Friday, October 02, 2009
UEFA's Definition of "Fair Play"
ESPN Soccernet recently reported UEFA's passage of a new "financial fair play" standard to go in effect in 2013. Stefan Symanski raised the alert back in 2006 and wondered about enforceability -- a topic I'll leave to him. In Eurocrat-speak, "fair play" means that a club cannot spend more on transfers or wages than their earn in soccer-related revenue defined as
Not surprisingly, the real impetus for these restrictions arises from competitors. A January Soccernet story explicitly names (not surprisingly) the European Club Association (an association of top clubs) as the instigators of this policy in view of recent foreign owner influx, and, in particular, the moves at Manchester City. In effect, clubs like Man U and AC Milan are saying, "Hey, are cartel is big enough, no new members welcome."
Why no huge outrage among lower tier clubs? My guess is that such a rule is a lot like imposing low-flow toilet rules, very few people are impacted in any given time period. Most mid-table and lower clubs are not expecting a foreign ownership takeover anytime soon. On the other hand, they fear that now a formerly beatable club, like Man City, will move up into the unbeatable zone and make the struggle against relegation that much harder, so that they, at least silently, sign on to the big clubs' proposal, even though it helps keep the big club "club" smaller.
money received only from ticket sales, sponsorship, merchandise and television income. It would not include any financial investment by owners or major shareholders.UEFA President Michael Platini explained
"We don't want to kill or hurt the clubs, on the contrary we want to help them in the market"Eurocrats are a lot like NCAA-crats -- they don't even flinch when offering explanations and rhetoric that are total baloney. The new standard permits owners to use their own money on some other inputs -- stadiums, youth systems -- but not on current labor inputs. So, while the effect shares something in common with a salary cap by limiting owner salary expenditures, it entrenches the status quo for wealthy clubs in a way that a salary cap does not.
Not surprisingly, the real impetus for these restrictions arises from competitors. A January Soccernet story explicitly names (not surprisingly) the European Club Association (an association of top clubs) as the instigators of this policy in view of recent foreign owner influx, and, in particular, the moves at Manchester City. In effect, clubs like Man U and AC Milan are saying, "Hey, are cartel is big enough, no new members welcome."
Why no huge outrage among lower tier clubs? My guess is that such a rule is a lot like imposing low-flow toilet rules, very few people are impacted in any given time period. Most mid-table and lower clubs are not expecting a foreign ownership takeover anytime soon. On the other hand, they fear that now a formerly beatable club, like Man City, will move up into the unbeatable zone and make the struggle against relegation that much harder, so that they, at least silently, sign on to the big clubs' proposal, even though it helps keep the big club "club" smaller.
Labels: soccer; uefa; salaries
Thursday, October 01, 2009
Kansas City's Sprint Center Still has No Permanent Major Leauge Sports Tenant, And That's No Big Deal
The Sprint Center in Kansas City was opened in 2007 to much fanfare. A gorgeous facility built in a struggling downtown area, one of the hopes was that the Sprint Center would attract and NHL and/or an NBA team. Neither has yet happened, but according to the Kansas City Star, that's no big deal.
Kansas City is expected to cash in on a rocking year of concerts and events at the Sprint Center to the tune of $1.8 million.
The surprise boost comes from a profit-sharing section in the development agreement between the city and the arena’s operator, Anschutz Entertainment Group.
The surprise boost comes from a profit-sharing section in the development agreement between the city and the arena’s operator, Anschutz Entertainment Group.
Here's an interesting bit regarding sports at the arena
Any professional team would likely demand big chunks of the facility’s revenues from luxury suites, concessions and sponsorships. That would cut the arena’s ultimate profits.
“The economic model of this building is quite successful,” said Leiweke, who was in town for a preseason NHL match Tuesday night between the Los Angeles Kings, owned by AEG, and the New York Islanders.
“The last thing we or the city want to do is throw away that model and make the arena a loss leader with another tenant,” he said.
“It’s a tougher scenario with a professional team,” he added. If there were a team there now, “I’m sure we wouldn’t be able to write a check to the city for $1.8 million.”
While landing a professional sports team as an anchor for the arena remains the ultimate goal for AEG, Leiweke said the presence of a team also could diminish its popularity as a concert venue. Now, the arena has an abundance of options to offer concert promoters.
This is not good news to any proponent of public funds for sports stadiums. It also affirms the notion that using public funds to generate a positive city-wide economic boost does little good. The economic impact that comes from sports in a stadium flows mainly to fans and to owners, leaving little or no externalities.
Cross-Posted at Market Power
Labels: economic impact
Judge Rejects Jim Balsillie's Offer for the Pheonix Coyotes, Reaffirms Single Entity Status in Franchise Location Decisions
Judge Redfield Baum has rejected Jim Balsillie's offer to buy the Phoenix Coyotes. The NHL was adamantly against Balsillie's offer because of his desire to abandon the Phoenix market and move the Coyotes up to Hamilton, Ontario. Not only would that put an NHL team in a smaller media market, but it would also move a team within 60 miles, more or less, of two existing NHL franchises, the Buffalo Sabres and the Toronto Maple Leafs.
Judge Redfield T. Baum rejected outright Balsillie's offer to purchase the team and move it to Hamilton, Ontario, which the NHL had vehemently opposed. The judge upheld the league's right to decide who owns its teams and where they play.
As noted above, it's not a complete victory for the NHL because its offer was also rejected. But Judge Baum did affirm that the NHL can be treated as a single-entity when it comes to franchise locations. That's a huge victory for the NHL. I'm not sure the same can be said of the average hockey fan.
Cross-posted at Market Power
Labels: exclusive territories, nhl, Phoenix Coyotes, single entity
Playing for the love of the Game
I heard recently about the compensation scheme to be used by the United Football League. I haven't seen any posts on this topic, so excuse me if this duplicates earlier discussion.
Players in the UFL will have a base compensation of $35,000, except for kickers and long snappers whose base is $25,000. A July posting at UFL Access says that the base pay for players is $35k, except for kickers and long snappers for whom it is $25K, and that quarterbacks will get $10k per game.
Players on the championship team get a bonus of $5k; players on the losing team in the championship game get a bonus of $2.5k.
The player contract stipulates that players cannot try out for NFL teams until after the UFL season is over. The championship game is November 27th, so not much of the NFL season will remain. In other words, if a player is using the UFL as an audition for the NFL, it is one which will most likely only payoff in the following NFL season, not the current one.
A player agent noted that many former NFL players had considered the UFL, when they thought compensation would be $100k, but many of those players decided it was not worth it for $35k. Some of the players clearly don't love to play the game THAT much.
The UFL marketing slogan is "Where future stars come to play". The question is do they mean future NFL stars who get their big break to join an NFL squad or do they really believe the league will be far more successful than previous competitors to the NFL. My money is on the former.
Players in the UFL will have a base compensation of $35,000, except for kickers and long snappers whose base is $25,000. A July posting at UFL Access says that the base pay for players is $35k, except for kickers and long snappers for whom it is $25K, and that quarterbacks will get $10k per game.
Players on the championship team get a bonus of $5k; players on the losing team in the championship game get a bonus of $2.5k.
The player contract stipulates that players cannot try out for NFL teams until after the UFL season is over. The championship game is November 27th, so not much of the NFL season will remain. In other words, if a player is using the UFL as an audition for the NFL, it is one which will most likely only payoff in the following NFL season, not the current one.
A player agent noted that many former NFL players had considered the UFL, when they thought compensation would be $100k, but many of those players decided it was not worth it for $35k. Some of the players clearly don't love to play the game THAT much.
The UFL marketing slogan is "Where future stars come to play". The question is do they mean future NFL stars who get their big break to join an NFL squad or do they really believe the league will be far more successful than previous competitors to the NFL. My money is on the former.
Wednesday, September 30, 2009
Arena Bailouts
In Pittsburgh:
Add $5 million to the money Pennsylvania is giving toward Pittsburgh's pricey Uptown hockey arena.In Jacksonville:
This time, it isn't site acquisition or construction cost overruns, but a shortfall that occurred when interest on variable rate bonds soared last fall after credit agencies downgraded the bond's insurer, Financial Security Assurance Inc.
That left the city-county Sports & Exhibition Authority, which is building Consol Energy Center, with an extra $5.08 million bill and no money to pay it.
The state, which agreed to give about $40 million in Redevelopment Assistance Capital Budget grants to cover site acquisition and extra construction costs for the $325 million arena, will tap a different account for this bailout. Gov. Ed Rendell's proposed budget would appropriate $5.08 million from the Pennsylvania Gaming Economic Development and Tourism Fund for the bond bailout.
The bailout has generated little public discussion. It was buried in Rendell's proposed 2009-10 budget, with little to indicate the money would pay for arena bond shortfalls.
As speculation over a possible Jacksonville Jaguars exit builds, the city has identified about $5 million a year that can be used to pay for needed maintenance at the Sports Complex — primarily Jacksonville Municipal Stadium.Five million a year may seem like small potatoes, but I keep reading that state and local budgets are in shambles. And the details in these stories suggest that taxpayers may well be on the hook for additional liabilities in the future.
City Council President Richard Clark said Tuesday evening he’s planning on introducing a bill that will redirect bed tax money now going to the Prime Osborn Convention Center to the city’s three major sports and entertainment venues.
With the convention center debt scheduled to be paid off in October, Clark will propose that the money going to the Prime Osborn instead go to the Baseball Grounds of Jacksonville, Veterans Memorial Arena and the stadium, home of the Jacksonville Jaguars.
“The Jaguars are an enormous economic driver in this city, and we owe it to them as much as we owe it to the taxpayers who own the stadium,” Clark said.
Every Jacksonville hotel bill generates six cents on the dollar for three funds: two cents go to the Sports Complex; two cents go to the Tourist Development Council; and the rest goes to the convention center.
Labels: stadium subsidies
Tuesday, September 29, 2009
NBA Locks Out Referees
Labor relations in professional sports are notoriously contentious. Nobody gets along. Players strike, owners lock out players, referees strike, owners lock out referees; it happens all the time. Labor disputes in professional sports almost always revolve around the periodic renewal of collective bargaining agreements (CBAs) - contracts between leagues and unionized employees that specify all the details of the employer-employee relationship - that usually last five years or so.
The latest chapter in this sad saga pits the NBA against referees. Negotiations between the NBA and the National Basketball Referees association (NBRA), the union that represents NBA referees, broke down last week and appear to be stalled. The points of contention are the usual suspects: wages, travel benefits, and retirement benefits. The NBA wants to scale back pension benefits and keep wages flat over the life of the CBA, citing the effects of the recession on revenues. The refs want this CBA to run only two years, instead of the usual five, so that they can re-negotiate in an improved future economic climate, and, of course, want wage increases.
One unusual feature of this labor dispute is that the NBA has released information about their offer to the press, probably in an attempt to force the NBRA to settle. These details are seldom made public, an the NBRA is crying foul (sorry, I couldn't resist). The NBA claimed that entry level referees make $150,000 and experienced referees make upward of $550,000. The union claims that entry level salaries are $91,000 and experienced referees make less than $400,000. The severance package paid to retiring referees, reported to be $575,000 by the NBA, is also under negotiation and a matter of dispute.
The NBA will open the season with non-union referees, drawn from the WNBA, the NBA development league, and other places. The same thing happened in 1995, the last time the NBA and the NBRA couldn't agree on a new CBA. Because reasonable substitutes for NBA referees exist (it doesn't take a highly trained expert to let NBA stars get away with walking and palming the ball), it seems unlikely that the NBRA can hold out for too long. Referees don't have as much bargaining power as players in labor negotiations.
The latest chapter in this sad saga pits the NBA against referees. Negotiations between the NBA and the National Basketball Referees association (NBRA), the union that represents NBA referees, broke down last week and appear to be stalled. The points of contention are the usual suspects: wages, travel benefits, and retirement benefits. The NBA wants to scale back pension benefits and keep wages flat over the life of the CBA, citing the effects of the recession on revenues. The refs want this CBA to run only two years, instead of the usual five, so that they can re-negotiate in an improved future economic climate, and, of course, want wage increases.
One unusual feature of this labor dispute is that the NBA has released information about their offer to the press, probably in an attempt to force the NBRA to settle. These details are seldom made public, an the NBRA is crying foul (sorry, I couldn't resist). The NBA claimed that entry level referees make $150,000 and experienced referees make upward of $550,000. The union claims that entry level salaries are $91,000 and experienced referees make less than $400,000. The severance package paid to retiring referees, reported to be $575,000 by the NBA, is also under negotiation and a matter of dispute.
The NBA will open the season with non-union referees, drawn from the WNBA, the NBA development league, and other places. The same thing happened in 1995, the last time the NBA and the NBRA couldn't agree on a new CBA. Because reasonable substitutes for NBA referees exist (it doesn't take a highly trained expert to let NBA stars get away with walking and palming the ball), it seems unlikely that the NBRA can hold out for too long. Referees don't have as much bargaining power as players in labor negotiations.
Friday, September 25, 2009
Sports Economists Weigh in on American Needle v. NFL
Earlier this week I described the American Needle v. NFL case that will soon be argued before the Supreme Court. The most recent filing in the case is an amicus curiae brief filed by a group of sports economists (including TSE co-bloggers Berri, Coates, Fort, Szymanski and yours truly). The brief rebuts many of the arguments made by the NFL, and points out in detail exactly how a ruling in favor of the NFL will result in a loss of consumer welfare. Roger Noll was the driving force behind the brief. From the introduction:
Our principal conclusion is that economic research provides a clear basis for distinguishing between collaborative activities among members of a league that enhance economic efficiency and benefit consumers from collusive activities that are not essential for the efficient operation of a league and that benefit league members by reducing competition among teams. We believe that a ruling that anyRoger Noll was the driving force behind the brief. Here is a link to the brief.
sports league is a single entity in which teams cannot engage in anticompetitive collaboration in “core venture functions” is inconsistent with the consensus among economists about the efficient scope of league authority and the nature of competition in professional sports.
As citizens and professional economists, we have a substantial interest in fostering the appropriate use of economics in antitrust and in assuring that the economic assumptions that guide decisions in antitrust litigation do not conflict with the consensus from economics research both generally and with respect to professional team sports. The NFL Respondents highlight our interest in this matter by referring to their preferred approach to the single entity concept as “a more nuanced, economics-based approach.”
Tuesday, September 22, 2009
From Gimmick to Mainstream
During the Colts-Dolphins Monday night telecast, the TV crew's conversation turned to Miami's "Wildcat" formation -- the direct snap to a running back playing QB. The production team put up 2008 data (Dolphin data, I think, maybe NFL) showing a 2% yardage advantage of the Wildcat versus more typical formations. The booth personnel wondered whether this was enough to justify its use. Ron Jaworski went a step further, making clear that he doesn't much like the formation and finishing with
While I generally like Jaworksi and the find the current MNF crew generally informative, the negative views suffer from a couple of problems:
1. The small yardage advantage of the Wildcat is evidence of effective management, not, as the booth supposed, scant evidence of a positive effect for the Wildcat formation. Basic economics recognizes that efficient management implies using an alternative input or technology up to the point that it's expected benefit matches the alternatives. If the Wildcat had a 10% yardage advantage, then Miami should use it more. The 2% figure suggests that they are using it in about the right measure.
2. Evaluating the difference in "gimmick" and successful innovation requires tests and time. Most "standard practices" of today started as a what could be described as a "gimmick, gadget, or trick (GGT)" that proved successful over the long term. The GGT designation has more to do with the stage of dispersion and acceptance of the practice. When Tom Landry re-deployed the "shotgun" formation in the 1970s, it might have been described as a gimmick or trick. Within two decades, most every team used it some. The same is true of 3 or 4 wide receivers, one running back, motion, no-huddle, not to mention defensive innovation.
"gimmicks, gadgets, and tricks just don't work in the NFL, at least not over the long run."I've heard similar criticisms by other analysts -- former Ravens Coach Brian Billick the week before offered similar comments during the Vikings-Browns game.
While I generally like Jaworksi and the find the current MNF crew generally informative, the negative views suffer from a couple of problems:
1. The small yardage advantage of the Wildcat is evidence of effective management, not, as the booth supposed, scant evidence of a positive effect for the Wildcat formation. Basic economics recognizes that efficient management implies using an alternative input or technology up to the point that it's expected benefit matches the alternatives. If the Wildcat had a 10% yardage advantage, then Miami should use it more. The 2% figure suggests that they are using it in about the right measure.
2. Evaluating the difference in "gimmick" and successful innovation requires tests and time. Most "standard practices" of today started as a what could be described as a "gimmick, gadget, or trick (GGT)" that proved successful over the long term. The GGT designation has more to do with the stage of dispersion and acceptance of the practice. When Tom Landry re-deployed the "shotgun" formation in the 1970s, it might have been described as a gimmick or trick. Within two decades, most every team used it some. The same is true of 3 or 4 wide receivers, one running back, motion, no-huddle, not to mention defensive innovation.
Labels: NFL; innovation
Monday, September 21, 2009
A Gathering Storm?
A case currently before the US Supreme Court could have a huge impact on professional sports and sports fans in North America. The case, American Needle v. NFL, started out as an innocuous antitrust case. American Needle is an apparel manufacturer that some NFL teams contracted with to produce hats, t-shirts and jerseys. In 2000, the NFL signed an exclusive contract with Reebok to provide apparel to all 32 NFL teams. American Needle sued the NFL, all the NFL teams, and Reebok for restraint of trade, and lost. Appeals ensued.
What was once a relatively minor anti-trust case has somehow made its way to the US Supreme Court. The issue before the Supreme Court is no longer a piddly restraint of trade case about who has the rights to manufacture NFL licensed merchandise. The Supreme Court will instead rule on whether or not the NFL can be considered a "single entity" in all its business functions. If the Court finds that the NFL constitutes a "single entity," the NFL would have a blanket antitrust exemption, in all cases except where the NFL would collude with other sports leagues to fix prices. Such an exemption would have consequences in input markets, affecting players and coaches, and output markets, affecting television broadcasts. It would also increase the power of the NFL and other sports leagues to extract subsidies from taxpayers for facility construction and operation. It could also affect other North American leagues - the NBA and NHL have both filed Amicus Curiae briefs. The Supreme Court will rule on this case in the upcoming 2099-2010 session.
For those interested in learning more about the case, I have set up a resource page with links to relevant filings, like the NBA and NHL briefs, and other information like blog posts. I will keep this page up to date as more information becomes available.
What was once a relatively minor anti-trust case has somehow made its way to the US Supreme Court. The issue before the Supreme Court is no longer a piddly restraint of trade case about who has the rights to manufacture NFL licensed merchandise. The Supreme Court will instead rule on whether or not the NFL can be considered a "single entity" in all its business functions. If the Court finds that the NFL constitutes a "single entity," the NFL would have a blanket antitrust exemption, in all cases except where the NFL would collude with other sports leagues to fix prices. Such an exemption would have consequences in input markets, affecting players and coaches, and output markets, affecting television broadcasts. It would also increase the power of the NFL and other sports leagues to extract subsidies from taxpayers for facility construction and operation. It could also affect other North American leagues - the NBA and NHL have both filed Amicus Curiae briefs. The Supreme Court will rule on this case in the upcoming 2099-2010 session.
For those interested in learning more about the case, I have set up a resource page with links to relevant filings, like the NBA and NHL briefs, and other information like blog posts. I will keep this page up to date as more information becomes available.
Economics of injuries
Interesting piece at FT.com on economic analysis of injuries. Co-blogger Stefan argues that progress may be associated with information sharing, a practice made easier when a national sporting organization is powerful -- e.g. rugby and cricket, rather than soccer. I found the following particularly interesting:
The process begins with information-gathering. For seven years, the R[ugby] FU has been logging every injury in the professional game in an effort to gather enough data to identify trends reliably. The England and Wales Cricket Board and the English Institute of Sport, which looks after Olympians, now have similar rolling audits, although they are at an earlier stage of development.My hunch is that the big EPL clubs know this, but keep their information private.
The numbers are already being crunched – and proving useful in planning which treatments might best serve not just the player, but the team. A recent study of hamstring injuries found that every new hamstring injury costs the team an average of 14 playing days; an average recurrence costs 25 days. Furthermore, almost all the recurrences took place during matches in the first month after return, and after an hour of play. It quickly became clear that players who had sustained hamstring injuries should be replaced after an hour during their first few games back. Moreover, the two clearest risk factors for hamstring injury were age and a previous injury, and players who performed specific strengthening exercises reduced the incidence, severity and recurrence of hamstring injuries.
Labels: statistical innovation
Wednesday, September 16, 2009
A good deal gone bad?
A Minneapolis developer signed an agreement a few years back to build and operate the Sears Centre Arena in Hoffman Estates, Ill., a suburb of Chicago. The city provided "about $55 million in bonds" to finance the project. Here are some of the facts, as reported in the Minneapolis Business Journal:
An interesting project for an undergrad or masters student might be to look into the financing agreements that were put in place in 2005, prior to the opening of the arena, and the politics of how this was sold to the community.
Here's another piece from last month, which suggests the tendency to overstate when selling public projects was at work:
**Update: some did, from the outset (see here, near the end).
Thanks to James Blakey for the link!
Under the development agreement, MadKatStep was required to repay the bonds and interest at a rate of about $3.9 million a year over a period of 26 years. Ryan, which built the arena and holds a majority stake in MadKatStep, guaranteed the first four years and has made all of the necessary payments...That's a pretty big operating loss. The arena's construction costs are sunk, so someone might be able to make a go of it when the economy gets better. The report notes that city is negotiating with AEG and others to take over operations of the arena, but how far they can wiggle off the financial hook remains to be seen.
Hoffman Estates officials said the sides remain far apart. MadKatStep wants the city to take on about $7 million in loan obligations and operating debt, in addition to the roughly $89 million in bond payments remaining over the next 22 years, they said...
Since opening in October 2006, Sears Centre has fallen short of financial projections and failed to turn a profit. It had an operating loss of $512,635 in 2008.
The arena hosted 84 events last year, including eight concerts. A 2005 feasibility study projected the facility would host 140 events a year, about 20 of which would be concerts.
The venue has two small anchor tenants: the Continental Indoor Football League’s Chicago Slaughter and the Lingerie Football League’s Chicago Bliss. It used to be home to minor league hockey, indoor lacrosse and indoor soccer, but those teams have since folded.
An interesting project for an undergrad or masters student might be to look into the financing agreements that were put in place in 2005, prior to the opening of the arena, and the politics of how this was sold to the community.
Here's another piece from last month, which suggests the tendency to overstate when selling public projects was at work:
[A]n official from the firm brought in to operate the arena on an interim basis after MadKatStep leaves says the Ryan Companies inflated the 11,000-seat venue's moneymaking potential when it convinced the village to give it a $55 million construction loan.40% off, eh? If I were a taxpayer in Hoffman Estates, I might be asking questions of my elected officials.** The stories in the press suggest that they're putting the blame on the developer, but it takes two parties to sign an agreement.
"I think they were caught up in the (potential) success of the arena," said Joseph Briglia, vice president for International Facilities Group.
But Smith noted the projections from 2005 were based on two reports, one commissioned by Ryan and the other by the village.
He acknowledged those studies "were wrong."
A feasibility called for the Sears Centre to book 140 dates per year. But it's averaged less than 100 annually.
**Update: some did, from the outset (see here, near the end).
Thanks to James Blakey for the link!
Labels: finance, stadium subsidies, stadiums
Tuesday, September 15, 2009
Putting a price on "announced attendance"
This is dated, but interesting. Back in the 2005-06 season, the San Diego Gulls, a minor league hockey team (ECHL), reported an average attendance of 5,841 for its regular season games. The Gulls made the post-season, and had two home playoff games. The Gulls announced attendance for these two games was 2,003 and 2,690, less than half the regular season average. What gives? Mark Ziegler provides this answer:
Ziegler also lists league policies for announcing attendance. There's a good bit of variation across the sports.
Thanks to student Wil Kirwan for the link!
During the regular season, teams are allowed to announce tickets distributed, often ballooning attendance figures 40 or 50 percent above the turnstile counts. In the playoffs, the league adds a surcharge to each ticket – this year it was $1.50 – to cover postseason expenses as well as a player bonus pool. You are allowed 50 comp tickets. Anything else is up to an individual team, with the proviso that it pays $1.50 per ticket. So if a team announces 5,000 in the playoffs when 2,000 are in the house, does it pay the surcharge on 5,000 tickets? “You bet,” ECHL Commissioner Brian McKenna says. “What is announced in the playoffs is very close to the actual number in the building.”Apparently, "tickets distributed" is a euphemism for dropping off blocks of 50 or 100 tickets to local shops, civic groups, and the like. This pumps up the announced attendance and might make the team look more popular than it really is. When you put a price on it (however unintentionally), announced attendance plummets.
Ziegler also lists league policies for announcing attendance. There's a good bit of variation across the sports.
Thanks to student Wil Kirwan for the link!
Labels: attendance, marketing
Wednesday, September 09, 2009
Sports stimulus?
Here's a report from McHenry County, Illinois, on plans to apply for Federal Stimulus funding to support construction of a minor league ballpark. The county has received authority to issue $27.5m in bonds to fund "private" projects. Equity One Sports Development is applying for $15 million of the bonds, with the owner declaring that, indeed "this is a totally private project." (He would appear to be addressing the issue of whether direct public subsidy is involved, apart from the financing). Here are the essential details of the financing subsidy:
McHenry County received the bonding authority under the $789 billion American Reinvestment and Recovery Act. The bonds are supposed to encourage lending by giving investors a 45 percent refund of the federal taxes payable on them. Because the bonds are federally backed, the county is not liable if the borrower defaults.The project qualifies as "shovel-ready," in the sense that the owner is ready to begin construction in March 2010, because it was part of a proposal for a "Health, Wellness and Athletics" complex at the local community college a few years back. That proposal was rejected, probably because local taxpayers would have been on the hook if revenues were not sufficient to pay off the bonds. If I'm not mistaken, then thanks to the American Reinvestment and Recovery Act, a project which was not deemed worth the risk by the locals who would benefit, may yet be built simply because the default risk has been shifted from local taxpayers to yours truly, a non-local, Federal taxpayer. Sports stimulus, humbug!! As Ray Keating might say, it's more like sports pork.
Labels: sports pork, stadium subsidies, taxes
Friday, September 04, 2009
As the Vertically Integrated World Turns Part II: Versus Network
Two years ago, I posted on the ongoing battle between "Big Cable" and the NFL Network (NFL's Game of Chicken). In that case, the NFL's effort to move from a sports provider to a vertically integrated media outlet of its sports product setup the conflict with the next step in the supply chain -- the media packagers.
Now, two media packagers, DirectTV and Comcast, are deuling over the Comcast-owned Versus network -- home to NHL games, the Tour de France, and a variety of other sports. As of September 1, DirectTV dropped the network. In this case, Comcast is the vertically integrated firm not only serving as packager but also as upstream media source.
The "Puck Daddy" blog (via Yahoo Canada) provides a very thorough discussion of this dispute, drawing out the quite convoluted analytics -- negotiation strategies and posturing, intracompany marketing strategies, comparable or not-so-comparable deals with other packagers like Dish, and so on. One of the ironic features of this dispute vis-a-vis the NFL Network case is the role of the NHL. To date, it has stayed out, but as Puck Daddy notes
Now, two media packagers, DirectTV and Comcast, are deuling over the Comcast-owned Versus network -- home to NHL games, the Tour de France, and a variety of other sports. As of September 1, DirectTV dropped the network. In this case, Comcast is the vertically integrated firm not only serving as packager but also as upstream media source.
The "Puck Daddy" blog (via Yahoo Canada) provides a very thorough discussion of this dispute, drawing out the quite convoluted analytics -- negotiation strategies and posturing, intracompany marketing strategies, comparable or not-so-comparable deals with other packagers like Dish, and so on. One of the ironic features of this dispute vis-a-vis the NFL Network case is the role of the NHL. To date, it has stayed out, but as Puck Daddy notes
the NHL isn't stepping into this minefield until it needs to at the end of September. Even if we all know where their loyalties are; it's not exactly DirecTV who owns the Philadelphia Flyers ...That last tidbit highlights another twist in the tale -- Comcast owns the Flyers. This makes me think that PD may have misconstrued the NHL's role. While their loyalties may rest with the Flyers, so does their leverage.
Thursday, September 03, 2009
Out with the family!
What's up with the Carolina Panthers? Last February, owner Jerry Richardson was on the operating table, getting a heart transplant. Son Mark Richardson ran the team and son Jon managed the stadium. But on Tuesday came news that Dad was more than alive and kicking: he fired both his sons!
This was a bit of a shock -- it was front page news in Charlotte -- especially as Mark had a reputation as an effective and innovative team president. So what's going on? One hypothesis is that a family business structure is an anachronism when the business in question has a market value of a billion dollars. From that perspective, if Mark Richardson is as talented as many perceive him to be, he should have no trouble finding a position as CEO of another one billion dollar business. If he's not, then it is probably a sound business decision to replace him.
I would not be surprised if thinking like that is behind Jerry Richardson's decision to fire his son. I've always found him to be an interesting character, a maverick of sorts. I use one of his surprising decisions as an example in my class on sports economics. Jerry Richardson's career as an NFL player lasted but two years. He played tight end for the Baltimore Colts, during the Johnny Unitas era. Under the "reserve system" in effect at the time, Richardson was paid less than his true value, as were most all players. Having been successful though, he negotiated for a raise, but was turned down by Weeb Eubank. So he quit! In basic economic terms, he had a high opportunity cost of playing football during the low wage, reserve system of his time. If Jerry Richardson was going to be under-paid, he had better things to do. Like become a mega-millionaire.
This was a bit of a shock -- it was front page news in Charlotte -- especially as Mark had a reputation as an effective and innovative team president. So what's going on? One hypothesis is that a family business structure is an anachronism when the business in question has a market value of a billion dollars. From that perspective, if Mark Richardson is as talented as many perceive him to be, he should have no trouble finding a position as CEO of another one billion dollar business. If he's not, then it is probably a sound business decision to replace him.
I would not be surprised if thinking like that is behind Jerry Richardson's decision to fire his son. I've always found him to be an interesting character, a maverick of sorts. I use one of his surprising decisions as an example in my class on sports economics. Jerry Richardson's career as an NFL player lasted but two years. He played tight end for the Baltimore Colts, during the Johnny Unitas era. Under the "reserve system" in effect at the time, Richardson was paid less than his true value, as were most all players. Having been successful though, he negotiated for a raise, but was turned down by Weeb Eubank. So he quit! In basic economic terms, he had a high opportunity cost of playing football during the low wage, reserve system of his time. If Jerry Richardson was going to be under-paid, he had better things to do. Like become a mega-millionaire.
Wednesday, September 02, 2009
Coaches Vote Republican
Steve Kornacki did the research, reported today in the WSJ. Not on votes, exactly, but on contributions to Federal Election Campaigns in the 2008 cycle. Kornacki states that 20 coaches are listed as having donated to Republican campaigns, versus 3 to the Democrats -- a landslide for the GOP! Perhaps this is the counterpoint to the observation that college campuses are filled with liberal faculty. ;)
The explanations? Tom Osborne jokes that liberals would claim that coaches are Republicans because, as former players, "they got hit in the head too much." Lou Holtz -- who recently considered a run for office as a Republican -- goes for the rugged individualism line, ironically blended with a bit ofteam collective spirit....
The explanations? Tom Osborne jokes that liberals would claim that coaches are Republicans because, as former players, "they got hit in the head too much." Lou Holtz -- who recently considered a run for office as a Republican -- goes for the rugged individualism line, ironically blended with a bit of
"You aren't entitled to anything. You don't inherit anything. You get what you earn—your position on the team," Mr. Holtz said. "You're treated like everybody else. You're held accountable for your actions. You understand that your decisions affect other people on that team... There's winners, there's losers, and there's competitiveness."As usual, I'm not exactly sure what Lou said, but he does have the gift of the gab. My own stab at humor comes from former Arizona coach Dick Tomey, one of the three contributors to Democrats. It turns out that while at Arizona, Tomey decided that his staff would make an effort to .... get his players registered to vote. Say what? Tomey could perhaps have used a lesson in the economics of rational ignorance. With less attention on the part of his staff and players to politics (with a marginal impact of zero), and more time devoted to the passing game, Arizona might have won another game or two, and Tomey might have kept his job!
Monday, August 31, 2009
Mixed Grill
The Dallas Morning News reports that the Cowboys "stand to make as much as $4.2 million from the team's new Texas Lottery scratch-off tickets." In May, the NFL dropped a ban on team sponsorship of lotteries, and about half the teams are poised to capitalize this season.
I've puzzled over the NFL's motive in its recent lawsuit to stop Delaware from offering point spread wagers (so far successful, see Brad's post below). This news on the Texas Lottery strengthens my suspicion that the motive behind the Delaware suit is 100% pecuniary. How can they walk in to court with a straight face?
Looking ahead to the NFL and NBA seasons, here are two pieces on the challenge of selling tickets in the current economic environment. NFL teams with strong traditions like the Bears and Broncos (and one suspects, lengthy waiting lists for season tickets) will play before sellouts at home, as usual. But new wrinkles on promotions are being tried in Jacksonville, and across the NBA. The wackiest one: "In Philadelphia, the 76ers are running a Back 2 School promotion: four tickets to the home opener, two backpacks, two T-shirts and two hats for $75." Ay caramba! I'm sure the seats suck, but that's a lot of schwag!
Finally, on a different note, John Tamny has a piece at Forbes on the collapse in the baseball card market. Remember those card shops that sprang up in shopping malls 15 to 20 years ago? The failure rate was enormous: of "5,000 card shops in the early '90s, according to Sports Collector's Digest, there are only 500 now." Tamny points out that the card market was undone by entry: at the peak, "Fleer, Donruss, Score, Stadium Club and Upper Deck joined more established card company Topps in pursuit of large gains." What were once collectibles became commonplace. No matter what marketing spin the card companies could put on a Derek Jeter or Greg Jefferies card, ultimately the flood of cards undermined the essential element -- scarcity -- on which a market for collectibles is based. The card market might come back in a couple of decades, but I'm not betting on it.
I've puzzled over the NFL's motive in its recent lawsuit to stop Delaware from offering point spread wagers (so far successful, see Brad's post below). This news on the Texas Lottery strengthens my suspicion that the motive behind the Delaware suit is 100% pecuniary. How can they walk in to court with a straight face?
Looking ahead to the NFL and NBA seasons, here are two pieces on the challenge of selling tickets in the current economic environment. NFL teams with strong traditions like the Bears and Broncos (and one suspects, lengthy waiting lists for season tickets) will play before sellouts at home, as usual. But new wrinkles on promotions are being tried in Jacksonville, and across the NBA. The wackiest one: "In Philadelphia, the 76ers are running a Back 2 School promotion: four tickets to the home opener, two backpacks, two T-shirts and two hats for $75." Ay caramba! I'm sure the seats suck, but that's a lot of schwag!
Finally, on a different note, John Tamny has a piece at Forbes on the collapse in the baseball card market. Remember those card shops that sprang up in shopping malls 15 to 20 years ago? The failure rate was enormous: of "5,000 card shops in the early '90s, according to Sports Collector's Digest, there are only 500 now." Tamny points out that the card market was undone by entry: at the peak, "Fleer, Donruss, Score, Stadium Club and Upper Deck joined more established card company Topps in pursuit of large gains." What were once collectibles became commonplace. No matter what marketing spin the card companies could put on a Derek Jeter or Greg Jefferies card, ultimately the flood of cards undermined the essential element -- scarcity -- on which a market for collectibles is based. The card market might come back in a couple of decades, but I'm not betting on it.
Labels: gambling, NFL, sports and the economy
Monday, August 24, 2009
Hold Your Bets
A three judge federal appeals court ruled today that betting on individual football games in Delaware is illegal, according to an Associated Press report. The NFL and the NCAA filed for an injunction stopping Delaware from allowing bets on single games. But rather than rule on the injunction, the appeals court upheld the NFL/NCAA claim that allowing bets on individual games violated federal law.
At one point I thought I understood the legal aspects of sports betting in the US. I thought that the the Professional and Amateur Sports Protection Act (PASPA) of 1992 outlawed sports betting in all states except Nevada, Oregon, Montana, and Delaware. And I thought that those four states were grandfathered into legal sports betting because they had previously allowed some form of legalized sports betting. So much for my knowledge of the law. It's a good thing I'm an economist.
As an economist, I have trouble understanding the resistance to sports betting in the US. Watching sports and betting on sports are complementary activities. Sports betting is legal in the UK and the Premier League seems to function well in that environment. The NCAA's rabid anti-gambling stance arises because they continue to pay student-athletes a fraction of their marginal revenue product. As long as that continues, there will be incentives for NCAA student-athletes to shave points. Never mind that office pools contribute heavily to interest in the NCAA Men's Basketball Tournament, which happens to pay a lot of the bills at NCAA headquarters in Indianapolis. Kids, don't bet on sports. Bettin' on sports is baaaaaad, m-kay?
But the NFL caters to betting on one hand, and deplores it on the other hand. What's up with that? In the major North American sport leagues, the famous gambling scandals involve Tim Donaghy, Pete Rose, and the Chicago Black Sox. One is a certified numbskull, and the other two might not have happened if not for relatively low pay. Beyond that, what are the big gambling scandals in the pros? Paul Hornung and Alex Karras in the early 1960s? See my comment about low salaries.
At one point I thought I understood the legal aspects of sports betting in the US. I thought that the the Professional and Amateur Sports Protection Act (PASPA) of 1992 outlawed sports betting in all states except Nevada, Oregon, Montana, and Delaware. And I thought that those four states were grandfathered into legal sports betting because they had previously allowed some form of legalized sports betting. So much for my knowledge of the law. It's a good thing I'm an economist.
As an economist, I have trouble understanding the resistance to sports betting in the US. Watching sports and betting on sports are complementary activities. Sports betting is legal in the UK and the Premier League seems to function well in that environment. The NCAA's rabid anti-gambling stance arises because they continue to pay student-athletes a fraction of their marginal revenue product. As long as that continues, there will be incentives for NCAA student-athletes to shave points. Never mind that office pools contribute heavily to interest in the NCAA Men's Basketball Tournament, which happens to pay a lot of the bills at NCAA headquarters in Indianapolis. Kids, don't bet on sports. Bettin' on sports is baaaaaad, m-kay?
But the NFL caters to betting on one hand, and deplores it on the other hand. What's up with that? In the major North American sport leagues, the famous gambling scandals involve Tim Donaghy, Pete Rose, and the Chicago Black Sox. One is a certified numbskull, and the other two might not have happened if not for relatively low pay. Beyond that, what are the big gambling scandals in the pros? Paul Hornung and Alex Karras in the early 1960s? See my comment about low salaries.
Thursday, August 20, 2009
Slipping Through the Cracks - How NFL Teams Solve an Information Problem
Reed Albergotti at the Wall Street Journal writes about an information problem in the NFL and how it is imperfectly solved.
*Brown ended up offering Daniel a scholarship, but only after his main QB target, Ryan Perilloux, reneged on an oral commitment.
Nevertheless, at a time when other sports like baseball are paying more attention to how players have played rather than how they look, many analysts say the NFL is going in the other direction—focusing more on a player's raw build and athletic ability as measured by his performance in activities like the 40-yard dash, shuttle drill and bench press.
Jeffrey Nalley, an agent who represents both football and baseball players, says the problem is simple: As the NFL draft becomes a bigger event, NFL general managers who waste an all-important draft pick on a player who doesn't look like a comic book superhero can summon the wrath of millions.
"If you're going to take a guy in the first round, he'd better fit the height, weight and speed that they're looking for," Mr. Nalley says. "Honestly, they're covering their asses."
Reed gives a list of players who fit the "doesn't look like a comic book superhero" who have gone on and been important pieces on NFL teams.
The problem is this: who's going to be the best available player at position x and what do I have to give up to get him? It's a basic optimization-under-uncertainty problem - simple in formulating in theory, not necessarily solving in practice. You don't know who's going to be the best player over the next x seasons, but there are tangible things positively correlated with future productivity, namely height, weight, 40 yard dash times, and the look of the player's body.
Mr. Nalley, quoted in the article, says that teams are just "covering their asses" when they pick the specimens. That may be true at the margin, but my guess is that if you randomly picked 22 "comic book superheroes" and I randomly picked 22 comic book authors, your team would whup my team's ass in repeated games more often than not.
*Brown ended up offering Daniel a scholarship, but only after his main QB target, Ryan Perilloux, reneged on an oral commitment.
Labels: draft, NFL; decision making; statistics
Wednesday, August 19, 2009
The "Favre Effect"
The Favre effect is in full swing, and this short AP article gives some numbers to things I alluded to in my post below. The Vikes have sold 3,000 season ticket packs and about 10,000 single game tickets since the news broke yesterday. I just checked Vikings.com and was quoted a price of $741 as the price for the best available season tickets plus a $75 flat fee. Here's a couple of screen shots for those who might be interested.
If all season tickets were bought at this price, then the 3,000 sold would lead to $2,223,000 in additional season ticket revenue. The 10,000 single-game ticket sales, assuming a low-ball price of $40 per ticket gives an additional $400,000 in ticket revenue for a grand total of $2,623,000. Remember that the Vikes get to keep only 60% of this money, or $1,573,800 with the other 40% going to the visiting teams. Moreover, some of these tickets would have been bought even if Favre weren't going to play for the Vikes.
While this is a nice bump for the Vikes, they've got a long way to go to get the cash to pay his salary.
Labels: Brett Favre, MRP, NFL
Is Brett Favre Worth $25 million over 2 Years?
If you live in a hole or do not follow American sports whatsoever, then you may have missed the big news of the day: Brett Favre, formerly of the Green Bay Packers and formerly retired, unretired for the second time in the past two years. Not only did the former Face of Green Bay unretire, he unretired to join the Packers' hated rival, the Minnesota Vikings. At least last year he had the common decency to play in New York for the Jets when he unretired.
In Wisconsin, someone, somewhere is making a purple-wearing #4 Brett Favre doll and green and yellow push pins - with barbs that have barbs, probably rusty ones.
But I digress. Favre has reportedly signed a one year contract with a club-option for a second year that would pay him $25 million over the two years. Is he worth it?
In economics, the gross worth of a resource in a profit-maximizing world, depends on that resource's marginal contribution to revenue.
- Favre's signing won't impact league-wide media revenues, which are set by contract and account for somewhere around 60% or so of league-wide (and thus per-team) revenues. His signing should have little impact on local radio revenues for the Vikes as well.
- Favre should have a positive influence on ticket revenue earned by the Vikes this year and next. Keep in mind that ticket revenues are shared 60-40 between the home and visiting teams. The home team gets 60%.
- Favre is a star. Even if his marginal contribution to team wins is 0 over the next two years, he'll still have drawing power this year. If you go to vikings.com (at least as of today), you are greeted by a smiling Favre, not by a smiling Sage Rosenfels.
- Most NFL games are sellouts because of the blackout rule. Favre's signing should have little if any impact on attendance at Vikings games, home or away, per-se.
- Ticket prices are set before the season begins, so Favre's signing won't affect them this year.
- According to the Vikings website, as of this morning there were season tickets still available for Viking home games (see the picture above). Favre's signing should drive more of these sales. Teams like season ticket sales because they guarantee that a seat will be filled.
- Favre's signing should help the Vikings avoid any price discounting required to sell remaining tickets to games that would otherwise be blacked out.
- Likewise, when the Vikes travel, Favre's signing should help Vikes' opponents sell more tickets to their game against the Vikes at face value.
- If Favre is successful in leading the Vikes to the playoffs, Viking home ticket prices will be higher next year.
- If Favre is successful in helping lead the Vikings to the playoffs, season and single game ticket sales should be higher next year.
- Merchandising sales will be up for Vikes apparel. Merchandising revenue is shared equally among the teams, so while more Vikes apparel will be sold this year, the Vikes will only get 1/32nd of the revenue. Still, he'll drive more revenue into the Vikes' coffers although the amount will be relatively negligible.
- Luxury revenue is not subject to sharing in the NFL. The Vikings' luxury revenue situation is one of the worst in the NFL, and a big reason why they were dead last in overall revenue, according to the most recent data generated by Forbes. Even so, Favre's signing should help the sales of luxury tickets this year and, especially if the Vikes make the playoffs, next year.
So Favre is likely to generate more revenue for the Vikes. According to Forbes, the Vikings generated $195 million in revenue in 2008 from all sources combined. Did I mention that was dead last in the NFL? Yes, I did.
Anyways, if you take that $195 million figure as a spot-on estimate and if you hold all else equal for the 2009 season, the signing of Favre for $12.5 million per year tells you that the Vikes expect Favre to generate at least 6.4% more in revenue this year than if he did not sign (did I bother to mention the overall economy???). That seems a stretch for a 39 year-old injured QB, albeit a star.
Labels: Brett Favre, marginal revenue product, NFL
Baseball Beaning & Brawls
John Kruk and Eric Young provide a humorous analysis of the "right way to fight in baseball" following the Red Sox Kevin Youkilis charging of Detroit's Rick Porcello a week ago n ESPN MediaZone.
Beaning (which Porcello's pitch may not have been), on the other hand, does not amuse me. Baseball has long had the tradition of permitting even blatant hitting of batters and inevitable retaliation as "part of the game." In recent years, MLB rules have limited retaliation, but only rarely will umpires eject the initiator as happened this season to John Lackey of LAA. Defenders of this policy view self-enforcement mechanisms and incentives as sufficient with statements like "if you do let these things work out in small ways, it blows up into bigger things." Detractors, like myself, see vigilante justice that, while admittedly involving a degree of self-enforcing incentives, permits a lot of plunking of players with a dangerous weapon and blows up into bigger melees now and then.
Inter-league comparisons throw cold water on the "let them work it out" philosophy of baseball. In a high emotion and intensity game such as football, fights rarely occur and brawls practically never at the professional level. If operating by baseball's "code," a defensive lineman who thought an offensive player gained too much advantage in some way or pulled some dirty maneuver would simply raise up before the next snap and and kick the offensive lineman in the groin. Instead, the league punishes much less egregious behavior with personal fouls and would immediately eject and likely suspend any player engaging in such "settle the score" tactics. the Albert Haynesworth "stomping incident" is a case in point -- ejection, suspension, end of story with no need for the Cowboys to plot their "retaliation" against the Titans and no appearance of any thing of this sort of malfeasance across the league.
One reply might be that Haynesworth's actions left no doubt whereas pitches sometimes "get away." No doubt, no one can perfectly discriminate pitches that are intentionally thrown at batters from pitches thrown inside with no intent to hit anyone. Based on game situation (score, pitch count ...), game history, team histories, pitcher characteristics, and pitch characteristics, MLB players and umps (especially catchers and umps) can likely determine with at least 95 percent accuracy whether a pitch is intended to hit someone or be so far inside as to be equivalent to intending to hit the batter. I can tell with probably 85 percent accuracy watching at home.
The cultural differences that have developed in baseball and football extend beyond just the penalties. In baseball, not only were pitchers like Bob Gipson, Don Drysdale, and Nolan Ryan revered for their ability to get batters out, but a whole folklore of admiration developed around their willingness to throw at batters. Reggie White was a great defensive end, but no one would have thought him better for picking up a QB and dumping him on his head or punching some offensive tackle in the face. Hall of Famer or not, such behavior would diminish his stature. Can anyone imagine a punch to the face of a receiver who just caught a TD pass being acceptable behavior that's "just part of the game"?
Robin Ventura's farcical charge of Nolan Ryan resulting in Ryan's headlock on Ventura made me belly laugh along with everyone else. To my point, here, however, there's nothing funny about Ryan (one of my favorite players) hitting Ventura with a 95 mph fastball. Rather than the futile rush of the mound, Ventura might have called out Ryan -- why does a future Hall of Famer with the stuff that Ryan had find it necessary to throw at people? Why is this accepted behavior?
Beaning (which Porcello's pitch may not have been), on the other hand, does not amuse me. Baseball has long had the tradition of permitting even blatant hitting of batters and inevitable retaliation as "part of the game." In recent years, MLB rules have limited retaliation, but only rarely will umpires eject the initiator as happened this season to John Lackey of LAA. Defenders of this policy view self-enforcement mechanisms and incentives as sufficient with statements like "if you do let these things work out in small ways, it blows up into bigger things." Detractors, like myself, see vigilante justice that, while admittedly involving a degree of self-enforcing incentives, permits a lot of plunking of players with a dangerous weapon and blows up into bigger melees now and then.
Inter-league comparisons throw cold water on the "let them work it out" philosophy of baseball. In a high emotion and intensity game such as football, fights rarely occur and brawls practically never at the professional level. If operating by baseball's "code," a defensive lineman who thought an offensive player gained too much advantage in some way or pulled some dirty maneuver would simply raise up before the next snap and and kick the offensive lineman in the groin. Instead, the league punishes much less egregious behavior with personal fouls and would immediately eject and likely suspend any player engaging in such "settle the score" tactics. the Albert Haynesworth "stomping incident" is a case in point -- ejection, suspension, end of story with no need for the Cowboys to plot their "retaliation" against the Titans and no appearance of any thing of this sort of malfeasance across the league.
One reply might be that Haynesworth's actions left no doubt whereas pitches sometimes "get away." No doubt, no one can perfectly discriminate pitches that are intentionally thrown at batters from pitches thrown inside with no intent to hit anyone. Based on game situation (score, pitch count ...), game history, team histories, pitcher characteristics, and pitch characteristics, MLB players and umps (especially catchers and umps) can likely determine with at least 95 percent accuracy whether a pitch is intended to hit someone or be so far inside as to be equivalent to intending to hit the batter. I can tell with probably 85 percent accuracy watching at home.
The cultural differences that have developed in baseball and football extend beyond just the penalties. In baseball, not only were pitchers like Bob Gipson, Don Drysdale, and Nolan Ryan revered for their ability to get batters out, but a whole folklore of admiration developed around their willingness to throw at batters. Reggie White was a great defensive end, but no one would have thought him better for picking up a QB and dumping him on his head or punching some offensive tackle in the face. Hall of Famer or not, such behavior would diminish his stature. Can anyone imagine a punch to the face of a receiver who just caught a TD pass being acceptable behavior that's "just part of the game"?
Robin Ventura's farcical charge of Nolan Ryan resulting in Ryan's headlock on Ventura made me belly laugh along with everyone else. To my point, here, however, there's nothing funny about Ryan (one of my favorite players) hitting Ventura with a 95 mph fastball. Rather than the futile rush of the mound, Ventura might have called out Ryan -- why does a future Hall of Famer with the stuff that Ryan had find it necessary to throw at people? Why is this accepted behavior?
Tuesday, August 18, 2009
Nats Sign Strasburg, Set Record
The sad-sack Washington Nationals came to terms with #1 draft pick Stephen Strasburg one minute before their exclusive negotiation period ran out last night. His contract -- $15.6 million over four years -- exceeded the previous record ($10.5 million given to Mark Prior by the Cubs in 2001) by a wide margin, and was much larger than the $5.6 million deal Tampa Bay reached with 2007 #1 pick David Price and the $6.15 million deal the Devil Rays reached with 2008 #1 pick Tim Beckham. Strasburg's agent, Scott Boras, had floated $50 million as an expected value for the contract long ago. There were all sorts of wacky circumstances surrounding this negotiation, including the hype surrounding Strasburg ("the best pitching prospect in a generation"), Boras' reputation, and the fact that the Nats are beyond terrible and couldn't sign their last #1 pick, Aaron Crow.
Young pitchers are notoriously risky draft picks. Many get hurt and never reach the majors at all (see Taylor, Brien). Others can't dominate major league hitters like they did in high school or college (see McDonald, Ben - I saw that one up-close and personal while living in Baltimore). Prospects are risky assets for teams. Past performance indicates that the reward doesn't justify the risk. Only time will tell how this one will turn out for the Nats. I predict that it will not be a good signing, but I'm a known "pencil necked geek" in DC.
Young pitchers are notoriously risky draft picks. Many get hurt and never reach the majors at all (see Taylor, Brien). Others can't dominate major league hitters like they did in high school or college (see McDonald, Ben - I saw that one up-close and personal while living in Baltimore). Prospects are risky assets for teams. Past performance indicates that the reward doesn't justify the risk. Only time will tell how this one will turn out for the Nats. I predict that it will not be a good signing, but I'm a known "pencil necked geek" in DC.
Friday, August 14, 2009
MLB Postseason Ticket Pricing
I am spending the weekend in the NYC area, so the New York Times is my local paper for the next couple of days. I came across an interesting tidbit in the NY edition of the paper this morning.
With the Yankees playing well, Bombers fans are already anticipating October baseball this fall. The Yankees will soon be releasing their postseason ticket prices, and given their track record on pricing, people are anticipating an expensive postseason. Of course, the price elasticity of demand for postseason games is very low, so teams can raise their prices quite a bit. Yankees' fans clearly understand that:
With the Yankees playing well, Bombers fans are already anticipating October baseball this fall. The Yankees will soon be releasing their postseason ticket prices, and given their track record on pricing, people are anticipating an expensive postseason. Of course, the price elasticity of demand for postseason games is very low, so teams can raise their prices quite a bit. Yankees' fans clearly understand that:
“I don’t think they will raise prices too much because of the backlash they got on the regular- season tickets,” said Michael Bahn, a season-ticket holder since 2003. “The problem is, for the playoffs, they have you over a barrel and you really want to go.”For me, the interesting information in the article is that MLB sets guidelines (a price ceiling) for the first two rounds of postseason ticket prices. I'm no antitrust expert, but, absent the infamous MLB antitrust exemption (the gift that keeps on giving), that sounds like a per se violation of the Sherman Antitrust Act to me.
Labels: antitrust, MLB, ticket pricing
Thursday, August 13, 2009
A question on recreation
Casey Mulligan sends the following question to TSE readers. Registration of boats increased substantially between 1988-1998, consistent with increased wealth and demand for luxury goods. Since then, the number of registered vessels has been flat. Why? If you know the answer, or have a reasonable hypothesis, please leave it in the comments.
Labels: recreation
Monday, August 10, 2009
Football Season Begins!...well, not quite yet
Last week the Argentine Football Association delayed the start of the season because most of the clubs are bankrupt- they owe wages to the players and taxes to the government. The crisis was blamed on the European recession slowing the flow of transfer fees going to Argentine clubs. But similar problems exist in Europe- for all of Real Madrid 's exploits, the economist Angel Barajas has studied the finances of Spanish clubs and considers most of them insolvent; plenty of English clubs might struggle to pay wages and taxes this year too, and Italy was in crisis even before the recession. Expect to hear mounting demands for government bail-outs and tighter regulation. Really, it's just banking by another name.
Saturday, August 08, 2009
Football Season Begins!
No, not the NFL. Two European football leagues, the Bundesliga in Germany and Ligue 1 in France get started this weekend. In the Bundesliga, Wolfsburg came out in fine form to defend their championship by beating Stuttgart 2-0 last night. The English Premier League starts next weekend and Italy's Serie A on August 22. Spain's La Liga, with the refurbished, multi million euro nuevo Galacticos of Real Madrid begins play on August 30th.
Incidentially, my favorite European football team is Real Sporting de Gijon, a team from the north of Spain that is playing in La Liga for the second straight season. Sporting was in the relegation zone at halftime of the last game last season, but managed to win and avoid relegation. Why do I follow a team that just spent a decade playing in the second division in Spain? Simple - sports economist Placido Rodriguez of the University of Oviedo was the president of Sporting several years ago.
Incidentially, my favorite European football team is Real Sporting de Gijon, a team from the north of Spain that is playing in La Liga for the second straight season. Sporting was in the relegation zone at halftime of the last game last season, but managed to win and avoid relegation. Why do I follow a team that just spent a decade playing in the second division in Spain? Simple - sports economist Placido Rodriguez of the University of Oviedo was the president of Sporting several years ago.
Labels: European football, sports economists
Friday, August 07, 2009
NFL Draft Shenanigans
Entry drafts are used by all professional sports leagues in North America to allocate incoming talent to teams. They create monopsony power for teams because they assign the rights to drafted players to specific teams, denying these players the right to negotiate with any other team in the league. In the NBA, the collective bargaining agreement includes a rookie salary scale that removes all bargaining from the process: the player drafted in spot X in the first round gets $Y.
In the NFL, a drafted player and the team that drafted him must agree on a contract before the season starts. In this system, teams pay players based on expected marginal revenue product, not actual marginal revenue product, which generates information problems. The NFL solves this problem through an unofficial "slotting" system where compensation is roughly a decreasing function of draft order; the lower the draft position, the lower the salary. Wiggle room still exists in the NFL system, because teams and players still must negotiate a contract. The system gives little power to the player - holding out is his only effective bargaining chip.
Out in the Bay Area, the inscrutable Al Davis directed the Raiders to draft Maryland wide receiver Darrius Heyward-Bey with the#9 #7 pick in the last draft, allowing the 49ers to draft Texas Tech wide reveiver Michael Crabtree with the #10 pick. Under the informal NFL "slotting" system, Crabtree would be expected to earn less than Heyward-Bey. However, Crabtree has threatened to hold out because he was ranked higher in the gadzillion mock drafts that now take place before the actual NFL draft, and argues that he should be paid more than Heyward-Bey on that basis. He is effectively arguing: "Mel Kiper Jr. says I am better than Heyward-Bey, so the 49ers should pay me more than Heyward-Bey."
Information asymmetries often lead to interesting economic outcomes. Crabtree certainly makes an unconventional argument. But the entry draft places players in a very weak bargaining position, because of the huge opportunity cost of a holdout. I expect that Crabtree will eventually sign a contract worth less than Heyward-Bey's before the start of the season.
In the NFL, a drafted player and the team that drafted him must agree on a contract before the season starts. In this system, teams pay players based on expected marginal revenue product, not actual marginal revenue product, which generates information problems. The NFL solves this problem through an unofficial "slotting" system where compensation is roughly a decreasing function of draft order; the lower the draft position, the lower the salary. Wiggle room still exists in the NFL system, because teams and players still must negotiate a contract. The system gives little power to the player - holding out is his only effective bargaining chip.
Out in the Bay Area, the inscrutable Al Davis directed the Raiders to draft Maryland wide receiver Darrius Heyward-Bey with the
Information asymmetries often lead to interesting economic outcomes. Crabtree certainly makes an unconventional argument. But the entry draft places players in a very weak bargaining position, because of the huge opportunity cost of a holdout. I expect that Crabtree will eventually sign a contract worth less than Heyward-Bey's before the start of the season.
Labels: draft, foolishness, NFL; salaries
Thursday, August 06, 2009
Zimbalist on "The Sports Recession"
Andrew Zimbalist is interviewed in The New Yorker. Most of the discussion is about the impact of the economic crash on professional sports -- ticket sales, revenue sources, labor relations, and fans -- but the conversation is wide-ranging and certainly worth a read. Here's a snip:
What kind of effects are we seeing in Major League Baseball?
Attendance is down about five per cent this year. That news comes on the end of a string of thirteen years where attendance went up and revenue went up at a clip of eleven per cent per year. That was the average annual growth of revenue in baseball since the strike of 1994-95. Now that growth has stopped, and we’re probably seeing a reversal.
At Yankee Stadium and Citi Field they have less capacity than they did at the old stadiums, and they’re still not selling out. A lot of sponsors have dropped out. Certainly the automobile sponsors are disappearing in baseball, as they have in other sports. Of course, the sport that has been hit most acutely by the recession is NASCAR—they depend most heavily on the automobile industry.
Did any of the leagues anticipate an end to the boom, or did they just assume that salaries and sponsorships would keep on rising? Did any league prepare itself well for the collapse?
Sort of. Other than Nouriel Roubini at N.Y.U., not many people saw a collapse coming. People in the financial sector certainly didn’t see a collapse coming. You’d hardly expect David Stern and Bud Selig and Roger Goodell and so on to anticipate something that the country’s leading economists and finance gurus didn’t anticipate.
But they did make some moves when they saw instances where the economic problems were creeping up on us. The N.B.A. laid off ten per cent of its front office, and the N.F.L. did something very similar. The N.B.A. is projecting lower basketball-related income going forward, which should, if it holds up, lower the salary cap. Baseball teams have heavily discounted tickets and have increased the number of comps that they’re giving out to the community.
Labels: sports and the economy
Wednesday, August 05, 2009
AFL RIP
The Arena Football League deathwatch is over. According to a news report out of San Jose, the 22 year old AFL has permanently suspended operations. The league canceled the 2009 season last December but had been trying to resume operations in 2010. The AFL joins a long list of other failed football leagues, including Vince McMahon's XFL, the USFL, the WFL, and the All American Football Conference. Interestingly, Arena Football 2, which is owned by the AFL, will continue to operate, and does not appear to be in financial trouble.
The Continental Indoor Football League is also still in business, so indoor football fans still have many alternatives. It's been around since 2007.
The Continental Indoor Football League is also still in business, so indoor football fans still have many alternatives. It's been around since 2007.
Tuesday, July 28, 2009
Stage Wins, Points Losses
In spite of winning 6 out of 21 Tour stages, Britain's Mark Cavendish lost out to Norwegian Thor Hushovd for the sprinters "Green Jersey" competition. Rather than time-based, this competition awards points for finishes in stages (as well as small awards for intra-stage sprints) depending on the type of stage. The Tour referees docked Cavendish 13 points for an alleged blocking maneuver at the end of one stage. Even with those 13 points, however, Cavendish would have eked out only a 3 point win, although Hushovd won only one stage.
In the sports econ literature the prize structures in golf, tennis, and NASCAR have attracted attention. These sports also utilize points systems that closely resemble their prize structures. Below, I posted a chart contrasting the points awarded for the top 25 finishers in events across the Tour, regular PGA Tour events, and NASCAR.
The PGA Tour and NASCAR differ widely in their degree of equality between top finishers and those below them with the Tour in the middle.
The highly skewed structures of golf (and tennis) promote a lot of effort to win once participation takes place. The much more equal structures of the Tour and NASCAR incentivize very different behaviors. Peter von Allmen has suggested that the dangers inherent in NASCAR and the desire sponsors have for their drivers to stay in the race lead to the more caution-inducing incentives. It's interesting that another sport like cycling where there are significant dangers to unsafe "driving" also uses a relatively equal points distribution.
An article on NASCAR.com provides the historical context for the evolution of NASCAR points with a twist on von Allmen's explanation:
In the sports econ literature the prize structures in golf, tennis, and NASCAR have attracted attention. These sports also utilize points systems that closely resemble their prize structures. Below, I posted a chart contrasting the points awarded for the top 25 finishers in events across the Tour, regular PGA Tour events, and NASCAR.
The PGA Tour and NASCAR differ widely in their degree of equality between top finishers and those below them with the Tour in the middle.
The highly skewed structures of golf (and tennis) promote a lot of effort to win once participation takes place. The much more equal structures of the Tour and NASCAR incentivize very different behaviors. Peter von Allmen has suggested that the dangers inherent in NASCAR and the desire sponsors have for their drivers to stay in the race lead to the more caution-inducing incentives. It's interesting that another sport like cycling where there are significant dangers to unsafe "driving" also uses a relatively equal points distribution.
An article on NASCAR.com provides the historical context for the evolution of NASCAR points with a twist on von Allmen's explanation:
According to Holmer, Latford went back to his office and started thinking about how to create a simple but elegant points system that took into consideration several key elements: a sliding scale based solely on finishing order, something that would reward consistency and make it imperative for teams to run the entire schedule, and keep the scale narrow enough to provide for late-season championship battles.Getting individuals/teams to races had been a difficulty for NASCAR in the 1970s. This speaks to the tradeoffs of the varying points structures. Highly skewed structures may promote bold, aggressive activity but they make it possible to get paid a lot and seldom show up (e.g. Tiger -- whose non-award income is so high as to dominate actual prize winnings anyway). In the Tour, appearance may not be the issue per se, but consistency of effort is. The equal points system rewarded Hushovd for effort expended on some of the typical "off" days for sprinters. Nonetheless, when a guy wins nearly 1/3 of all the Tour stages and can't take the overall title, one wonders of the rewards to consistency are too great.
Monday, July 27, 2009
Hall of Fame Chances
Using a radial bias function network, a sort of neural net, Dr. Smith and Dr. Downey were able to identify statistical commonalities among Hall of Famers. As it turns out, hits, home runs and on-base plus slugging percentages are what count for hitters, while wins, saves, earned run average and winning percentage are what count for pitchers. All-Star Game appearances count for both, being especially valuable for hitters as they serve as a useful proxy for position.
Nothing surprising here, but I'd like to know, according to the model, the probability that Ron Santo gets into the HOF.
Keep in mind I haven't seen the model at the time of this writing. But it might make an interesting model to use to analyze the effect of the steroids era on the chances players get into the HOF.
HT Ishuan Li
Cross-posted at Market Power
Monday, July 20, 2009
Vick, Peer Effects & Self-Destruction
Yahoo! Sports Michael Silver lets former NFL running back and ex-con Bam Morris offer some strong advice to Michael Vick:
“I hope Mike sees that when you go to prison, you really have no true friends,” Morris says. “I’ll bet his mom, his brothers and his fiancée have his back. The same people he spent thousands of dollars on, they probably were nowhere in his corner. They’re what I call male groupies. Yeah, he was doing things he shouldn’t have been doing, but these dudes never told him to stop.”In econ, we put a lot of stock on the role of incentives and income -- with good reason. They explain a lot of outcomes, or, at least, sizable portions. As Morris' comments suggest, peer-effects also matter. Guys like Morris, and even more so Vick, have plenty of incentive in terms of lost income (not to mention prison) to steer clear of self-destructive behavior. What they did not have is the right "entourage." The same can be said for Steve McNair, who after a long NFL career, appeared to have best buddies who were not much different than guys he could have hung out with if he were a crack dealer in Nashville (McNair murder 911 call transcript).
“I feel like Mike has hit rock bottom,” Morris says, “and I feel like when somebody brings him in [to play], he’s gonna give it is his full attention. His talent is so superb, and he just needs to prepare, stay focused and apply himself – and to keep good people around him. [emphasis added]”
Labels: NFL; Michael Vick; Steve McNair
Saturday, July 18, 2009
Premier League "Domination" at Risk
During the last two years, the EPL has produced three of the four semi-finalists in the Champions League, a fact that has lead UEFA chief Michel Platini to consider changing qualification rules in order to re-balance the competition. Well, it looks like economic policy may do the job for him. Britain is about to hike its top income tax rate to 50%, and the pound has lost ground to the Euro. In contrast, Spain taxes foreign players at 24%. Obviously, this gives teams in La Liga a big edge in the transfer market. Could it be that Real Madrid have been "bidding against themselves" as they collect their transfer trophies?
See this story in The Guardian -- Tax burden will end Premier League's domination -- for a discussion of the tax hike's implications.
Thanks to Andrew Siegler for the link, who sees the positives in this for the English game: "I actually think this will be a good thing for English football, incentivizing English players to move abroad and learn how to play less like headless chickens." Yeow!
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Question for students: The Guardian's story states the follwing: "According to agents, most marquee signings will simply demand that clubs make up the difference so that the players receive the same net wage. In other cases, where clubs refuse to make up the difference, players are increasingly likely to opt for Spain or elsewhere in order to relieve their tax burden." What sorts of players will be successful in "preserving" their net wage, and what sorts will move abroad?
See this story in The Guardian -- Tax burden will end Premier League's domination -- for a discussion of the tax hike's implications.
Thanks to Andrew Siegler for the link, who sees the positives in this for the English game: "I actually think this will be a good thing for English football, incentivizing English players to move abroad and learn how to play less like headless chickens." Yeow!
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Question for students: The Guardian's story states the follwing: "According to agents, most marquee signings will simply demand that clubs make up the difference so that the players receive the same net wage. In other cases, where clubs refuse to make up the difference, players are increasingly likely to opt for Spain or elsewhere in order to relieve their tax burden." What sorts of players will be successful in "preserving" their net wage, and what sorts will move abroad?
Labels: english football, labor markets, soccer
Thursday, July 16, 2009
Ashes to Ashes
It’s Ashes times again, the historic cricket contest between England and Australia played every two years, alternating between the two nations. Australia have long dominated the contest and they have won nine out of the last ten series, the most recent a resounding 5-0 thrashing in 2006-07. Despite this alarming degree of competitive imbalance it remains one of the great sporting rivalries, kept alive by the English capacity to forget how badly they lost last time and to fondly imagine they start the contest as equals. Thus the five match series, in which each match will last for 5 days, is a complete sell-out and has been for many months.
The 5-day international version of the game is called Test cricket, and there are ten official Test Match nations: England, Australia, India, Pakistan, South Africa, New Zealand, West Indies (Caribbean islands), Sri Lanka, Zimbabwe and Bangladesh. Sadly, aside from the other great rivalry in world cricket, India v Pakistan, few other test matches can draw a large audience over five days, since few people have time to go, and TV rights are not worth much because games are played in daylight hours, not prime time. In recent years following the game on the internet has become very popular using the fabulous Cricinfo site, but this generates no revenue for the game.
Cricket is however, a game with huge commercial potential, as demonstrated last years by the launch of the Indian Premier League playing a shortened version of the game called Twenty20, which lasts around three hours and can be played under lights. The IPL hired all of the world’s best players to play over a month for eight franchises based in Indian cities and the broadcast rights were sold to Sony for over $1 billion. The second Twenty20 World Cup played between national teams took place recently in London and was also a huge commercial success.
Twenty20 represents a cross-roads for the game. Cricket is in general not run as a business, and those who run it prize the traditional format of the game, as do many of the older fans. Twenty20 is capable of bringing in new audiences and money, but there is a need to reduce time spent other forms such as test matches if Twenty20 is to expand. Just recently a Committee made up mostly of veteran players has produced a report on ways to make test match cricket more exciting, by creating something akin to a World Cup (not easy when each match can take five days!).
The struggle between tradition and innovation in cricket is quite fascinating- an excellent case study for anyone interested in how sport and business work together (or, perhaps, do not).
The 5-day international version of the game is called Test cricket, and there are ten official Test Match nations: England, Australia, India, Pakistan, South Africa, New Zealand, West Indies (Caribbean islands), Sri Lanka, Zimbabwe and Bangladesh. Sadly, aside from the other great rivalry in world cricket, India v Pakistan, few other test matches can draw a large audience over five days, since few people have time to go, and TV rights are not worth much because games are played in daylight hours, not prime time. In recent years following the game on the internet has become very popular using the fabulous Cricinfo site, but this generates no revenue for the game.
Cricket is however, a game with huge commercial potential, as demonstrated last years by the launch of the Indian Premier League playing a shortened version of the game called Twenty20, which lasts around three hours and can be played under lights. The IPL hired all of the world’s best players to play over a month for eight franchises based in Indian cities and the broadcast rights were sold to Sony for over $1 billion. The second Twenty20 World Cup played between national teams took place recently in London and was also a huge commercial success.
Twenty20 represents a cross-roads for the game. Cricket is in general not run as a business, and those who run it prize the traditional format of the game, as do many of the older fans. Twenty20 is capable of bringing in new audiences and money, but there is a need to reduce time spent other forms such as test matches if Twenty20 is to expand. Just recently a Committee made up mostly of veteran players has produced a report on ways to make test match cricket more exciting, by creating something akin to a World Cup (not easy when each match can take five days!).
The struggle between tradition and innovation in cricket is quite fascinating- an excellent case study for anyone interested in how sport and business work together (or, perhaps, do not).
Stats and fielding ability
Stacey Brook notes with approval the arrival of location-specific data for MLB games. Alan Schwarz discussed this in the NY Times about a week ago, stating that "all these pixels and bits will almost certainly revolutionize the analysis of baseball glovework." That is, Schwarz suggests that knowing the speed and location of every batted ball, placement of the fielders, etc, will enable fielding skill to be more accurately measured. Now, Alan Schwarz certainly knows what he's talking about, and Stacey may be right that this data will enable economists to better measure "marginal product."
But, I'm a skeptic on this one. My prediction is that this new data will perhaps be an aid in player development -- i.e. to improve positioning in the field, baserunning skill, etc. But I don't expect it will do much to isolate differences in "baseball glovework," and what little it does achieve on this score won't matter very much.
A number of years ago, Jahn Hakes and I decided to enter the quest to measure the missing elements of baseball productivity. We initially focused on fielding ability, and like most others, we failed in our quest. Why? Some people believe that statistical measures of fielding are very poor, and are of little help in distinguishing excellence from competence in this skill. I think that's right. But there is another factor: as much as baseball aficionados (like me) appreciate the fielding skills displayed by MLB's best fielders, differences in fielding ability are not a big factor in determining who wins and loses a baseball game.
Bill James' approach to Win Shares provides a useful benchmark for assessing the value of this new data with regard to the issue of fielding. James asserted that 1/2 the game is offense, 1/2 is defense, and of the defense part, 2/3 is determined by pitching. Now this was merely asserted and not analyzed, but various analyses by others are consistent with the emphasis on pitching as the dominant defensive factor. Taking the win share allocation as given, then all of the effort that goes in to measuring fielding ability can at best capture 16.7% (.5/3) of the variation in game outcomes. And how much of the variation around average fielding ability (the competent ballplayer) cannot be discerned with the naked eye? My hunch is that the scouts will beat the statheads on this one, even with newly improved data.
Despite my skepticism, I recommend a trip to Schwarz' article, if only to the view video clip which shows a replay with locational data overlaid on the field. It's pretty cool stuff.
But, I'm a skeptic on this one. My prediction is that this new data will perhaps be an aid in player development -- i.e. to improve positioning in the field, baserunning skill, etc. But I don't expect it will do much to isolate differences in "baseball glovework," and what little it does achieve on this score won't matter very much.
A number of years ago, Jahn Hakes and I decided to enter the quest to measure the missing elements of baseball productivity. We initially focused on fielding ability, and like most others, we failed in our quest. Why? Some people believe that statistical measures of fielding are very poor, and are of little help in distinguishing excellence from competence in this skill. I think that's right. But there is another factor: as much as baseball aficionados (like me) appreciate the fielding skills displayed by MLB's best fielders, differences in fielding ability are not a big factor in determining who wins and loses a baseball game.
Bill James' approach to Win Shares provides a useful benchmark for assessing the value of this new data with regard to the issue of fielding. James asserted that 1/2 the game is offense, 1/2 is defense, and of the defense part, 2/3 is determined by pitching. Now this was merely asserted and not analyzed, but various analyses by others are consistent with the emphasis on pitching as the dominant defensive factor. Taking the win share allocation as given, then all of the effort that goes in to measuring fielding ability can at best capture 16.7% (.5/3) of the variation in game outcomes. And how much of the variation around average fielding ability (the competent ballplayer) cannot be discerned with the naked eye? My hunch is that the scouts will beat the statheads on this one, even with newly improved data.
Despite my skepticism, I recommend a trip to Schwarz' article, if only to the view video clip which shows a replay with locational data overlaid on the field. It's pretty cool stuff.
Honorable Mention
TSE made the list of 30 top Economics Blogs in today's WSJ, receiving an Honorable Mention. It's good to be honored! The WSJ writers have a quibble for each entry. In our case, they quibble that "The specificity of the subject matter means that posting can be sparse... But the small niche makes it a breath of fresh air in the econoblogosphere." Thanks guys and gals!
Labels: naked self-promotion
Thursday, July 09, 2009
Mad, bad or just dangerous to know?
Florentino Perez, President of Real Madrid is continuing to call for the creation of a European Superleague which would guarantee the top teams representation and more frequent competition. Matthew Syed in the Times has a nice article setting out the logic. So is Perez a visionary or just someone who has realized too late that having the world's best players and no one to play against is but a short step from insolvency.
