By Robbie Butler

This week the GAA announced that ticket prices would increase for the 2019 season following ratification of this by the organisation's Central Council. The move will see price hikes in both the National League and Championship matches. As one might expect, the reaction to this decision amongst supporters has been mixed. 

To understand the motivation behind this decision, economic theory can help. 

A standard sports economics textbook will address the demand function for sport (normally match tickets) at an early stage. Teams, or in this case the organisation running Gaelic Games, will set prices based on the typical fan’s willingness to pay. This prices is related to consumer surplus: the difference between what one is willing to pay and what one actually pays.

It is intuitive to reason that as prices go up, demand falls. Raising the price of a ticket will invariably reduce the number of fans willing to spend money to attend matches. This is offset by the increase in price. Whether the increase in ticket prices is worth the cost (loss of some fans) depends on the price elasticity of demand for match tickets. And herein lies the key.

• If one increases the price of a good or service, demand falls (as expected) yet total revenue (PxQd) goes UP then the decision was correct, from a revenue-raising perspective. 
• If one increases the price of a good or service, demand falls (as expected) and total revenue (PxQd) goes DOWN then the decision was incorrect, from a revenue-raising perspective, and prices should revert to their original level. 

Most research examining ticket prices and attendance find inelastic ticket pricing. In other words, teams and organisations could increase the price and in doing so increase total revenue.

So why don't they? Various reasons are proposed such as empathy with supporters, a desire to maximise attendance or the “fan experience, due to pressure exerted by supporter interest groups to keep prices down, maximising non-gate revenue, etc. It might even be the case that increases in ticket prices have no effect on quantity demand; none that is visible anyway. e.g. a stadium continues to sell out.

The GAA implicitly believe this to be the case anyway. The organisation as gone to great lengths to explain that this is their first major pricing increase since 2011. A statement released by the GAA ensured supporters that the additional revenue that is expected to be generated will be ring-fenced and benefit all counties as:
                    “A national pool will ensure that counties in lower tiers with smaller crowds are accommodated via the                            national pool. Additional revenue from these Championship ticket changes will be ring-fenced to fund an                        increase in grants to club facility redevelopments to a new high of €3 million, fund additional grant aid to                        overseas units and the staging of the GAA World Games in July, and make increases in capital grants                            and funding to county boards.”

The key words in this statement are at the start of the second sentence. "Additional revenue". In other words the Association is implicitly stating that they believe they are currently undercharging, if the objective is to maximise total revenue. 

At a practical level here are two of the changes:

1. All-Ireland senior final stand tickets go to €90 from €80 while a Hill 16 ticket will now cost €45, as opposed to €40 previously.
2. Rounds 1 to 3 of the All-Ireland Senior Football Championship Qualifiers tickets will rise from €15 to €20.

Attendance (quantity demanded) for point 1. above will remain unchanged (sold-out) hence total revenue will rise.

In the case of point 2. a 25% increase in price would need to result in a 25% drop in attendance in order to this decision to backfire. If 40,000 fans attended at Round 3 qualifier last year when the price was €15 will this drop, ceteris paribus, to 30,000?

​I think not. Demand is inelastic.  

By Robbie Butler

Sunday the 16th of August 1992 is somewhat synonymous in the history of English football. It was on that day at 4pm that the top division (re-branded as the Premiership) went behind a pay-wall. Thus Sky Sports Football was born. The rest is history.

From the start of the 2019/20 season 200 live games will be broadcast across three subscription channels; Sky Sports, BT Sport and Amazon's UK Prime Video. These games will be shown at times generally between Friday evening and Monday night.

It is safe to say, the movement from free-to-air to subscription television has been a huge success for the broadcasters, clubs and players. While ardent football fans could probably tell you Teddy Sheringham scored for Nottingham Forrest on that day in August 1992, in a 1-0 win over Liverpool, most GAA fans would probably not know the equivalent day in their sport.

From the first television broadcast of a GAA match in 1962 until 2010, all games were available on free-to-air television in this country. But as all fans of Ireland's indigenous game now know, some of the content can only be viewed on subscription television.

This changed (I believe) on Saturday the 6th of February 2010. At 7.30pm that evening Meath lined out against Armagh in the National Football League in Navan, with the game only available to television viewers on subscription channel Setanta Sports 1. What has happened since has not been as dramatic as the shift in football but rather a slow movement towards subscription coverage. In 2014, Sky Sports joined the party and has since screened 20 live games each summer, 6 of which are exclusive. This will continue until at least 2022.

And what then?

In February 2016, the then director-general of the GAA Páraic Duffy wrote in his annual report to Congress:
“Any restriction that prohibits the GAA from engaging with all interested parties, including subscription TV providers, would seriously reduce our negotiating power and thus our ability to achieve the true worth of our assets, and would inevitably lead to a greatly reduced media-rights income. In what is already a small pool of potential broadcast partners, we must ensure the existence of a genuine market for our games and maintain the option of engaging with all interested parties, regardless of whether they are free-to-air or subscription providers. This flexibility and freedom is crucial if we are to nurture a competitive tender process and thus ensure that the GAA achieves the proper value for its rights."

The Irish Statute Book ensures that all four All-Ireland Finals must be shown free-to-air. Everything else, as things currently stand, is up for grabs. The Munster Hurling Championship; the Super 8s; all eight semi-finals. While we are unlikely to see the dramatic shift that has occurred in football in England, it is reasonable to suggest that the six Championship games currently exclusive to Sky Sports will grow. And this is before National League games are included. You have been warned.

By Robbie Butler

Competition design is one of the most fundamental aspects of sports economics. Given the peculiar nature of competition in this field, and the need for joint production, the manner in which competitions are designed are often essential for the success and stability of sports.
 
Central to competition design are the issues of uncertainty-of-outcome and competitive balance. Any student taking a course in sports economics will probably meet these issues very early in their studies (my own class just have). Organisers regularly face the trade-off between contest quality and uncertainty-of-outcome. Between maximising winning effort or overall effort.
 
This Saturday, a Special Congress of the Gaelic Games Association (GAA) will meet in Croke Park to discuss, yet again, competition design within inter-country hurling. A number of county boards have submitted proposed changes to the current structure. The proposal that has probably received the most attention is the changing of the current knock-out Leinster and Munster championships, and their replacement with a round-robin competition from 2018. 
 
What might this mean? Well, one thing for sure is more games. For example, in Muster (excluding replays) there are just four games each summer. One quarter-final, two semi-finals and the Munster Final. Moving to a round-robin format, with the same 5 counties involved in the current Munster Championship, will result in a 10 games. A 250% increase. That’s before other play-off games are potentially introduced to decide the winner.
 
Other than giving sports economists more data to exploit, the increase in the number of games should result in an increase in broadcasting rights to the GAA. The competition design may also be beneficial from a sporting perspective sense as leagues are regarded as better than knock-out competitions in finding the “best” ranking of team abilities.
 
For those traditionally ‘weaker’ counties this isn’t good news as a league format should reduce uncertainty-of-outcome at the macro level. The plus side of course is that weaker teams will get to play repeatedly against stronger opposition under a round-robin format, whereas under the old knock-out system they may have played just one game before elimination.

By Robbie Butler

The new Pairc Ui Chaoimh opened recently to much fanfare and hype. As is normal with such developments a variety of figures, running in millions, have been thrown about estimating just how much this will be worth to the local economy. 

The stadium's first major fixture was held recently and saw the meeting of Tipperary and Clare in an All-Ireland Senior Hurling semi-final. A local fixture was held three days before and attracted more than 10,000 spectators! In attendance on at the first inter-county game, were the President of the International Sport Economics Association Joel Maxcy and 2017 European Sports Economics Association Conference host Bernd Frick. 

Our two visitors were amongst many that had travelled to watch the game no doubt. Supporters had travelled in numbers from both Tipperary and Clare, all adding to the local economy. There was also significant local interest. Many from Cork have been waiting months to get a glimpse of the new stadium. 

Those that could not get a ticket for Saturday had another chance the following day as Waterford met Wexford in the second quarter-final. I was amongst these spectators and natural supported the Deise. The new stadium is a sight to behold and rivals many locations I have been to both nationally and internationally. The value of Pairc Ui Chaoimh to the local economy is another question entirely and is complex.

There are certainly winners. All the pubs within walking distance of the stadium must be delighted to see the return of regular fixtures. The hospitality sector in and around the stadium was a big winner. The extend to which "Cork" wins depends on how many people travelled from outside the county. You need to be very careful here. I travelled to watch Waterford but added nothing to the local economy as I am here anyway. Corkonians that when to take a look at the new stadium also fall into this bracket. The local economy only grows by the extend to which people travelled from Clare, Tipperary, Waterford and Wexford and spent their money in Cork.

Such economic impact assessments require a level of analysis rarely afforded to them. Take any figure estimating the economic impact of such events with a pinch of salt.   

by Declan Jordan

My research interests of regional and sports economics probably mean I am very drawn to locational or spatial factors affecting sports performance. There is a very large literature on the effects of location on the performance of businesses, whether measured by innovation, productivity or profitability. As far back as 1890, Alfred Marshall recognised the tendency for economic activity to concentrate spatially - driven, he suggested, by external benefits to concentration (now referred to as localisation economies) including knowledge spillovers, availability of skilled labour, and access to specialised inputs. Michael Porter argued in 1998 that "paradoxically, the enduring competitive advantages in a global economy lie increasingly in local things". Recently I have done some work on this spatial aspect of performance, such as here. 

This area is a potentially very interesting one for sports economics and regional science, as the special features of sports leagues and competition and the availability of data make it possible to get at important spatial effects.

An obvious feature of sports is the importance of different sports across locations. Of course some of this may be obvious, where winter sports are perhaps more likely to be popular in colder locations. However, are there significant differences in success rates spatially, and can these be attributed to local features? Ireland may be an interesting case here, since the country is so small it is difficult to see why sports may be consistently successful on a regional or spatial basis.

I have just begun to look at the data for Ireland, but the table below is an interesting starting point. It shows the location of the winners of the League of Ireland (football), All-Ireland Gaelic Football championship, All-Ireland Hurling championship and All-Ireland rugby league since 1980 categorised by NUTS3 region. There are, of course, some data issues. NUTS3 classification has not been in place since 1980, there have been winners of each title (with the exception of hurling) from Northern Ireland in that period [these have been excluded], and the rugby league has only been in place since 1992. I have chosen 1980 because it allows me to include a football winner from the Mid-West - my own club Limerick who last won it back then.

Some counties do not have a senior hurling team or a team playing in the League of Ireland or at senior club level in rugby. However, there is nothing to prevent a team from any county participating and progressing in each of these sports, and the failure to have a team at those levels may indicate the lack of popularity of those sports in that county and/or the dominance of another sport there. (A difficulty also arises for the separation of Tipperary into two NUTS regions, while they compete as one county in gaelic games. Tipperary championship wins have been split 50:50 between the Mid-West and South-East regions - which explains why there are "half-wins" in hurling).

The table shows the number and proportion of winners by region. It is noticeable that for each sport there is a region that has won over half of the titles. Also, the most successful region is different for each sport. In some regions the success is driven by one county (such as Kilkenny in hurling in the South-East or Kerry in Gaelic football in the South-West).

It is clear that even in a small country like Ireland location matters for success in particular sports. There are some possible explanations, such as a type of demonstration effect where athletes in a county/region are drawn to the success of a particular sport in that area. This means history matters and there is an element of cumulative causation. This could also occur in relation to attracting funding and sponsorship. Perhaps there are strong clubs at the level under these elite championships that generate stronger competition and better players and teams at the elite level.

These are all interesting potential explanations and the research agenda for spatial analysis of sports performance in a fascinating future research area.

by Declan Jordan

Fans and commentators in Gaelic Football have been very exercised by the spate of one-sided games in the All-Ireland series recently (for a primer on Gaelic games see here). There have been calls for the Gaelic Athletic Association (GAA) to "do something" or risk turning spectators away from the sport. The future of the game itself has been called into question by the more doom-laden pieces. As someone with less than a love of this particular sport, I have given very little thought to the future of the game. However, there are some very interesting sports economics issues being raised by the current debate.

Jim McGuinness said, in an article in the Irish Times last week, that the one-sided games in the previous weekend made him fear for the game. He said "the gap between the elite counties and the rest is becoming a chasm. This is blatantly obvious now, and the GAA has to address the issue urgently". His suggestions to improve the situation centre around better coaching, paid for by more money from the GAA to "poorer" counties. An alternative proposal is Joe Brolly's suggestion of a two-tier Championship to ensure closer games is one proposed solution. 

What the arguments are based on is the classic idea of competitive balance. There are growing concerns that more games at the latter end of the Championship are so imbalanced that there is no uncertainty in the outcome. Jim McGuinness worries that "if what happened last weekend at Croke Park happens for the next five years in a row, then the 60,000 people who turned up will become 30,000 and it will dwindle from there. Who wants to see that?". 

Gaelic games are unusual in that they place greater importance on the knock-out Championship than the league tournament. In some ways the league is considered as a form of preparation for the Championship. Attendances at Championship games far exceeds attendances at league matches - even league play-offs and finals. A 'back-door' element was introduced to avoid the situation for decades where half of the counties would have one Championship game every year. Now counties are guaranteed a minimum of two - which is still a difficult situation for counties that train and prepare over the winter and spring. It also mitigates against team development where a county will find it difficult to progress on the basis of two matches at Championship level in a year.

The importance of the Championship also makes it difficult to measure competitive balance in Gaelic games. The structure of the Championships - with four provincial competitions leading into an All-Ireland series - also makes it difficult to determine how much (im)balance there may be nationally. Also, a knock-out tournament may at times through up mismatches simply because of the teams drawn against each other and how those teams have fared in previous rounds' draws. This is important in the current debate because very often the availability heuristic hinders good decision-making. This means we tend to rely on immediate examples and our opinions are more heavily weighted toward more recent information. In the Sunday Independent, Eamonn Sweeney was getting at just this notion (perhaps more succinctly than me) when he referred to the idea of a two-tier championship and worries about imbalance as this year's "Big Stupid GAA Idea".

So, is there any evidence, apart from a couple of games in which Dublin and Kerry rack up huge wins? The table below shows the number of counties that have appeared at different stages in the Championship since 2004. It also shows a breakdown between 2004 and 2009 (6 seasons) and 2010 and 2015 (6 seasons) - while the winners and finalists aren't known at this stage we do know that there won't be a new team reaching those milestones.

The main story in terms of imbalance in the Championship over the past 12 seasons has been a relative decline in  Kerry dominance between the two periods. Kerry appeared in every final in the first period - winning 4 of them. Since 2010 they have had to settle for "only" 2 final appearances and 2 semi-final appearances including this year. Interestingly Kerry's dominance at provincial level is stronger in the second period (winning 5 of 6) than the first period (winning 3 of 6). Dublin have dominated Leinster winning 10 of 12 titles while they have only recently appeared as the potentially dominant county. Over this period they have no final appearances until 2011 with 2 semi-finals in the first period. In the second period they have appeared in the same number of finals (2) as Donegal, Kerry and Mayo (this may after this year's semi-finals).

Looking at the numbers in general there would appear to be some evidence of greater imbalance as the number of counties reaching a semi-final has declined. However, it would seem that these counties may be more competitive as the number of different finalists and winners has increased.

I can't recall similar calls for two-tier Championships and moves to enhance competitive balance during the mid-2000s when Kerry were dominant. Perhaps the spectre of the most populated county (Dublin) with its potential for commercial success is dominating hearts and minds. If Dublin go on to win this year expect more calls for "something to be done". Otherwise we can wait for nest season's big GAA idea.