By Robbie Butler

The Wealth and Poverty of Nations is a masterful exploration of political economy by the late Harvard professor David Landes. Very early into this 650 page text the author raises the issue of Eurocentrism - a worldview that is inherently biased towards Western civilization, or western Europe (depending on ones' definition). 

At a recent event at the University of Oxford, UEFA President Aleksander Ceferin appeared to suggest that such Eurocentrism is alive and well in European football. The former Slovenian lawyer said the following about the recent Europa League Final stage in Baku, Azerbaijan:

"We decided a year and a half ago that we play in Baku, which has a modern stadium of 70,000. I think there is only one stadium in England that is bigger....If somebody asks me why we played in Baku, I would say: 'People live there. Homo sapiens live there...They had to watch the game at 11pm because of the time difference but nobody complained...If we have two Azerbaijani teams playing in London nobody would complain. They would come and play without any problems...We have to develop football everywhere not England, Germany only...[the] Europa League and everything else should be shared with the others who love football."

Ceferin's comment was largely motivated by the negativity surrounding the Final last month between Chelsea and Arsenal. Much of the commentary of the Final focused on the empty seats at the stadium and lack of atmosphere. Many questioned why fans had to travel so far to see their teams complete. A vivid example of Eurocentrism?

Although the 'big 5' have some of the largest populations in Europe, UEFA represents 55 full member associations . The association’s strategic plan from 2019-2024 has four pillars one of which aims to “Promote and develop football infrastructure across Europe”. Spreading the game is a mission that has been at the core of UEFA, and FIFA for that matter, for many years. This is why cities such as Baku get the chance to host major finals. 

It was impossible to predict who would play in Baku, and the distance fans had to travel was probably accentuated by the fact that Chelsea and Arsenal are under 10 miles apart. Despite what people may now believe, this was not a poorly attended final. In fact, it is the 3rd best attended Europa League Final to date.

Countries on the periphery of Europe are just as entitled to hosts these games as the England, Germany or Spain. In fact, I recall not so long ago a country on the edge of Europe hosting the Europa League final. I was there when two Portugesse teams just 55 km apart, were forced to travel a round trip in excess of 2,700 km. The location? Dublin. I don't remember the Portuguese having any problems. 

45,391 people showed up in the Aviva that night. There were 5,979 more in the Baku Olympic Stadium. 

By Robbie Butler,

One year ago next week I wrote this. The piece tries to explain where the Video Assistant Referee (VAR) can be usefully deployed in football, and where it cannot.

It's fair to say, the response to VAR has been mixed. It is very much debatable where the benefits of the system outweigh the (often) unintended consequences of using the technology. My original piece explains that in certain instances in football, video technology can help referees make better decisions. However, in some cases it is unhelpful. The crux of the issue is whether the rule of law is being interpreted objectively or subjectively.

Tottenham vs Manchester City last night provides two perfect examples.

VAR 1: Danny Rose's "handball".
IFAB Laws of the Game state that handling the ball involves "a deliberate act of a player making contact with the ball with the hand or arm. The following must be considered: • the movement of the hand towards the ball (not the ball towards the hand) • the distance between the opponent and the ball (unexpected ball) • the position of the hand does not necessarily mean that there is an offence." Deciding whether or not Danny Rose's action last night was deliberate is purely subjective. Some may argue he made himself bigger. Others may suggest his hands were in a natural position for a defender making a last ditch tackle and that there was a short distance between Rose and Sterling. I don't believe it was a penalty, and more tellingly neither did the Man City players or staff. Not one opponent looked for a penalty.

VAR 2: Heung Son-Min keeps the ball in play.
The question put to the referee is simply did all of the ball cross all of the end-line. This is not subjective. The ball either did or didn't. Here VAR worked perfectly, just like it does in tennis and rugby.

VAR is supposed to eliminate controversy, not cause it. It needs to be dropped in the case of VAR 1 and kept in the case of VAR 2.

​Referee's should decide if the ball was deliberately handled. That's what they are there for after all!

By Robbie Butler

I had the pleasure of lecturing the Thoroughbred Horseracing Industries MBA class at the University of Liverpool this week. We discussed funding horse racing in Ireland and the possible consequences of Brexit. The group came from a variety of industry stakeholders throughout these islands. 

At a general level, horse racing in Ireland is in relatively good health. According to Horse Racing Ireland (HRI), Irish bloodstock sold at public auction was to the value of €161.5m last year. While racecourse attendances continued to decline in 2018, large racing festivals are starting to attract record attendances again in recovery-Ireland. Prize-money also grew by 3.9% to €63.5m in 2018. it should be noted, more than 60% of this is sourced from budgetary support. 

While this annual report is largely positive, Brexit cases a shadow over the (very near) future. The eight "No" votes last night in the UK Parliament means a hard Brexit in early April remains a possibility.

30 years of progress within Irish racing could be undone over night. Chief concerns are centred on the Irish bloodstock industry, animal welfare and the tripartite agreement between Ireland, Britain and France. It remains to be seen how this will be affected in the weeks ahead and it should come as a concern that Aintree 2019 might be the last as we currently know it. 

While Irish racing successes in Britain have probably never been as obvious, the next two weeks will dictate if this could continue into the future, or come to a crashing halt. 

By Robbie Butler

Qualifying for Euro 2020 started last night and continues over the coming days. Scotland got off to the worst possible start losing by three goals to nil in Kazakhstan. The positive news for the Scots is that qualifying for the Euro's is not as difficult as it once was. The competition structure has changed quite dramatically since the early years of the competition, and next year 24 of the 55 UEFA members will appear at the finals. That's not far off one in two nations.

If one discounts the seven lowest ranked teams in UEFA (Gibraltar, Faroe Islands, Latvia, Liechenstein, Andorra, Malta and San Marino), every second country entering the competition will qualify.

Compare this to Ireland's first appearance at a Final's - Euro '88. While there were just 32 UEFA members, only 8 appreaded in Germany at the Finals. Just seven qualified as the hosts were guaranteed a place at the party. This means roughly 4 out of 5 countries watched on as Ireland famously toured Stuttgart, Hanover and Gelsenkirchen. This probably remains the countries biggest achievement when it comes to tournament qualification.

The figure illustrates the fraction of UEFA teams that could qualify for World Cups and European Championships from 1986 to 2020. ​

The trend line is almost flat (slightly rising). The interesting quirk in the data, if one looks closely at the years, is the flip in difficulty between competitions. In 1988 and 1992 the Euros were hard to get to, the World Cup much easier. Today the Euros have expanded meaning the chances of qualifying are much higher. World Cup qualification from Europe is much tougher and is likely to stay at way even after the competition expands.

So disappointed Scotland fans waking up this morning should take comfort. Yesterday's loss might not be as damaging as in the past. The Euro Finals are not what they once were. 

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.