By Robbie Butler

Pick up any standard microeconomics textbook for undergraduates and you will meet a chapter explaining the theory of the firm. Readers will be introduced to issues like profit maximisation, marginal revenue, average costs and marginal costs, amongst other things.

Embedded in the theory is an explanation of "shutting down" and "exiting" the market. The former is regarded as temporary closure, while the latter is permanent. Because of this distinction, the short-run decision (shutdown) and long-run decision (to exit the market) differ for the firm. If a firm shuts down, it loses all revenue from the sale of its product, but must still cover all fixed costs. Therefore, the firm will shut down if the revenue it would get from producing is less than its variable costs of production. The firm will only exit the market if total revenue from the sale of its product is less than the total cost of production (all costs).

Sky Sports have a lovely insight to this today thanks to an interview with Tranmere chairman Mark Palios. Football clubs have essentially "shut down" in recent months - with no fans at games. The variable cost of fans (security, light, heat, insurance, health and safety, policing, etc.) have largely disappeared. However, the reopening of stadia will bring these costs back. The fixed costs never left e.g. player salaries.

Palios explains the problem this is for clubs. 
"If you just come down the tiers to 2,000 fans [tier 2], our season tickets are 3,000. So actually cash-wise we are probably worse off because if we have fans in the ground, I know the costs would be about £10,000 to open up. We'd have all the gates open for social distancing, and all the turnstiles on. As a consequence of that, we wouldn't get anymore cash and we'd have to spend £10,000 a match. If it stayed like that, in the context of about a further 18 matches, it's nearly £200,000 of costs. And if you were allowed in 4,000, it's only for the extra 1,000 of general attendance [on top of 3,000 season ticket holders], but we'd still have the costs. It would be pretty minimal, with regards any excess for us."

A lovely illustration of fixed costs, variable costs and total revenue, and the problems facing clubs that rely on match-day income as their primary source of revenue.

By Robbie Butler

In August 2018 I wrote a short piece here about the newly formed Nations League. I have to add, more than two years on, I still struggle with the competition structure and what it might mean for future qualification.

In the original piece, I wrote the following: 

"The good news for the minnows is that they not only get to play one another, and therefore have a golden opportunity to register a rare international win, the winner of this group also qualifies for the 2020 European Championships. This poses an obvious question? Is a country better-off targeting a place in Group D rather than Group C? This logic can apply to Group C/B and Group B/A."

As far as I can tell, UEFA qualifying for World Cup 2022 is based on the current standings in the Nations League. Play-off spots will be available to the two highest finishing teams that fail to finish 1st or 2nd in their qualifying groups. This encourages team to win.

What I don't now get is qualification for Euro 2024.

If the same rules hold as for Euro 2020, are Northern Ireland now better off than the Republic of Ireland? The North were relegated to Group C last night, while the Republic survived in Group B with a 0-0 draw at home to Bulgaria. 

It should be noted, neither team will play at Euro 2020, having been in Path B play-offs. Yet Scotland will be there having been seeded in Path C.

My question remains. Is a country better-off targeting a place in Group C rather than Group B?  Surely, losing can't be better than winning. Can it?

​By Robbie Butler

On Saturday afternoon, as I was watching Crystal Palace play Leeds United, I was struck by a comment from the match commentator that this was the home teams' 8th consecutive season in the Premier League.

Those that are familiar with English football will know that Crystal Palace are somewhat of a yoyo club, and have 5 different spells in the Premier League. That means 4 relegations and 4 promotions (they were in the league in 1992/3 for the first season). Their 8-year stint is by far their longest spell in England's top flight. 

Crystal Palace's current stay in the top flight was thanks to a promotion at the end of the 2012/13 season through the play-offs. The play-offs are for teams that finish the season in places 3/4/5/6 and involve semi-finals (two legs both home and away) and a final at Wembley.

The Championship Play-off Final - which Crystal Palace have incidentally won more than another other club (4 times) - is often referred to as the 'richest game in football' or the 'richest game in the world'. This is because of the enormous revenue streams that can be generated from playing the Premier League through broadcasting, sponsorship, matchday operations and merchandising. 

On the 27th of May 2013, former England and Sunderland striker Kevin Phillips, scored a penalty in added time of first half extra time to beat Watford in the 2013 Playoff Final. Crystal Palace have reaped the rewards since. Each season the clubs stays in the Premier League, the more value this goal become. Phillips, now 47, is long since retired and played his last game in 2014 for Leicester City.

However, there is a more valuable goal. A year before at Wembley West Ham United beat Blackpool in the 2012 Playoff Final.  Portuguese player Ricardo Vaz Tê - currently playing with Portimonense following spells in Turckey and the Chinese Super League scored the winning goal, 3 minutes from time, as West Ham won by two goals to one. 

West Ham have remained in the Premier League ever since. Every club to win the Playoff prior to 2012 have been relegated at least once from the Premier League. Vaz Tê's goal unlocked nine seasons of the Premier League and counting. Just like Kevin Phillips' goal a year later, the longer West Ham and Crystal Palace survive in the English Premier League, the more valuable these individual goals become. 

With the 2020/21 season well underway it seems very likely both clubs will see an 9th and 10th season in the Premier League. By then Phillips will be 48 and Vaz Tê 35. The impact both had on their respective clubs lives on. 

By Robbie Butler

The new Republic of Ireland jersey was launched today, and for the first time since 1986, fans buying the shirt will not find a sponsor of the front. While the players never wore sponsored jerseys in competitive games, fan always had to act as walking advertisements for companies such as Opel, Eircom and Three.

The Irish were very much an outlier in this regard. Very few international teams use the jersey as a means of generating sponsorship revenue. Here is a piece I wrote in April 2019 for the Cork City match day programme on the subject and why the Republic of Ireland were an international trailblazer in this regard.

"In May 1924 the Irish Free State (today known as the Republic of Ireland) played its first international football match at the Summer Olympics in Paris, France. Bulgaria were the opponents that day, with the Boys in Green claiming a 1-0 win. Some 579 games later, the Boys in Green overcame Georgia by the same score line, in our most recent UEFA Euro 2020 Qualifier.
 
Green has always been a part of our national team. The vast majority of Ireland’s performance since 1924 have been in our national colour. It was only in 1969 that a changed strip of white became an option, as the game expanded. Gold was added to jersey from 1978, in various forms, culminating with a one-off “Kerry-style” jersey against Norway on the 1st of May 1985.
 
It was around this time that much of the evolution in football jerseys globally began to gain momentum. While international jerseys remained largely the same, Ireland did something quite different. In 1986 the Football Association of Ireland became the first national association in the world to place a sponsor on replica kits. Opel became a regular feature of Irish society and fans wearing famous jerseys from Euro ’88, Italia ’90 and USA ’94 all inadvertently acted as advertisements for the German car manufacturer.
 
This decision created an anomaly that continues to exist to this day. FIFA and UEFA prohibit the use of sponsorship on the front of jerseys in competitive games. This means that Irish fans buying the replica kit today actually buy a jersey that is obviously different to the one that players will wear during match day.
 
This has not stopped the FAI from successfully selling the right to place a company name on the front of replica Irish jerseys but does provide a rare example today of FIFA and UEFA rules preventing further commercialisation of the game. The Football League were the first to encounter this issue and the history of sponsorship deals can be traced, like most things in the sport, to England.
 
In 1976, non-league Kettering Town became the first professional club to adorn their jersey with a sponsor. They were immediately reprimanded by the FA, fined, and instructed to remove such wording from their jersey.
 
The following season, a number of Football League clubs proposed rule changes that would permit the use of sponsorship on jerseys. The proposals were accepted by the FA on the 3rd of June 1977. The rest is history. This is the reason today that we are familiar will sponsorship agreements long-since lapsed and brands such as Sharp, JVC, Candy, Holsten and Opel.
 
As many Irish fans will recall, Opel was replaced by Eircom from the start of the 2002 World Cup qualifying campaign, with the communications company subsequently replaced by “3” in 2010.  For Cork City fans this translates to brands such as Guinness, Nissan, Beamish, Clonakilty black pudding, and today UCC. Kettering Town are the architects of this.
 
If the ban of sponsorship on international jerseys is ever removed, the Republic of Ireland can rightfully claim to be the “Kettering Town” of international football."​

By Robbie Butler

There is a story in football circles that when a Premier League club was bought by an overseas investor in the late 2000s the new owners were unaware of the concept of relegation. Within a couple of seasons their new club had suffered just that - relegation. 

When news broke yesterday of yet another attempt to launch a European Super League I was reminded of this story. It was no surprise to me that Liverpool and Manchester United were yet again driving this concept in England. I think this is less down to the fact that they are the two most successful clubs, and the most supported globally. For me, the common denominator is that they both have American owners.

The difference in the style of ownership is stark and clear to see. In one city the owners are probably regarded as liberators that have returned a club to its full glory. In the other, the very opposite is probably the view held by many supporters. And while on the pitch their competition is fierce, off the field, their co-operation is clear to see. 

The establishment of a European Super League could be a further Americanization of European football. While details are still emerging, one thing this new league could do is remove the threat of relegation. This would effectively "close" the league and make it operate more like the NFL, MLB, MBA or MLS.

This is the crucial difference between US and European sports leagues and shifts the bargaining power from players and supporters towards owners. The  European super league would likely become an monopsony (own buyer of talent) and not punish entrants with the threat of relegation. The recently failed 'Project Big Picture', whilst not eliminating relegation, had argued that it should be reduced to just 2 teams in season in the EPL. 

To remove relegation would undermine 140 years of league football in England. Promotion and relegation are part of the fabric of the game. As it is in football leagues right across Europe. 

Take Luton Town for example. Since 2004-05 the club has enjoyed 4 promotions but has also experienced 3 relegations. The table to the right explains this.

At the start of the 2005/06 season Luton played in the 2nd highest tier of English Football (The Championship). The club then experienced three successive relegations, to League One, League Two, and in 2008/09 the Conference Premier Division (outside of the Football League). 

However, over the course of the past decade, the club has managed to make it back to the second tier of English football, just one tier away from the English Premier League. The revenue and resources that are on offer from reaching the Premier League are motivation enough to keep clubs like Luton Town dreaming.

I am sure this was as strong as ever during the years 2009-2013 when the club wasn't even playing in the Football League. 

If Luton ever reach the ELP, what a turn around that will be. A European Super League - without promotion or relegation - would limit the possibilities of most clubs.  While great for the lucky few, it would kill the dream for most. That's not European football and it never has been.

By Robbie Butler,

In the summer of 2017 I was asked to contribute to the Cork City FC match day programme. With University College Cork as the main sponsors of the club it was a nice fit and a chance to engage with the wider community in Cork.

I decided to touch on the general issue of championship uncertainty and the unique place that the League of Ireland holds when it comes to competitive balance. Within the article, which appeared in the match-day programme on the 9th of July 2017, I said the following:

"Often league success has been followed by a period of gradual decline, ending in financial distress and in some cases even relegation. The cycle of champions to relegation could take less than a decade to be complete. This rarely happens in other European leagues where followers will probably know Bayern Munich have just won their fifth consecutive league title, Juventus secured a sixth Seria A title, while Celtic have also been crowned champions for the past six seasons, and finished the current campaign unbeaten."

This may now become all too true for Cork City [again]. It has not taken a decade, but rather three years. The club remains bottom of the Premier Division in Ireland, and while relegation is still very much avoidable, less than 3 years ago the club won a historic league and cup double.

How can you go from double winners to relegation candidates in less than 36 months?

​In few (of any) other European league does a team that wins the domestic double face relegation 3 years afterwards.  And it is not the first time. Why does it happen here?

I have previously explored the issue here and here. One of the figures in the links is presented again below. It demonstrates how quickly League of Ireland champions can go into a spiral of decline 1 to 4 years post winning the league. ​Cork City's decline is even more rapid.

The rate of decline is even more apparent when compared to other European league winners from 2017 - the last time Cork City were champions.

The official UEFA 2017 Roll of Honour lists the league and cup champions that year for each nation member.

Should Cork City be relegated, the League of Ireland will be the only UEFA member where the 2017 league champions are no longer in the top division of their national league. This is an ongoing problem, and on which seems to be uniquely Irish. There is a need for the entire competition structure of the League of Ireland to be changed.

​As I have said previously, the removal of promotion and relegation would be the first positive step in helping what was once infamously called "the problem child" of Irish football.

By Robbie Butler & Ed Valentine

"It's an absolute disgrace. An absolute joke." These were the words of Sky Sports pundit Jamie Carragher following the awarding of a penalty to Newcastle United against Tottenham on Sunday when Eric Dier had the ball headed off his arm, while looking the other way. 

It is hard to disagree with Carragher. The new interpretation of handball by Premier League referees and VAR is a joke. In fact, it is quite incredible (to us at least) how often the ball seems to strike the arm of a player in the lead up to a goal or penalty. Before the introduction of VAR almost everyone had a fair idea of what was handball and what was not.

​Prior to the introduction of VAR it was assumed that the technology could deal with the likes of Diego Maradona and Thierry Henry - instances where the hand is deliberately used to control ball. I also assumed we might see VAR used 5-6 times per season. "Oh did you hear VAR was used in the game between...",  just like Goal Line Technology. Instead VAR is eating the game. In the search for consistency with handballs, the unintended consequence has been the awarding of almost anything when the ball hits the arm - deliberate or not. 

Some handballs are clear cut - like the two mentioned above - others are not. This is why there is a referee. To make those calls. People will disagree. So be it. Football had survived (and thrived) for 150 years this way.

​If the rules continues as they currently are, another unintended consequence will be countless penalties in each game. The data below (supplied by Opta) can illustrate this. 

The bar chart to the right shows the number of penalties awarded and scored in the first three game weeks of the Premier League, for the past three seasons.

2018-19 is pre-VAR and actually reports a higher number than 2019-20 when VAR was first used in the league. 

This season has witnessed a huge jump in the number of penalties awarded, half of which have been for handball. The 2020-21 figures, for the first 30 games, are already more than the two seasons previous combined. 

It is projected that the overall number of penalties could reach nearly 300 this season if this continues. That is not far off one per game. Penalties will become the norm - rather than the exception they once were - if this continues and handball will probably be the source of many of these.

By Robbie Butler

In May 2019 Irish national radio station Today FM broadcast its final episode of Premier League Live. The radio station had provided live coverage of a Saturday 3pm kick-off to radio listeners, and no doubt countless others online, for 21 consecutive seasons. I must admit, despite often listening to the show on the radio, I did not become aware of the decision to end the broadcast until the start of the 2019-20 season. 

I was both disappointed and surprised that the show had come to an end. For me, it was something that I habitually listened to on Saturday's and acted as a reference point in both my week and calendar year. As I reflected on the ending of the show in the weeks ahead, my surprise at the decision declined, but my disappointment remained. However, the game has changed over the past 21 years and the decision to end Premier League Live probably reflected this - and all of this before Covid-19. 

When I think of my consumption of the show it primarily occurred while I was in a car. I wonder how many others were in the same position? If I didn't happen to drive on Saturday afternoon, I probably didn't listen. 

A second issue must have been the television schedule that has become more and more important in recent seasons. The 3pm Saturday kick-off is now the home of many of the lesser games during the season. The 'big' fixtures generally take place at lunchtimes on Saturdays, on Sunday afternoons or Monday evenings. I wonder how much demand for listening was impacted by the games taking place.

The arrival of a 3pm game on television - the blackout does not apply in Ireland - was no doubt another blow to the radio show. Sometimes the game on TV was the same as that broadcast on radio. Of course, the televised game was behind the paywall, but could be viewed in most pubs.

And one has to wonder if the show would have survived this season, had it not been cancelled. The continuation of football behind closed doors means almost every game has a different kick-off time. Every game is broadcast on television, making the radio an inferior good. Well for most anyway.

With television today effectively having a match on numerous times a day, every day of the week, radio broadcasts may soon be a thing of the past entirely. 

By Robbie Butler,

Following on from recent publication successes in the Scottish Journal of Political Economy and European Journal of Operational Research, we were delighted to be accepted recently in European Sports Management Quarterly (ESMQ).  

The paper "New Insights on the Louis-Schmeling Paradox: Determinants of Demand for Subscription and Pay-Per-View Boxing" is co-authored with blog contributor David Butler and Head of Department, and Professor of Economics at Drexel University, Joel Maxcy. 

Despite its longevity and historical importance, boxing is a sport almost devoid of attention in the sports economics literature. To remedy this we created two new datasets and asked what are the determinants of main event broadcasting viewership and pay-per-views buys? In addressing this question we offer new insights on the uncertainty of outcome hypothesis [UOH] and extend research on direct demand for an individual sport.

For main events, we find conflicting evidence to the UOH. Fans show a preference for rematches, domestic boxers and heavier divisions. NFL broadcasts and earlier scheduling negatively impact viewership. For pay-per-views, we find a positive price effect - largely thanks to Floyd Mayweather Jr. Both types of broadcasts exhibit a negative trend with viewership and PPV buys declining over the period of time we examine.

The paper is currently in press and will be available shortly from ESMQ.

By Robbie Butler

Just like John in the post before this one, I too watched Stage 5 of the Tour de France. However, unlike John, my motivation was not to watch the cycling but rather the route in southern France that finished in the small town of Privas.

Most people (French people that I have met included) have never heard of Privas. With a population of less than 10,000 people it is easy to understand why. However, the town is a commune of France, and capital of the Ardèche department, the smallest administrative centre of any department in France. The reason I know is Privas is because I was lucky enough to visit the area 5 times during 2010-2013 while completing my PhD. It was fantastic to see the sprint finish into the town, along it's narrow streets, a far cry from the Champs-Élysées where the tour will finish.

And turning to Paris, where the Tour will end on the 20th of September, one can imagine that the Champions League loss is still fresh in the memory of Parisians. The end of the Tour might be a welcome distraction for many. The club's first appearance in the showpiece European game did not work out as expected. And while the champion of the Tour de France will always be crowned in Paris, the Champions League trophy has never been to the French capital.

And Paris is not alone in this regard.

One my second trip to Privas in 2010 I spent the entirety of my TGV journey from Paris Charles de Gaulle to Valence (south of Lyon) reading the wonderful Soccernomics by Kuper and Szymanski. I couldn't put it down. It was one of those rare books that I had to stop myself from reading, so as to have it for just a little longer. One of the earlier chapters recalls the success of club football teams in the European Cup. It is somewhat remarkable how so few clubs from Western capital cities have won the competition. PSG and Paris remain in this list.

The Table below lists the number of times the European Cup/Champions League trophy has been won by capital cities and regional cities in Western Europe. Just two other countries have clubs teams that have won the cup - Romania and the Former Yugoslavia. In both cases the teams were from the capitals (Steaua București (1986) and Red Star Belgrade (1991). Both were under dictatorship communists government at the time of their success. 

Berlin, Edinburgh, Rome and Paris are all devoid of success. This is not to mention Athens, Bern, Brussels, Copenhagen, etc. who will probably never boast the winner. Instead the power lies in the regional cities. Places like Munich, Milan, Liverpool, Manchester, Barcelona and Turin. And historically in cities like Birmingham, Nottingham, Hamburg, Rotterdam, Eindhoven, Glasgow, Porto and Dortmund.

Kuper and Szymanski hypothesize why this might be the case, and why capitals like Paris could emerge as winners in the not too distance future. But for now, Neymar and co. will have to wait.