By Robbie Butler

On the 1st of January 2019 Irish racing was shown for the first time on the newly launched Racing TV (formerly Racing UK). The move ended more than a decade of coverage by Attheraces (now Sky Sports Racing) and effectively placed Irish racing behind a paywall for the first time. 

I should be clear, Attheraces was not free to all Irish television users, but came as part of Sky's "Entertainment" pack – 90 channels that formed part of Sky TV's basic package. Other sports channels in this offering include Eurosport, Sports News and Sky Sports Mix. Up to the end of 2018, Attheraces had provided 100% coverage of all Irish racing. Not a single meeting nor race, at any of the 26 tracks on this island, failed to be covered live.

Some cited their concern, when it was announced last year Irish racing would move to Racing TV until at least 2023, and argued that the packed UK schedule might see Irish racing slide down the list of priorities. A recent piece in the Irish Examiner supports this view and cites a Saturday card at Gowran Park where races were short of lead-in time and lacked information of betting markets. Spilt screens were used during broadcasts, and some races were only joined midway through. The most damning of all was the failure to show any coverage of the last race at Gowran.

In the weeks leading up to it's launch, Racing TV advertised a price of €31 to Irish customers. If my memory is correct, the price was subsequently dropped to €12 for a promotional period, and can currently be purchased for €15 per month for one year. 

Aside from the fact that €31 is more expensive than my Sky Sports subscription, which provides access to many sports, and Irish racing does not get the same coverage as it has done previously, I fear there is a bigger problem for those selling the product. 

Pay-walled sport works because it is the only way to access coverage. Sky Sports has been a spectacular success since its launch in 1992 because it was the only way to watch live Premier League action until 2007. Since then it has been joined by others such as ESPN, BT Sport and soon Amazon; all also subscription channels.

28 days of Irish racing will be shown this year on free-to-air RTÉ. These include the biggest days on the Irish racing calendar and events such as the Irish Grand National and Irish Derby (which must be shown free-to-air),  Punchestown Festival, Galway Festival, Leopardstown and most recently Thyestes Day from Gowran.

Think of this comparison. If BBC or ITV had the right to show the 28 biggest Premier League games each season, how many people would subscribe to Sky Sport or BT Sport? The 28 would include Liverpool vs Man Utd, the North London Derby, the Manchester and Liverpool Derbies, Chelsea vs Arsenal all home and away, and a smattering of other games.

The business model works because this is not the case. Free-to-air customers have to waiting until 10.30pm on Saturday evenings to watch Match of the Day. While some would continue to pay subscription sports channels, I suspect the number of subscribers would collapse dramatically if free-to-air providers could cherry-pick the best games, as happens with Irish racing. 

From the perspective of the Irish racing consumer, long may the cherry-picking continue. 

By Robbie Butler

In the last year or so, I have encountered a number of research papers that focus on the economics of horse racing. This culminated in (what I believe was) the first ever horse racing session at the European Sports Economics Conference at the University of Liverpool last August.

Work in the area is now developing and members of this blog, as well as colleagues in the UK at the University of Lancaster and University of Liverpool are exploring the economics of horse racing. There is really so much to explore (e.g. labour markets, betting tax, efficient markets, government support of the industry, and the impact of Brexit).

Some focus has recently turned to UK’s pending exit from the European Union and the impact on the industry, but this has been limited. The scale of a hard Brexit, which is now becoming more likely by each passing day, has the potential to decimate the industry. Remember, this is an industry that only survives in Ireland thanks to generous Exchequer support each year. More than half of all public monies are then used as prize money at Irish racecourses. 
​
I have explored the issue on prize money on a number of occasions in the past. While the biggest prize funds on offer are on the other side of the Irish Sea (see here and here) the average level of prize money across all tracks remains higher in Ireland. This is particularly obvious at lower grade racing and has encouraged English horses to travel to Ireland (see here and here).

The difference in funding may be set to grow further. Last week Arena Racing Company which owns and operates 16 racecourses in Great Britain, announced that it would be reducing prize-money by £3 million as a direct response to the British government's recent decision on Fixed Odds Betting Terminal (FOBT) stakes. Leading trainer Mark Johnston’s response to this decision was:

“The prize-money is quite ridiculous and the whole situation of Arc cutting prize-money in anticipation of a potential cut in the number of betting shops and funding due to the FOBT reduction, which is hypothetical at the moment, is out of order. It gets to a point where it’s just not viable to take a horse all the way to Lingfield for that sort of money”. 

Others have responded in a similar fashion to ARC's decision. This resulted in a reduced card at Lingfield on Saturday, and one race on the card not attracting a single entry! The solution to the problem may be reduced cards in the short run, but in the long run trainers may need to look elsewhere. Independently owned Chelmsford City Racecourse is being used as an exemplar to demonstrate the type of money that should be put on offer, at lower grade races, to attract entries. 

Of course, another solution is for more horses to travel from the UK to Ireland to compete. Generally, horses and labour flow one way and not the other. A glance at prize money on offer last Friday night at Dundalk (Ireland) and Lingfield (England) demonstrates the difference. 

Dundalk's 8 race card had an average prize fund of €8,543.75 per race. Lingfield's 6 race card reports a figure of just €3,839.75. 

The total amount of money on offer at the Irish race course was €68,350, which is some €45,000 more than the €23,039 on offer at the English track. 

​All things equal, this should incentivise trainers in the UK to send more horses across the Irish Sea to race at venues such as Dundalk.

However, the extent to which this may now happen will largely not be decided to prize money on offer at Irish courses, nor reduced stakes at FOBTs in the UK, but rather events in Westminster over the coming weeks.

By Robbie Butler

The 2019 SSE Airtricity League Of Ireland Premier Division kicks off tonight with reigning champions Dundalk's game at home to Sligo Rovers broadcast on free-to-air television. State broadcaster RTE have so far announced plans to screen 18 live games from the domestic league, with further games inevitable as the season progresses. 

As the national league recommences, talk turns to which teams are likely to be successful. The currently stability within the Premier Division is something this has never happened before in the near 100 year history of the league. Many are predicting that Dundalk will continue their dominance at domestic level, which has been broken just once since 2014. The current champions are odds on to retain their crown in 2019.

Whether the reduction in competition witnessed over the past 5 seasons (thanks to the success of Dundalk and Cork City), has caused a negative impact on interest is debateable. In fact, some may argue the opposite. 

Since the emergence of the Dundalk-Cork "duopoly" in 2014 demand for attendance at games does not seem to have been dramatically effected. Figures from last season (2018) show attendance levels of almost 36%, relative to stadium capacity. This is higher than any of the four season previous.

​The figure below chart this, and also presents total ticket sales, as a fraction of stadium capacity, for the six clubs that have appeared constantly in the Premier Division from 2014 to 2019. 

Total attendance as a percentage of total stadium capacity (thick black line) has risen from 28.5% in 2014 to 35.7%.

It is interesting to observe the drop in 2016 to 25.04%. What might be causing this? It seems to be largely driven be declines in attendance demand at the top clubs; Dundalk, Cork City and Shamrock Rovers.

​There are a number of possible explanations. The first is that Dundalk's domination was viewed as a reason not to go to games. The club won their third league title in a row in 2016. The Louth club also performed remarkably well in the Europa League that season, reaching the group stages. Maybe supporters became less attracted to the domestic game after being treated to Maccabi Tel Aviv, Zenit Saint Petersburg and AZ Alkmaar in Oriel Park?

​The upside is that demand has risen in 2017 and again in 2018. Let's hope interest in the domestic game can continue to build . This can only be good news for Irish football and its domestic clubs. 

By Robbie Butler

In August last year, Sky Sports lost the right to screen live La Liga matches in the UK and Ireland. I wrote above this here. It was a blow to subscribers of the sports channel, as games were regularly shown live on Friday, Saturday and Sunday evening. Along with this, Sky Sports News regularly showed highlights of games from Spain's top division.

There may be an upside however. With the Champions League returning to our screens this week and next, it is the first opportunity to watch the likes of Lionel Messi, Antoine Griezmann and Luka Modric, crowned both "The Best FIFA Men's Player" and " Ballon d'Or" winner in 2018, since the World Cup in Russia last July. In the case of Gareth Bale, many have not watched him play since his Man of the Match performance in the 2018 Champions League Final last May. 

Before we were saturated with the best players in the world through the broadcasting deal Sky had secured. The loss of La Liga has reversed this trend.This brings me back to my childhood, and memories of watching many of the best players rather infrequently. It wasn't that I didn't want to watch these players, but rather that games were not broadcast and access was not available.

The UEFA European Championships and FIFA World Cup provided a rare chance to watch some of the best players in the world. In the case of top European talent, there would be a chance to see these players every two years at international competitions or maybe on a Sunday morning highlights reel. The top South American talent, particularly those playing in Brazil and Argentina, only appeared on our screens every four years. 

I often wonder how much I suffered from an availability bias - to only use salient examples that come readily to mind to make judgments - and representativeness  - drawing conclusions from very small and biased samples. Did this play a part in our evaluation of  all of these players were rarely encountered. For example, Brazilian players were held in awe. We couldn't watch these players on a regular basis and footage that did arrive on our screens was always showcasing the best talent.

For example, Denílson de Oliveira Araújo became the most expensive player in the world in 1998, when Spanish club Real Betis paid São Paulo £21.5 million for his services. At the time I had heard about his remarkable step-over routine. I built a narrative around this. Whilst he was a player of talent, that came on in the 2002 World Cup Final, he was not the player I expected him to be, having watched him at length. In fact, many of the international players that were showcased as being far better than the players we watched on a regular basis, were in fact no better. 

As broadcasting of all players across the world has become more readily available, I wonder to what extent the diminished mystery of those coming from places that were once largely unknown to everyone but scouts (Brazil and Argentina come to mind) has impacted upon their chances of success at global football tournaments?

17/23 and 19/23 players from the 2018 World Cup squads for Argentina and Brazil played with a UEFA affiliated league. European opponents at the 2018 World Cup would have been very much aware of their strengths and weakness. The 1970 World Cup winning squad from Brazil didn't have a single European based player. Argentina had just 6 European based players in their 1986 winning squad, only 3 of whom started the Final. Even the most recent South American winners, the 2002 Brazil squad, had a majority home-based squad with just 10 UEFA based players.

The rise of broadcasting, of not just domestic players, but all players globally, has coincided with a decline in success of teams outside of Europe at the World Cup. Maybe this is coincidence. Maybe not - perhaps the dissemination of information plays a greater role?. Regardless, I am looking forward to watching players that I have not seen in months, live on television over the coming weeks. 

 Robbie Butler

In early December I addressed the current title race in the Premier League and the remarkable pace being set by both Liverpool and Manchester City. As the league enters February it appears that the title will end up in either Anfield or the Eithad come May, unless one of the chasing pack can put a remarkable run of results together.

Whilst this is the normal course of events for Man City in recent years - the club have won 3 Premier League title since May 2013 - this is not so for Liverpool. Older fans of the Reds will recall the 1989/90 season with fondest, but the title has not returned to Liverpool since then. There have been a couple of near misses since.

Gerard Houllier's treble-wining squad of 2001 ran an excellent Arsenal close the following season. Rafa Benetiz managed to put Manchester United under pressure during the 2008/09 season without ever really looking like winning the title. The closest since 1990 is surely Brendan Roger's squad which came unstuck in the final 3 games during April/May 2013, having had the title destiny in their own hand.

So what might be different this time around? Like most things in football, the answer can be explained by money. Most that watch the Premier League would agree Virgil van Dijk and Alisson, both signed since January 2018 have transformed Liverpool's defence. Jurgen Klopp's acquisitions appear to be reaping their rewards. Since his arrival in October 2015, the German has added 16 "senior" players to his squad. A further 27 have left permanently.. In that time Klopp's net spend has been €128.23 million. 

Liverpool's improvement this season, when compared to Klopp's previous years coincides with a big increase in net spending. The graphic below illustrates this for Klopp's time in charge.

In total the club has spent €437.13 million on player purchases since the winter transfer window, during the 2015/16 season.

Klopp's spending effectively remained neutral until the summer of 2018. During that time the German added Sadio Mane, Georginio Wijnaldum, Virgil van Dijk, Alex Oxlade-Chamberlain, Andy Robertson and Mohamed Salah to the squad! 

These signings were financed by the sale of the likes of Christian Benteke, Jordon Ibe, Joe Allen, Philippe Coutinho and Mamadou Sakho. In fact, Benteke, Ibe, Allen and Sakho fetched €92.9 miilion. Salah, Mane and Robertson cost €92.2 million; a profit of €700,000. Coutinho sale for €135 meant the combined cost of van Dijk and Alisson stands at just €6.3 million. 

The improvement this season may be explained by a net spend of €134.7 million. This has been driven by the additions of Alisson, Naby Keïta, Fabinho and Xherdan Shaqiri. Only time will tell if this is enough to bring the league title back to Anfield.

If it is it, Liverpool fans will unanimously agree it was the best €134.7 million the club ever spent.  

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

Nearly two years ago RTE's Conor McMorrow wrote a piece entitled "Unease in Irish racing industry over Brexit hurdle". The story ended with Irish trainer Dermot Weld saying:

                 "When we had the original old border, there was always the danger when you brought horses to the North                        that they could be held up for a while. That's a long time ago. We don't need that again. We need free                            borders." Those comments sum up the views of an entire industry, if not an entire country".

Last night, following a Commons defeat on the Withdrawal Agreement, the United Kingdom government is no closer to securing a deal with the European Union once the country leave the trading bloc on the 29th of March this year.

To say this is a problem for the horse racing industry, indeed almost every business on the island of Ireland, would be an understatement. As of today, the use of World Trade Organisation (WTO) rules or a hard BREXIT, seems to be the most likely outcome, something that would not have been expected in June 2016.

This week, well-known Irish trainer Ted Walsh added to the debate and said on BREXIT that:
              "We rely on them (the UK). They have been good neighbours but we rely on them for most of our exports, a                   lot of imports and a lot of jobs for people".

There is probably not a sport on this island that is as connected as horse racing when it comes to the relationship between Ireland and the UK. As Walsh says, Ireland exports a large volume of product to the UK. The breeding industry is largely dependent upon UK customers. The reverse is also true; buyers in the UK depend on Ireland to breed horses. Ireland also exports labour to the UK in the form of jockeys, trainers, stable staff, etc. 

The relationship is further underlined by Horse Racing Ireland's (HRI) governance of both Down Royal and Down Patrick, two races courses located in Northern Ireland that are managed and partially funded by the Irish semi-state HRI.

And on a practical level consider this. The 2019 Cheltenham Festival starts on the 12th of March this year. One of the great aspects of the event in the past decade or so has been the English vs Irish dynamic to the races. The crowd is also littered with sports tourists from this island and the term "Irish invasion" is often used to describe the volume of Irish that attend the Cotswolds. People and horses will travel freely again this year.

Less than 4 weeks later, the Grand National Festival will start. Last year the first 4 horses in the race were Irish trained. Will this be the case this year in a post-EU Britain? Hardly if things keep going they way they are. 

Cheltenham will be the same this year. Aintree might not be. Everyone will lose if this is the case. 

By Robbie Butler,

On the 14th of November I wrote about the 2018 MLS season, and the rise of Atlanta United. The piece was in the context of competitive balance in Major League Soccer, and the fact that 12 franchises had won the US title, making it more competitive than any major European league over the past 23 years.

We can make that 13. Atlanta United were crowned MLS Champions on Saturday evening at around 10pm EST.

The remarkable thing about the "The Five Stripes" is that they are playing in just their second season of the Eastern Conference. In total the franchise has played under 80 games in its entire existence, yet is now the number 1 US football team.To put this into context, it is great to compare the closed system in the US, to the oldest set of interconnected leagues in the world in England.

It is difficult to know how many tiers there are in England (there could be up to 22) but it is safe to assume that there are at least 8 interconnected divisions. These range from regional leagues at the lower end, to the Premier League at the top, and are list below. 

Assuming Atlanta United were an English club, and had won promotion in Years 1 and 2 of their existence, the club would be heading into the National League South (given Atlanta's location in the US we will assume South rather than North). From a starting point in this league, it would take a minimum of 6 seasons before the club could even challenge for the Premier League title.

​The current dominance of the big six clubs in England's means they have little to fear from the remaining Premier League clubs (Leicester City may obviously disagree), never mind clubs in the lower tiers of English football. The rise of Atalanta United is not something you can expect to be replicated in England anytime soon, if ever. 

Just another example of how the structure of the same sport on either size of the Atlantic is different, and can result in very different outcomes.  

By Robbie Butler

Yesterday, Liverpool secured a dramatic last minute win in the Merseyside Derby to bring them back to within two points of Manchester City. As a fan of the Reds I was delighted at the end of the game, albeit in highly unusually circumstances. As is commonplace, once the final whistle sounded the league table almost immediately appeared on our screens. Liverpool, highlighted in blue, stood in second on 36 points from 14 games.

This got me thinking. Had any team in the Premier League era amassed 11 wins and 3 draws from their first 14, yet still find themselves second!?

The answer is no. 

Thanks to friends in OPTA, the data below can demonstrate just how hot the race for the league is this year. It will be very interesting to calculate competitive balance for the 2018/19 season, come May of next year.  

The first table demonstrates just how strong the top of the table is this season. Quite remarkably, Manchester City are two points worse off when compared to 2017/18. 

Newcastle United are a notable inclusion on the list, during the 1995/96 season, and are the only team not to go on and win the league having accumulated 35 points or more from 14 games. This record will have to fall this year, as either City or Liverpool, or maybe both, fail to win the league having reached 36 and 38 points respectively from 14 games.

The second table lists the seasons since 1992/93, 19 in total, where Liverpool would be top at this stage. The column on the right shows the number of points clear the Reds would be. On two occasions, they would be 9 points clear. One of these is compared to the Liverpool team of Gerard Houllier. On a further three occasions the Merseyside club would now be 8 points clear at the top. 

There certainly is a long way to go until next May but the pace that City and Liverpool are setting, and the evidence from past seasons, suggests the Premier League is a sprint more than a marathon. Exciting times lie ahead. 

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.