By David Butler

Over the past few months a growing number of Premier Leagues matches (in addition to other sporting events) have been broadcast by Snapchat as a ‘live story’. For those unfamiliar with the  technology, Snapchat is a global image and video messaging app that is freely available on smart phones.  It offers a new advertising platform given its massive user base. Live stories are compilations of photos and videos from Snapchatters at events and locations around the world.

According to Snapchat these live stories “typically appear for 24 hours”. Once you are in the location of a live story (inside a football ground for instance) you can make a contribution and it may be uploaded to the live story for the world to see. For instance, if you were inside the Britannia Stadium last Monday night you could send a Snapchat  image or video to the live story of Stoke vs Tottenham.

Perhaps broadcasters are already compensated for a live story, but it got me thinking whether broadcasting through this medium infringed on the rights of TV companies who have paid for exclusive access to Premier League matches. Albeit amateur footage, anyone with a smart phone could have seen action from the Britannia last Monday. Three of the four goals were shown. One didn’t need a Sky Sports subscription to catch lots of highlights for free.  The Premier League and Sky strongly support the 3pm blackout – I’m not sure if Snapchat stories are exempt from this too?

Live streaming through the internet seems to be the big challenge for companies like Sky going forward. While it’s clearly not the same quality of product now, is it too big of a step to think of phones having the technology to perfectly stream games to others outside of the stadium from where they are sitting in years to come? At concerts and cinemas I often see that attendees can be asked to leave if they are seen recording any of the material. Should this rule apply to those inside a stadium at a live sporting event?

The threat of smart phones and apps like Snapchat may not be worrying big broadcasters yet.  Evidently, they are still handing enormous sums over for Premier League TV deals. That said live streaming through smart phones  may be something to keep an eye on going forward - after all, these devices and the internet in general are only going one way!

By David Butler

The Follow the Pundit! page on this website keeps tabs on pundits who systematically predict scores in the English Premier League.  

Perhaps the most famous mystic is ex Arsenal and Aston Villa footballer Paul Merson. So how is the Sky Sports pundit getting on this season? After predicting 313 score lines, Merse has forecasted 44% of the match outcomes correctly. He has predicted the correct score line 7% of the time.  

As per last season, Merse overestimates the performance of some teams and underestimates the performance of others. This is a common pattern. Below is a Premier League table that shows the aggregation of Merson's predictions over the course of the 2015/2016  Premier League season. Merse has overestimated Arsenal’s performance by 24 points and Chelsea’s by 21. West Brom fans will be most aggrieved. He has underestimated their performances by 25 points and his predictions (if all correct) would mean that the baggies are rock bottom, collecting just 15 points!

Interestingly, on the 4th of September 2015 Sky Sports published how Merse thought the final table would look. It’s looking impossible that his predictions will be able to reflect this estimate with only a few rounds of matches remaining this season. That said, his individual predictions have reflected that he believed Norwich, Sunderland and West Brom would all struggle.  Leicester City are the elephant in the room of course, but who could have predicted their rise?
 
It may seem that Merse is not doing great with his predictions but he is performing just as well as  other pundits who make forecasts. To see similar statistics for Mark Lawrenson and Ian Holloway, check out the Follow the Pundit! page. This recommendation should come with a health warning for Aston Villa fans however (Lawro hasn't predicted Villa would score since Christmas!)

On Wednesday the 6th of April both Robbie Butler and myself are participating in a WIT Sports Seminar from 2pm.  At this I will be presenting more data on estimates made by pundits.  The title of the paper (with John Eakins & Robbie Butler)  is called Mystics and the Market – An Empirical Analysis of Premier League Score Predictions.

By David Butler

Last week Matt Cooper spoke about the possibility of allowing professional boxers compete in the Rio Olympics on his talk show the Last Word. The guests considered the merits of the AIBA’s proposal and the implications for Ireland. The aim is to abolish rules that stops boxers with 15 or more paid bouts from competing at the Olympics. The Independent newspaper carried the story and details last Wednesday. 

While Ireland’s Katie Taylor said the new rules would not alter her preparation, the re-design could spell trouble for Ireland’s medal chances at Rio. 57% of our Olympic medals have come from boxing – two gold’s, five silvers and nine bronze. The table shows Ireland's medal tally at the Olympic games.  

While nothing would be stopping Irish professional boxers from competing for a gold, something tells me that our share of boxing medals may not be as high if the proposal is ratified.You would have to worry for the amateurs, surely Wladimir Klitschko would like to add more Olympic golds to his CV?

By David Butler

This week Ezequiel Lavezzi and Nikata Jelavic joined a growing list of big name footballers that have decided to move to China. Lavezzi and Jelavic join players such as Jackson Martinez, Ramires, Alex Teixeira, Gervinho, Paulinho and Demba Ba. Well known managers such as Sven Goran Eriksson and Phil Scolari have also moved to Eastern Asia to work. The Chinese have shown a clear willingness to spend vast amounts of money to attract elite talent. 

It is interesting to think about elite talent flowing the other way to major Asian leagues, in this case the Chinese Super League. For many years the best Asian talent has moved to European leagues. The increasing migration roughly began at the turn of the millennium. Premier League fans will recall Arsenal signing Junichi Inamoto in 2001 and Tottenham signing Kazuyuki Toda in 2003. At the time I remember skeptics questioning whether there was economic motives behind these signings.  As the years have gone on however the best Asian talent has  continued to arrive on European shores with examples including Park Ji-sung, Shunsuke Nakamura, Hidetoshi Nakata, Lee Chun-soo and, now, Son Heung-min.

The chart below shows the number of footballers from Eastern Asian countries playing in the 'Big 5' European leagues for each season since 1992/1993. To be classified as Eastern Asian a player must be from China, Macau, Hong Kong, Japan, Mongolia, Republic of Korea or Taiwan.  The Bundesliga (yellow bars with numbers) has witnessed the sharpest increase in the number of Eastern Asian players over the years, with twenty Eastern Asians contracted to clubs in the top German league as of last season. This is highest number of Eastern Asian players to play in the 'Big 5' in any one season.

The growth in players from Eastern Asia seen above is primarily driven by South Korean and Japanese imports. My hunch would be that both Japan and South Korea's stellar performance at the World Cup in 2002 convinced European clubs of the quality of their talent. There is a notable increase in the numbers for the start of 2002-2003 season.

While the destination for elite players in Europe now may be the Chinese leagues, imports from China to the 'Big 5' have been few and far between over the years. On my count, there was only twelve Chinese players to join elite European clubs from 1992 to 2015,  all of whom had different levels of success. Five came to the Premier League, two came to France, one to Italy and four to Germany. A Chinese player is yet to play in La Liga. You might recognise one or two names from the list below.

With the 'Chinese Football Revolution' taking off, the question remains whether elite talent from Eastern Asia will  choose to stay there. Sure, big pay packets can attract usually aging but still marketable South American and African stars to the Chinese Super League, but will this be sustainable? Maybe a truer test of the Chinese Football Revolution is whether Chinese clubs can attract the best from their surrounding region, and of course, keep their best Chinese players at home. The phrase running before you can walk comes to mind.

By David Butler

Today is the final day of the winter registration period for soccer in England. This is marketed as ‘deadline day’. The Premier League explain the logistics of the system here. This day usually is associated with frantic negotiations.The graph below shows the number of summer deadline day (permanent) transfers to Premier League Clubs from 2008 to 2014. I gathered the data from a range of websites, most prominently the BBC, the Telegraph and the Express. I thinks it’s reasonably accurate. Approximately seven permanent transfers on average occurred on summer deadline days from 2008 to 2014.

By David Butler

As is the case with other sports such as tennis or horseracing, a golfer’s earnings is dependent on their relative performance. As each players performance can be precisely measured and we have access to all of the information regarding the distribution of the purse, researchers can gain some useful insights into a pure prize economy. The graph below represents the mean and median earnings for golfers on the PGA tour from 2000 to 2015.  

On average PGA tour golfers earned $658,300 in 2000. They earned $829,726 on average in 2015. During the mid-00’s this mean was higher. Of course these averages mask the substantial variation in the distribution, with the vast majority of golfers earning a relatively modest sum. For instance, in 2015 the top 20% of earners (77 out of 386 PGA tour golfers) accounted for 68.25% ($218m) of the total purse. The standard deviation for most years in the dataset is over $1m. While the size of the pie has increased over the last 15 years, inequality in the earnings distribution has also amplified. It has been greatest in the final two years of the dataset, 2014 and 2015. This growing inequality has largely been driven by more players participating on the tour since 2010.

Given the skewed prize structure of golf tournaments, where prize money is allocated in a descending order from 1st place, it is not surprising that this degree of inequality exists. That said, there is a long list of earners in all PGA tour events, sports such as horseracing see a much shorter list of earners (usually 1st to 4th only), so while golf may be unequal as sports go, it is not the worst.

For a more detailed take on earnings in PGA tour golf see Gerald Scully’s 2002 paper on The Distribution of Performance and Earnings in a Prize Economy in the Journal of Sports Economics.

By David Butler

Recently RTE, Ireland's national television and radio broadcaster, announced that they had won the rights to broadcast all fifty-one Euro 2016 matches as part of a European Broadcasting Union centrally negotiated contract with UEFA.  This is good news for soccer enthusiasts. An awful lot of sport will be crammed into one month, images of which will be beamed live into TV sets from the 10th of June onward. For others, I'm sure the forthcoming summer of sport (the Rio Olympics will also be screened) will be a penance and could test relationships.

Below are the numbers regarding viewing times and some comparisons which put into context the extent of Euro 2016 coverage that could possibly be aired on RTE.

If the channel chooses to make all of the content available via TV broadcasts or online, a soccer addict could view approximately 4590 minutes of action on RTE over the month . This figure is a minimum and doesn't take into account opening/closing ceremonies, added time, extra time, highlight shows, the musings of any pundit or the superb Après Match. While it may not be practical to watch every game live (as the last two group games kick off together), I'm sure the RTE player could accommodate those that want to see every minute.

To put this number in perspective, season twenty seven of the Australian soap Home and Away aired by RTE lasted 4935 minutes, that's two hundred and thirty five episodes that ran for twenty one minutes each. In terms of just the ninety minutes of soccer, if one was to watch every Euro 2016 match it would be similar to watching close to an entire season of Home and Away in one month. Season fifty three of the Late Late Show, Ireland's premier national talk show, lasted 4440 minutes, that's thirty seven episodes lasting one hundred and twenty minutes each. Again, spending this time with Ryan Tubridy over one month is not far off the Euro 2016 footage that will be available to RTE.

In terms of other popular drama and entertainment shows on RTE, watching the entire Euro 2016 would equate to viewing about two hundred and thirty episodes of The Big Bang Theory or about one hundred and fifteen episodes of Grey’s Anatomy. It would be the equivalent to watching RTE's latest Drama on the events of 1916, Rebellion, about 18 times or watching Francis Brennan rescue about one hundred and ninety two ailing guesthouses in At Your Service!

Of course, the European Championships only happens once every four years, so perhaps we should only think of a quarter of this broadcast time. For me these numbers put into perspective what those who have no preference for soccer have to endure for June 2016. The only silver lining for those that don’t like soccer...4590 minutes is slightly less soccer than the World Cup.  

This entry is an adaption of a previous post that considered screening times on RTE for the 2014 World Cup 

By David Butler
 
Over the years sport has acted as a useful domain to study decision making under risk and uncertainty. This is because incentives are at work in semi-structured environments where participants mostly have had the chance to learn.  A curious and quite old finding, where people make such ‘real-life’ probability estimations, comes from studying the behaviour of gamblers at race tracks.

The End-of-Day effect involves choosing bets that have a lower probability of occurring but higher payoffs, in the later stages of a round of gambling, and is one of many cognitive biases psychologists and behavioural economists have discovered. The problem at hand is intuitively quite simple. Imagine you are at a racetrack where eight races are going to post throughout the day. You have a fixed budget of a €10 bet per race. Let’s assume that you are not having any luck; you are backing favourites and none of them have won!

By the time the last race goes to post you are €70 out of pocket after seven previous failed bets. Given that you only have €10 euros left, what do you choose to place your final bet on? Do you a) bet on a horse that is clearly odds on favourite at 1/7, as you have been doing all day, or do you b) shift your preference to an outsider horse who has a chance but is priced at 7/1? If you stick with the 1/7 favourite and are successful (which is most likely to happen) you will leave the racecourse with €14.28 (a lot less than the €80 you arrived with). If you switch to the 7/1 long-shot however there’s an outside chance you will leave with your original budget of €80. Of course, as it’s a long-shot it’s more likely you’ll leave the race track penniless!

The most famous study on this idea was conducted in the middle of the 20th century when William McGlothin (1956) collected data on 9,605 horse-races, primarily from California tracks from 1947-1953. He was interested in the stability of risk taking behaviour over a series of events, in particular the constancy of subjective probability and subjective utility of those who place bets over the course of a day. On-course betting allowed the preferences of gamblers to be measured that were of equal expectations but different probabilities of success. McGlothin (1956, 615) concluded that “the group behaved in a manner such as to increase the variability of their assets as a series of risk-taking events preceded”. In the last race risky decision making increased as bettors shifted towards horses that held longer odds.

Further evidence of the end-of-day effect in the race course is provided by Muktar Ali (1977) who analysed 20,247 horse races over a five year period. Again, horses with a high objective probability of winning were seen to be understated and horses with a lower objective probability of winning were overstated.  This relationship was shown to be robust across different race tracks and alternative race conditions, supporting the original McGlothin (1956) study.

Why is this interesting to economists? The answers is because such behaviour is inconsistent with the predictions of subjective expected utility theory - a central theory in the discipline. This theory suggests that when offered a risky gamble we make a rational choice by  weighing up probabilities and likely consequences, consistently choosing the best outcome. In the thought experiment given above, you should treat the races independently. On average punters wouldn’t back a 7/1 shot over a 1/7 shot in the first race, so why would more people do so in the last? The problem is because it is psychologically challenging for any race-goers to treat their wealth level and races independently; logically one should not seek out a long-shot in the final race but rather incur a small gain of €4.28 (but retain a net loss) and treat the first race of the next meeting you attend as your next bet. 

While the End-of-Day effect is outside of the predictions of the traditional utility theory in economics, it can be accommodated by Prospect Theory. Perhaps we shift toward more risky bets as the day goes on  because we form reference points in regards to profit making? The reference profit is commonly zero. If gamblers are incurring high loses by the last race of the day they would prefer to substitute away from gambling on favourites, towards horses that have a lower likelihood of winning, in an effort to return to this reference point of zero.

My advice would be to keep the End-of-Day effect in mind the next time you head to the race track, casino or even when you see your bookmakers offer a boosted price for long-shots in later races.  By that last race of the day you’ll probably see punters who just don’t care about their final €10 and irrationally take a big punt that could, but probably won't, come off!  .

By David Butler

I gave a short lecture to senior cycle secondary school students (high school) on the Economics of Sport yesterday. The talk focussed on prize money distributions across sports. The event took place in University College Cork and my slides from the talk can be viewed below.