later.
 
It is hard to see disagreements over these decisions disappearing any time soon.  Maybe Sepp Blatter was on to something when, arguing against more technology, he said we enjoy arguing about the correctness of decisions.  These academic papers can inform those disagreements.

By David Butler

Last week the media reported that Leicester City are due to report annual loses of approximately £120m. Given the magnitude of EPL revenues it really begs the questions - what has gone wrong at Leicester? For a time, they were touted as one of the best run clubs in the UK.

While the club is making major infrastructural investments in training facilities, one part of the problem is poor decisions on player recruitment and the payment of inflated wages. At times over the past seasons, Leicester wage budget has been on a par with clubs that have major global appeal (which Leicester do not). Like many big clubs today the lions share of revenues are spent on players wages. The recent Leicester-style wage bill however is typically matched with Champions league revenues – it has been over 5 years since the club appeared at this level in Europe. Also, I’m led to believe the owners primary business interests are linked to airports, which suffered clear damage during COVID.

In a nutshell, I think this could be a case study in wage costs spiraling out of control. Below shows estimates of the clubs annual wage budget over the last 9 seasons – they have reined it in somewhat this season, but it is probably too late.  

Clubs don’t usually mind spending big on wages if they are getting bang for their buck on the pitch, so maybe Vardy and Maddison could well be worth it for Leicester at ~£140,000 and ~£110,000 a week (gross). Others are more questionable:  Jonny Evans (100k), Boubakary Soumaré (100k), Ryan Bertrand (80k), Dennis Praet (75k), Jannik Vestergaard (70k) are some examples of debatable contracts. 
​
All due credit to Leicester, they tried (and nearly succeeded) to break into the big six – but to do so would mean they would have to almost get everything correct (without blatantly breaching FFP). That’s almost impossible in football. They seem to have gotten their recruitment wrong for a period, with several players being awarded far too long and expensive a contract. With the revenues at the disposal of the Big-6, this type of error will be punished.