By John Considine

Economists have always known the value of a good comparison to illustrate a point.

In 1996 Mancur Olson used a few in his "Big Bill on the Sidewalk" article.  Olson asked readers to compare the economic performance of East Germany versus West Germany.  Or the economic performance of North Korea versus South Korea.  The latter example must be one of the most widely used examples designed to illustrate the benefit of good institutions and rules.  Advocates argue that it can't be geography because of the disparities in wealth either side of a political line (although Jeffrey Sachs makes a good case for a geography contribution to the disparity).

The power of outrageous comparisons was a key element in the efforts to get US airline deregulation.  Wayne Leighton and Edward Lopez explain it in their book Madmen, Intellectuals, and Academic Scribblers.
​
"A powerful weapon in these public hearings was the use of real yet outrageous examples, and the committee exploited them to full effect.  It showed that a traveller flying between Los Angeles and San Francisco, an interstate market not regulated by the CAB, would pay half as much as a traveller flying between Washington and Boston, or flying between two cities that were roughly as far apart and, importantly, that were regulated by the CAB".
 
Today, Sky Sports News produced a list of fine comparisons for their viewers.  Go compare!  Fines for racism are smaller than fines for infractions of kit regulations.

By John Considine

“We begin from the observation that games are not easy to play, or at least not play well”.  From this sentence onwards, I was receptive to the arguments made by Mark Walker and John Wooders in their American Economic Review paper about the strategies used by tennis players.  My memory is not what it used to be, however, I can still remember the difficulty in playing games.  When we lose those memories we more easily criticise current players for not being able to do things that we did with great difficulty (or could not do at all).  Reading that sentence by Walker and Wooders put me in a good mood.  The good mood helped sustain my reading effort.
 
Giving the writer a fair hearing is always a good idea.  However, I probably restrained my critical faculties too much on my first reading of a 2018 paper by Scott Kretchmar (published in Quest).  The subtitle of the paper caught my attention – “Why Playing Games Counts as Smart” – but it was the presentation of the argument that I most enjoyed.  Kretchmar says that when he was younger he somewhat bought into the “unintelligent jock” argument.  He does not launch a full frontal assault on this view.  He just has a bit of fun with it.  In the course of the paper he says “if game intellection led the way into culture – how deliciously ironic that would be”.  He presents his argument but does not seek to beat the reader over the head with it.
 
Kretchmar says that science, art, and sport are human actions based on expertise.  He goes on to argue that a commitment to expertise is a commitment to excellence.  Walker and Wooders come at the same idea but from a difference angle.  They use data from professional sports because “the participants have devoted their lives to becoming experts at their games”.  Their results lends support to the argument that expert jocks adopt the strategies that the theorists recommend.  The players play minimax at Wimbleton.
 
Similar findings are presented by Ignacio Palacios-Huerta in his book Beautiful Game Theory.  Here we find soccer players rather than tennis players.  In the first chapter Palacios-Huerta examines the behaviour of participants in penalty kicks.  The expert jocks perform as the theorists recommend.  The first chapter is called “Pele meets John von Neumann in the Penalty Area”.
 
The second chapter is called “Vernon Smith meets Messi in the Laboratory”.  Here our expert jocks are taken from the field of play.  They are taken from their highly pressurised comfort zone and placed in the somewhat artificial environment of a laboratory.  Here they play non-physical games with similar characteristics.  Again, the expert jocks come up trumps.  They demonstrate something like transferable skills and more abstract reasoning skills.  Or maybe we are witnessing the commitment to excellence that Kretchmar describes.

Vernon Smith shared the 2002 Nobel Prize in Economics.  His work in experimental economics explains the title of Chapter 2 from Beautiful Game Theory.  In recent years, he has advocated that economics needs to reconsider the great works of his 18th century namesake (Adam Smith), e.g. Humanomics: Moral Sentiments and the Wealth of Nations for the twenty-first century (2019).  In that spirit it is worth quoting from The Wealth of Nations (1776).

“The difference between the most dissimilar characters, between a philosopher and a street porter, for example, seem to arise not so much from nature, as from habit, custom, and education.  When they come into the world … neither their parents nor play-fellow could perceive any remarkable difference … they come to be employed in very different occupations.  The difference of talent comes then to be taken notice of, and widens by degrees, till at last the vanity of the philosopher is willing to notice scarce any resemblance.”

Smith poked fun at the vanity of the intellectual over the physical.  Kretchmar does likewise.

By David Butler

The pool stage of the Rugby World Cup concludes this Sunday. This part of the competition saw four pools with five teams playing each other once.  

In Ireland there’s a strong appetite to get up early and tune in to our matches but I doubt whether the same demand exists to view broadcasts of other pool matches.

The early stages are afflicted with balance problems making it difficult for a die hard, let alone partisan fan, to view many of the fixtures.

Looking at the bookmaker odds on the matches is telling. Of the 40 pool stage fixtures, I would consider only 4 to be well balanced – France vs Argentina, Australia vs. Wales, Namibia vs. Canada and Japan vs. Scotland. Four others are partially balanced – New Zealand vs. South Africa, Ireland vs. Scotland, Fiji vs. Georgia and USA vs. Tonga. The remaining 80% of matches typically feature a team with a ~90% or greater chance of success.

I know people will point to the two major shocks, Japan defeating Ireland and Uruguay’s success over Fiji, but for the most part the pool stage matches are dead rubbers. For many the outcome is so certain bookmakers may not even lay a team.

For example, the bookmakers deemed New Zealand chances of defeating Canada and Namibia to be over 99%. The same is true for their upcoming match against Italy. Is there any point playing it?  The All Blacks duly beat Canada 63-0 and Namibia 62-0 (the two biggest points margins in the competition so far). There are other examples of this extreme level of imbalance – Ireland vs. Russia, Australia vs. Uruguay, South Africa vs. Namibia, South Africa vs. Canada.

Interest will likely increase from the quarter finals when “the competition gets going”. From here on we will likely see more balanced, better quality matches.
​ 
At present however, the design of the pool stages isn’t doing the competition any favours from a sporting perspective. Reducing the number of teams would likely make a more competitive group stage. There are obvious economic trade off’s here and the fact that scaling things down would also “kill the dream” for many small rugby nations. 

By Robbie Butler

The subject of Video Assistant Referee (VAR) has been addressed a number of times on this blog (see here, here and here). This is my latest observation of the system which I must admit I am not a fan of. 

Eight rounds into the Premier League season and the use of VAR, as expected, has been widespread. For the first 5 to 6 weeks I noticed that assistant referees were effectively becoming redundant when it came to calling offside decisions. What appeared to happen was either 1) the assistant referee would not put up the flag in cases which could be offside or 2) wait for a prolonged period before putting up the flag, having probably been alerted by VAR to do so.

The upshot of this was that in scenarios where the assistant referee would not put up the flag and play continued, resulting in a goal, VAR would then be used to determine offside. If there was no offside the goal stood. If offside was an issue the goal was chalked off. Therefore, VAR would only take away. A good example of this recently, was Serge Aurier's disallowed goal for Tottenham at Leicester. 

Now consider what appears to be happening over the past week or so. The behaviour of the assistant referee has changed and they are now calling offside in the manner they have always done. I suspect this change in behaviour has been motivated by those with decision making authority..  

Two recent examples of this are pictured below. The left shows Pierre Emerick Aubameyang goal against Manchester United on Monday night which was initially ruled offside. The left is Jordan Ayew's goal against West Ham last weekend. This was also initially ruled offside. 

​In the case of both decisions, VAR intervened and allowed the goals. Many jumped to the defence of VAR claiming this demonstrates how good VAR can be. During the wait for Ayew's goal against West Ham, the commentator even said, "And VAR, that is so often criticised for taking away, looks like it is going to give here to Crystal Palace". Is VAR really giving? I don't think so. There were not "two more goals" because of VAR (Aubameyang and Ayew).

What has changed is the behaviour of assistant referees. If they had behaved as they had done earlier in the season (not flagged), Aubameyang and Ayew would both have scored and celebrated. The VAR check would have confirmed the goal. VAR could not give what was already given.

Changing behaviour of the assistant referees may be an attempt to show that VAR can actually give goals. Don't be fooled. VAR hasn't changed, the assistant referees have. 

By David Butler

​Newcastle United supporters are renowned for following their team through thick and thin. While the fans have longstanding grievances with their owner, they still usually turned up on match day, often to protest first.  

The Geordies may finally had enough – the first three home matches attracted crowds of 47,635 (Arsenal) 44,157 (Watford) and 43,360 (Brighton). Even a shock 1-0  win at Tottenham (the bookies gave Newcastle a ~9% chance of success) wasn’t enough to get a full house for the Watford game. The attendance figures at St. James Park have been the lowest for the past three seasons for the Premier League home matches this year – 91% vs Arsenal, 84% vs Watford and 83% vs Brighton.
​
It’s worrying times on Tyneside. 

By John Considine

Think of all the people that recruit Tom Brady and the New England Patriots to illustrate their arguments.  A sort of intellectual product endorsement.  This is especially so when it comes to decisions.  Tom is an exemplar.  His decision making under time constraints.  His decision making off the field to ensure his 42 year old body can compete at the highest level.  His decision making about the structure of his contract that enables the Patriots to remain at the top of the NFL.

The latter example of Tom's decision making plays a central role in a nice small book called The Importance of Small Decisions (2019).  There is a section in the third chapter titled "Drafting Tom Brady".  There is a discussion of the Scouting Combine and the Wonderlic Test.  There is also a brief discussion of some economics literature on the draft.  Relatively standard stuff.

The discussion of Brady's contract arises in a later section in the same chapter.  The authors are interested in Brady's decision to restructure his deal in 2015 so as to "free up $24 million so it could be used to buy other players".  They use this decision to illustrate one quadrant of their decision making framework.  The authors locate Brady and the Patriots in the top left hand corner of their map.  [This is also the place where they locate economic (wo)man.]  Tom Brady is used to add weight to the argument that they seem to want people to live in the Northwest.

I was reminded of this when watching Sky's coverage of Week 3 of the current NFL season.  The presenter and guests were discussing the percentage of the salary cap taken up by the quarterback.  They divided the quarterbacks into two groups - older and younger quarterbacks.

​When discussing the younger quarterbacks, the year of the draft and the pick was listed.  The key seemed to be the pick number.  Lower pick numbers took up larger shares of the salary cap.  Baker Mayfield (1) was at 4.0% of the salary cap.  Patrick Mahomes (10) gets 2.4% of the salary cap.  Dak Prescott (135) gets only 1.1%.

The older quarterbacks tended to have a larger share of their respective salary caps.  Here we see some evidence of Brady's decision discussed above.  Maybe Tom illustrates the usefulness of the decision making map.  Maybe.

By Robbie Butler

On Friday last, we joined a group of academics and industry experts from around the world at the 1st Reading Football Economics Workshop. My paper examined the evolution of the football jersey through time, and was presented just before the keynote address.

The keynote fitted nicely with my work, as Prof. David Forrest (University of Liverpool) spoke about the economics of sport and the gambling industry, and started his presentation with a picture of the Real Mallorca jersey bearing the sponsor "Betfred". 

As the presentation advanced, the audience heard that today 10 Premier League teams (50%) are sponsored by a gambling company. However, none of the Big Six are sponsored by this industry.

The tables below are the league standing, where the club name has been replaced by the sponsor's industry, for 2018/19 (left) and 2019/20 as of the 27th of September 2019. I think they speak for themselves and should be cause for concern for football policymakers and other stakeholders.

By John Eakins

​​While watching the Ireland v Scotland Pool game last Sunday, it occurred to me that the Captain for both teams played in the same position in the team (Hooker or Number 2 - Rory Best for Ireland and Stuart McInally for Scotland). It made me wonder if this was a more common occurrence as I could recall some international captains in the past who also played in that position (Dylan Hartley of England and Sean Fitzpatrick of New Zealand were two that sprung to mind).
 
While admittedly a crude sample to examine, I collected data from the squads of the teams at the Rugby World Cup currently taking place (looking at club teams and/or teams over time would increase the sample size and perhaps give more insights). At least it is contemporary. The following Wikipedia page lists the squad members of each team and indicates the captain of the squad. In addition, information on their position, age and number of caps is also given. Of the 20 Captains at the Rugby World Cup, 10 are positioned in the Back Row (Numbers 6, 7 and 8), 3 at Hooker (Number 2), 3 at Centre (Numbers 12 and 13) and 1 each at Lock (Numbers 4 and 5), Fly Half (Number 10), Wing (Numbers 11 and 14) and Full Back (Number 15)
 
One should be careful with these numbers however as the back row position covers three personnel while the centre covers two and the hooker just one. To adjust for this, we calculate a ratio of the number of captains per players in that position in the squad listed at the Rugby World Cup. The table below presents the figures and shows that even when adjusting for the number of players, the Back row is still the most popular position for a captain in the current Rugby World Cup.

​The obvious question now is why. An initial reaction might be to say that players in the back row positions touch the ball or are involved in the majority of plays during a game but if that is the case, why are scrum-half’s or fly-half’s not captains more frequently? One thing that we can test using our data is the influence of experience in the form of both the number of caps and age. The table below presents the average age and average number of caps by position. Interestingly no obvious pattern appears to be present with the Back row/Flanker/Number 8 position being one of the lowest rather than one of the highest in both categories. 

A more sophisticated analysis is perhaps required. The final table present results from two logit regressions which seek to explain the factors which significantly determine the odds of being a captain or not (the dependent variable is a 1, 0 dummy variable). In the first regression we include dummy variables to represent each position on a rugby team. Because some positions are never captains and are perfectly collinear with the dependent variable we ‘lose’ some observations in this specification. The second regression codes the positions as simply forwards (Hooker/Prop/Lock/Back row) and backs (Scrum Half/Fly Half/Centre/Wing/Full Back) in order to circumvent this problem. As can be seen in both regressions, the number of caps is a significant predictor (significant at the 1% level) of the odds of being a captain while position and age are insignificant. In simple terms, once you control for the number of caps, the position on a rugby team doesn’t actually matter in determining the odds of being a captain or not. With a further calculation based on the coefficient estimates, it can be estimated that an extra cap will increase the odds of being a captain by approximately 4.8%.

By David Butler

Teemu Pukki has taken the Premier League by storm, winning player of the month for September. Currently he has scored a 6 in 6 matches. This is rare for a promoted striker.

Previously I've looked at GTG ratio's and how they adjust for top scorers for promoted clubs. In the Championship these top scorers typically get 1 goal in every 2 games. On promotion to the Premier League they naturally find it more challenging, on average scoring one goal every five games.

Pukki bucks the trend. Whiie his championship goal scoring was relatively good (0.67) and was only surpassed by the likes of Pierre van Hooijdonk, Glenn Murray and Kevin Phillips, Pukki would still do well to come close to his Championship form.

Andy Carroll was the only promoted striker to maintain his GTG ratio on promotion. This ratio was only 0.45 however. The most impressive is Kevin Phillips who held a championship GTG ratio of 0.76 which only fell by 0.04 upon promotion.

The Finn has a long way to go to match up to Phillips but is definitely on track.

By Robbie Butler

Next year, Club Internacional de Fútbol Miami, more commonly known as Inter Miami will join Major League Soccer (MLS) and become the 26th active franchise in North America. The arrival of the Florida based team is well flagged, even within European circles, as it is linked to the 2007 contract that David Beckham signed when agreeing to play for LA Galaxy. MLS is different to European leagues in regards to many aspects, and here is yet another example.

The goal of most sports franchise owners in North America is to maximise profit. While this is advantageous in European leagues, clubs are more often regarded as 'win maximers'. The reason North American sports can focus on profit (as well as winning) is helped by the behaviour of franchise owners, who often manage or directly influence the leagues they compete it. Acting as a monopsony, owners behave in a manner that reduces the power of other stakeholders. e.g. players.

One way this can occurs is through league expansion. Creating a new franchise is no easy task. As North American leagues generally don't facilitate promotion and relegation, successful entry to a league means 'permanent' status. Such entry is then only permitted with the payment of a sizable fee, and full agreement of the current league members.

For evidence of league expansions one need only look at US soccer. By 2022, the MLS should reach 28 franchises. Inter Miami will be joined by Nashville SC next year, Austin FC (2021) and St. Louis (2022). 28 is a good number and a far cry from the original 10-team MLS that started in 1996. However, as the image below shows, it hasn't been all plain sailing.

​Since the league was inaugurated in 1996, three franchises have gone out of business. Worryingly for Backham and Co., two of these were based in Florida (Tampa Bay and Miami).

The most recent bankruptcy was Chivas USA, which left the MLS in 2014. Sale of the franchise to a group of businessmen, including Cardiff owner Vincent Tan, resulted in the emergence of Los Angeles FC in 2017.

This brings the number of major franchises in LA to 10! (NFL - Rams and Chargers; MLB Dodgers and Angels; NBA - Lakers and Clippers; NHL -Kings and Ducks; MLS - Galaxy). Only New York (11) has more.

One can only guess as to how much more the MLS will expand, but it would seem that 30 to 32 franchises may be the target. This would then put the sport in line with MLB, NBA or NFL. In fact, the current franchise map is starting to look very like the other major sports.

On the left, the current locations of the MLS sit reasonably well with the locations of NFL franchises. The return of a second MLS franchise to Florida would appear to make sense. As does the arrival of the first franchises in Missouri and Tennesse. 

The decision to create a 3rd franchise in Texas is a little less obvious but a first for the MLS. No other state will have 3 MLS teams. In fact, the only example of  major US sport with the three NHL franchises in the same city is that of New York - New York Rangers, New York Islanders and Buffalo Sabres.