Sunday, April 30, 2006

Ruth's last days in baseball 

Here's an interesting account from Richard Sandomir in the New York Times. Ruth's last hit was his 714th homer, on a day that he hit three. But he was in serious decline, and his career would end in a week. Barry Bonds may be approaching a similar point, which in some ways is too bad. I for one would like to see him swat fifty big flies while being tested, which would go some way to putting the steroid controversy to rest. (Yes, I buy Art Devany's argument in "Steroids, Home Runs, and The Laws of Genius (pdf here).)

Saturday, April 29, 2006

Will we be blamed for future strikes? 

The NHL lock-out of 2004-05 was the seventh labor dispute in the past 25 years to cost North American fans access to the games they love. And this incident was the biggest, leading to the cancellation of an entire season. People ask each time one of these events occur, will the fans come back? In the NBA and NFL, each time games were cancelled fewer fans came back, although the decline did not have statistical significance. The story in hockey is a bit different. In 1994-95 more than 40% of the season was lost to a labor dispute. The fans reacted in 1995-96 by setting a new attendance record. In 2005-06 history repeated itself. An entire season of games was lost and fans reacted by setting a new attendance record. This leads one to ask, does taking hockey away from NHL fans make these fans happier?

Not being much of a hockey fan, I do not know. What I do know has been detailed in The Wages of Wins and in the papers I published with Martin Schmidt. In essence, after seven disputes the data keeps telling the same story: fans do not hold a grudge when games are taken away. Of course, this is not the story the media tells. The media tells us that strikes and lockouts threaten the future of sports in North America. In fact, one could argue that the potential player strike in baseball in 2002 was avoided because both sides were convinced that a strike would threaten the survival of Major League Baseball.

We have now written a book that is bound to be read by perhaps dozens and dozens of people. In this book we argue that the story the media tells about labor disputes is not true. Although telling the truth is important, there may be a negative externality associated with our honesty. If labor and management in professional sports believe that strikes and lockouts do not threaten future attendance, will these events occur with even more frequency?

It is a frightening thought. Even more frightening is the thought that people might think future labor disputes that cancel games are our fault. So perhaps my mother was wrong. Maybe honesty is not always the best policy.

The NFL as an economic juggernaut 

The Economist has a feature this week on the NFL and the lessons other sports might draw from its success. Most of it is familiar, including the incredible revenue generated by the League. But one observation due to John Vrooman is worth pondering: player wages have grown in the NFL at 9% per year since 1990, compared to 12-16% annual growth in other North American leagues. They've done this without enduring a work stoppage during the period, in contrast to the other three leagues. This difference presumably reflects a relatively weak player's union, stemming in part from the relatively short length of an NFL player's career. Striking now for a pay raise in 3 years make little sense if you won't be around to collect it.

Update: Economist turned diplomat George Shultz makes a similar observation in the WSJ's (free) Weekend Interview: "You show me a union that will never strike, and I'll show you a union that isn't going to get anywhere. You show me a management that will never take a strike, and I'll show you a management that's going to get pushed around."

Thursday, April 27, 2006

Fire 'em! 

When Curt Flood asked for higher pay from the Cardinals back in the late 1960's, the Cards' shuttled him off to Philadelphia. What happens these days?

Montgomery Maulers owner Jamie LaMunyon had an emphatic response to her players' demand for back wages: You're fired.

LaMunyon said she will field a replacement team for the National Indoor Football League game at Osceola, Fla., on Friday, and next week at home.

"I have cut all the football players," she told the Montgomery Advertiser in a story Thursday. "Fans will see a whole new team next week in Montgomery. Maybe they can win a game."

The mass firings came after four Maulers held a news conference at a local attorney's office Wednesday saying the team wouldn't travel to Osceola if LaMunyon didn't pay money they claimed she owed them.

Attorney Donald Jackson said some players were owed as much as $800 or $1,000 and the average was about $650.

"In all my years of a sports-based legal practice, I have never seen anything quite like this," Jackson said. "But it's not really surprising. The owners of this team are apparently in dire financial straits. Whether you call this a termination or a refusal to pay, it's all the same. What she's doing now is grasping at straws."

Newmark on the NC State coaching search 

Here's Craig's take. Frankly, I'd be stunned if they hired either guy...

Mine? The Wolfpack is fattening the wallets of guys that want no part of State's steady diet of games vs. Duke and UNC.

Update: On second thought, maybe there is something strategic behind releasing the names of Ford and Whittenburg at the same time. Pack Fans, like Craig, react to the Ford whispers with horror, and rush into Whittenburg's welcoming arms. Perhaps a very clever move by State's Athletic Director Lee Fowler! Still, it's a big ask, and surely a step down from what they had in Herb Sendek.

Why I Want to Attend a Football/Soccer Match While I Am in the UK 

It isn't the game so much as the ambience.

Tuesday, April 25, 2006

The downside of sports ownership 

Owning a sports team in North America in the last 50 years would seem to be the equivalent of having a license to print money. Be prudent but intelligent in managing talent in the squad, collect a nice revenue sharing payment for the national television contract, and watch the asset value of the franchise march onward and upward at 10-15 per cent per year. But not in this case. Seven years of owning the Blues in St. Louis may have taken a significant chunk out of Bill and Nancy Lauries' fortune. They are poised to sell the club to a group led by Dave Checketts, former president of Madison Square Garden:
The Lauries bought the Blues in 1999 for $100 million. They will receive about $150 million from Checketts, but will spend $60 million of that to pay off the arena bonds, another $50 million out of their own pocket to pay off outstanding team debt plus an additional $15 million to $25 million to cover this season's losses. They also incurred annual losses totaling about $200 million from 1999 through 2005. All told, it appears the Lauries will leave with $285 million less than before they purchased the Blues.

....The case of the Blues, though, is extreme. The team lost nearly $48 million in the season before the lockout, beset by low attendance and a high payroll. Local attendance continued to lag this year, even as the league set new attendance records. [Schmidt and Berri, check!] Through April 10, the Blues ranked 28th out of the NHL's 30 clubs in total attendance. Average game attendance slipped 23 percent, from 18,560 last season to 14,240 this season. That marks the worst decline in the league.
It would be interesting if a smart reporter like Dave Leonhardt would sit down and talk with the Lauries about their experience. One buys a sports team not just as an asset appreciation play, but with some anticipation of sporting success. The Lauries seem to have been hammered on both fronts.

Monday, April 24, 2006

The Business of Baseball 

Forbes' annual estimates of operating income and franchise value are up. The Yankees top the list in asset value at just over a billion. Nevertheless, they are estimated to have lost $50m in 2005, due primarily to a $77m payment in baseball's enhanced system of revenue sharing. Michael Ozanian writes that
by not using their subsidies to boost player payroll (which was the intent of revenue sharing), the Pittsburgh Pirates, the Royals and the Tampa Bay Devil Rays each earned more than $20 million.
Nice work if you can get it!

The Yanks' attempt to shield income from the revenue sharing system is discussed by Ozanian and Lesley Kump here, in a piece with the crafty title, "Steinbrenner's Tax Shelter." Richard Justice discusses the Astros' numbers with owner Drayton McLane here. Somehow, I'm not surprised to find out that the man drives an 8 year old Ford. Not that there's anything wrong with that; in fact, I'd rather he spent his hard-earned money on Roger Clemens than a fancy new car.

Sex, Hype, and Videotape in the Draft (Minus The Sex) 

With the advent of the internet, 24/7 sports channels, and the NFL Network, media coverage leading up to the NFL now rivals the playoffs. Here are some econ-related views of the draft.

Stock Picking & The Draft: Burton Malkiel's famous book, A Random Walk Down Wall Street, popularizes the academic idea that the expected return from picking one stock is about the same as any other stock. It would be a stretch to say that is exactly true for picking aspiring NFL players, but there is a ton of uncertainty. Will Vince Young be more like Steve Young or Andre Ware? Will Matt Leinart be a second-coming of Joe Montana or more like Steve Walsh? There is also a "Castles in the Air" (Malkiel's term for over-hyped sentiment) element to the upper part of the NFL first round where players get much more attention than warranted. While lots of All-Pros and league MVPs can be found among these, if team rather than individual success is the standard, then one should not place too much emphasis on the ultra-hyped top 10 picks. During the Patriots mini-dynasty, the only ultra-high draft pick to contribute heavily has been Willie McGinest (4th overall). Instead Tom Brady came from the 6th round, Bruschi from the 3rd, and others from the late first through later rounds or by trades. Pittsburgh's 2006 championship team relied more heavily on earlier picks than the Patriots, but Ben Roethlisberger at 11th overall is the highest pick excepting players acquired in trades.

Contributions to Winning: How much will a player contribute to winning, even if he pans out? All positions are not equally valuable. All GMs seem to get this point to some extent in that different positions are not equally likely to be drafted. When O.J. Simpson was taken first overall in the 1969 draft, team rushing yards matched team passing yards. Now, they range from 30 to 70 percent of passing yards among the best teams in the league going after positional players who have the biggest impact on the passing game, QBs, left OT, corner backs, defensive ends, makes more sense among the most expensive picks. Nonetheless, Reggie Bush has garnered lots of attention and may go first overall. The current importance of passing relative to running in the NFL would seem to make the implicit cost of taking a running back -- even one with draft "grades" as high as Reggie Bush -- a questionable proposition. On the other hand, if a team is willing to utilize Bush extensively as both a RB and a kick/punt return man, then his value might be much higher. However, most teams are reluctant to utilize players at both places for very long because of injury fears, lowering the value of any individual player.

Supply, Demand, and Reggie Bush: As readers can see, I'm not a big fan of picking Reggie Bush first. Because of the relative abundance of skilled runners and the contribution of the offensive line to success in running, a first pick and the corresponding salary seems like a lot to obtain Reggie Bush or any other RB. Mike Shanahan has made an art form out of combining off-the-radar runners with a good offensive line to produce one of the most consistent rushing attacks in the league. Pittsburgh did it with an undrafted Willie Parker and a senior citizen, Jerome Bettis. The Texans might be better off drafting an offensive tackle to protect their QB as going after some second-string tailback from Georgia like Terrell Davis.


Matching & Vince Young: While I have written about the need for coaches to think about adjusting their "systems" to their players' skills, almost all coaches exhibit some inflexibility -- some much more than others. Because of this, it can be critical for some players with relatively unique skills to be matched with the right coach and system. Rumors are that Floyd Reese, the Titans' GM, thinks highly of Young as a sort of Steve McNair with even more upside potential. The trouble is that Norm Chow, the Titans offensive coordinator, is probably one of the most system-bound guys in the league. Developing Vince Young as a 3 step-drop "West Coast Offense" (or, at least, Chow's dump and dink version) would be a bit like drafting Kareem Abdul-Jabbar and then running a motion offense where he scurries around setting picks all the time rather than posting up consistently. According to rumors, Chow wants Leinart. In the near term, that would be a much better fit for Chow, but I'm not sure that Reese is picking a QB for 2006 or planning on Chow being the guy to develop him long term.

Here is Michael Silver (SI.com) with an observation from Trent Dilfer regarding this very point:

People like to compare him to Michael Vick or Randall Cunningham, but the guy he really reminds me of is Steve Young -- a breathtaking runner who is as capable of bulling through defenders as he is of blowing by them, a deft touch-passer with an outrageously untapped upside, a once-in-a-generation talent whose skills are too blatant to be ignored.

OK -- and I know this will crush some of you -- let's forget about me for a second. Instead, let's ask the opinion of a pure drop-back passer, Cleveland Browns quarterback Trent Dilfer. He said, when discussing Young (Vince, not Steve) the day before the NFC Championship Game, "Can he run an NFL offense? No. And you know what -- who cares? If you get a guy like that on your team, you change the offense. It would be bold, and this league is very resistant to change, but it would be awesome and he'd be a star."

Wednesday, April 19, 2006

Stadium Debate in Minnesota - Again 

Cross-posted at Market Power

The stadium debates are back in the news here in Minnesota:

A day after Hennepin County leaders passed a deal to build a new ballpark for the Minnesota Twins, the relatively easy ride for stadium bills at the state Capitol is expected to hit some detours today.

The House Taxes Committee will begin two days of rigorous public hearings on the Twins stadium plan today. And the plan will likely run into more diversions in the Senate, where the tax committee chairman is expected to try to merge the Twins, Vikings and Gophers bills and fund the projects with state money — a radical move with potential dire consequences for stadium supporters.

I like this part:

Many stadium supporters agree with Lenczewski that taxing one county for a state resource is far from ideal, but the Twins, the Hennepin County Board and their backers have resigned themselves to a political reality: You might lose the votes of some lawmakers from Hennepin, but you're more likely to win the votes of legislators from the other 86 counties.

First of all, just because they are called the Minnesota Twins does not make the team a "state resource." There is some evidence from MLB that teams named after regions have higher franchise values than teams named after cities, but that implies a wider appeal, not that sports teams are state resources. They are not "your Vikings" or "your Twins."

They are also businesses that compete with other businesses in metro areas, and if we want to point towards economic impact, it's worthwhile to note that workers in these other businesses tend to work in the same cities/states in which they live. We can't say that, generally, about the resources that produce sports entertainment.

So, call the Twins and the Vikings what they are: private businesses that provide entertainment in a market and that compete with other entertainment providers for entertainment dollars.

Addendum: The Star Tribune points out a gender issue:

As in the past, the stadium vote led to emotional exchanges and pitted the board's four men -- who supported the agreement -- against the three women -- who opposed it. "I think it will render the relationships up here irretrievably broken," Commissioner Penny Steele said tearfully as the vote was taken. "This thing is just a bad deal."

To me, this is not a big deal, but it must be to others.

Predicting the Fall in the Spring 

Like all sports fans, I want to know the future. I don’t want to wait around until October to see who will win the World Series. I want to know right now.

Well, what do we know right now? We know how each team did in spring training. And there is indeed a statistical link between how each team has done in the spring over the past three seasons and where the team finished in the corresponding fall. Unfortunately, it is not a very strong link. Only about 4% of the variation in final standings can be explained by spring records.

Although 4% isn’t much, is it enough to give us some insight into who makes the playoffs? Of the 24 teams who made it to the playoffs from 2003 to 2005, 10 looked like playoff contenders in the corresponding spring. From this we see that only 42% of the time spring training performance correctly identified playoff participants in the fall.

What about the identity of the World Series champion? If spring training mattered, the last three World Series titles should have been won by the Royals (2003), Twins (2004), and Angels (2005). This year the Marlins, based upon their Grapefruit league performance, should be planning a parade. Okay, I may not know much, but I know the Marlins won’t be champions this fall.

A quick confession: before looking at the link between spring training records and final outcomes I suspected there wasn’t much of a relationship. The link between spring and fall is important to note, though, because it is similar to the link between team payroll and final records.

Yes, there is a statistical relationship between what teams pay and how much they win. Like spring and fall records, though, the link between pay and wins is not very strong. As I show in a forthcoming book with Martin Schmidt and Stacey Brook, The Wages of Wins, team payroll only explains about 18% of the variation in team wins in baseball.

If we just think about playoff participants, from 1995 to 2005, the amount teams spent correctly predicted 51% of baseball’s finalists. So all in all, payroll is a bit better than spring records, but only a little bit.

What about the World Series? The leading payroll teams in each league this season are the Yankees and Mets. So a subway series is in our future? Well, if payrolls truly predicted final outcomes, 2006 would be our fourth consecutive subway series. And the Yankees would be playing for their eighth consecutive World Series title.

So do we know the future today? If all we know is spring records and payroll, it looks like we are still guessing. Unless, of course, you are a Marlins fan. If that is the case, you should have had your parade in April, because there won’t be any parade this fall.

39.4 minutes of talk on economics and sports 

That's what you get if you wish to listen to the voice of yours truly, on a podcast with Russ Roberts for the Library of Economics and Liberty. It was great fun, thanks to Russell's ability to adjust to my wandering mind. Recommended for your noon-time walk or jog, or perhaps some background commentary while soaking in the hot tub.

Welcome to David Berri 

We welcome David Berri as a contributor to The Sports Economist. Dave is Associate Professor of Economics at Cal State Bakersfield, and is a prolific contributor to the literature on Sports Economics. With coauthors Martin Schmidt and Stacey Brook, he's the author of the forthcoming (in May) book, The Wages of Wins: Taking Measure of the Many Myths in Modern Sport.

Wages of Wins is published by Stanford University Press, and has been endorsed by Alan Schwarz as "some of the most intelligent yet readable sports analysis I'’ve seen in a long time." Intelligent and readable describes Dave's body of work in general, and it is great to see more members of the Econ tribe place their work in accessible form for a general audience. Welcome aboard, Dave!

Monday, April 17, 2006

Player Development Questions 

On ESPN Soccernet, Fred Guzman takes U.S. soccer to task for not providing enough opportunity for the development of kids from poorer socioeconomic backgrounds.

The U.S. is a place where the parents of 12-year-olds are buying their kids $100-plus shoes and self-respecting teams are outfitting their preteen players in top-of-the-line sweats, jerseys and shorts from brand-name suppliers ...Elsewhere, the best players generally come from a much different socioeconomic background. In Brazil, from the shanty towns known as favelas. In Mexico, Argentina and the rest of South America, from the dirt-poor barrios. In the major European cities, from the lower-working-class neighborhoods where immigrants tend to congregate ... ODP [Olympic Development Program] is all about organized youth soccer. To receive exposure, kids have to play with visible traveling clubs that compete in high-profile tournaments. But it costs big money to play on one of the premier clubs.

In spite of appearances based on these excerpts, Guzman's piece is not a heavy-handed, politically correct diatribe. Instead, he considers at some length and with some subtlety the obstacles facing young soccer players from poorer backgrounds.

In the end, though, his piece raised more questions than providing answers as to the paths that permit talented younger players in other sports to rise out of obscurity. He notes professional academies in baseball for Caribbean youths. However, those are not the paths to player recognition or development in football, basketball, or baseball in the U.S. Instead, schools and competitions between them provide the mechanism. Why not in soccer?

One suggestion is that participation rates in the other sports are high enough to provide much better competition and so help develop better players, but that answer does not really satisfy me. I witnessed Billy Sims gaining 270 yards in a 2A Texas football playoff game in 1974. He was truly a man playing boys. Nonetheless, he was not hard to identify as a real talent. David Overstreet, who also played for Oklahoma and later the Dolphins, was a legend at Big Sandy -- a Class "B" school. Granted, some of the "technical" skill required in soccer may not be required of a football running back, but baseball players develop highly "technical" skills that also are identified in high school.

The relative lack of size of the soccer world in the U.S. may explain the difference. Pro scouts and college coaches scour the country looking at players. Several watched games (football, basketball, baseball) in my small hometown of 12,000 people while I was in high school -- not to watch me but some of my classmates or competitors. Soccer's relative lack of financial wherewithal and personnel do not permit such intensive scouting. Instead, much more reliance must be placed on special camps and tournaments.

The flip side of this question is why it is that sports academies sponsored by pro teams have not cropped up across sports such as basketball in the U.S. as they do for soccer in other countries, but that's a separate post.

Friday, April 14, 2006

Soccer's leading economist 

Joshua Robinson writes about the new president of U.S. Soccer, in today's NY Times:
Sunil Gulati discusses the future of soccer the same way he addresses his Principles of Economics class at Columbia University. When he is asked about the viability of a professional women's league, Gulati, a 46-year-old economist and the newly elected president of the United States Soccer Federation, answers: "There's no right to exist, so to speak, of any sports venture, or any business venture, for that matter. In the end, the market will decide."

He offers the same kind of response when asked about the success of Major League Soccer. "It comes down to two things: one is economics and the other is the quality of the league itself, which is obviously related to economics."

...Gulati, who served six years as vice president of the United States federation, was elected president by the membership of U.S. Soccer, the sport's governing body. He sees his four-year term as a chance to pursue initiatives in international relations, diversity and media growth, all with an eye to playing host to major events. But for every change he tries to implement, he knows he will face the same problem.

"There is no model," Gulati said. "Not many countries have the sort of competition we have for entertainment dollars, the geography we have in the U.S., and the role of education. The solutions we've got to have in soccer must be very different than they are elsewhere."

Thursday, April 13, 2006

So what's a few rules among friends? 

(Crossposted at SCSU Scholars)

76 percent of the respondents thought that institutions broke National Collegiate Athletic Association rules when recruiting players.

"People are wary of the recruiting process," said Rick Gentile, a professor of sports management at Seton Hall and director of the poll. "They like the purity of college athletics."

Yet 74 percent of the respondents thought that administrators placed importance on graduating their players, and 66 percent believed that coaches did so.

Almost all respondents -- 97 percent -- thought that college athletes should be tested for performance-enhancing drugs, while only 55 percent thought they should be tested for alcohol use.

Source (temp link; permalink for Chronicle of Higher Ed subscribers.) "Placing importance" is a pretty weak statement; I place an emphasis on eating low-calorie food, but I also "place importance" on the taste of chocolate donuts and Humpty Dumpty potato chips. (It's a Maine thing.) The near-unanimous support for drug-testing isn't very surprising -- we live in a society where everyone is quite happy to make someone else pee in a bottle, just not ourselves. But here's the one tha really made my eyebrows rise:
About one-fifth of the respondents thought that college basketball players intentionally influenced the outcome of games because of gambling interests.

One-fifth? Looks like this story got more coverage than I originally thought it would. (The more technical version of the story is here.) If one-fifth of people really think games are fixed, who bets?

Phil Miller argued a year ago that pointshaving wouldn't pay off if you just gave the student-athletes a stipend. He's right. But given how much is bet and TV money continuing to flood schools, who has a stake in stopping this?

Tuesday, April 11, 2006

I love the Kentucky Derby 

I even refer to Derby Day as a religious holiday. But do I love it this much?
As if custom-made hats, premium box seats and limo rides weren't enough, the Kentucky Derby will now feature the $1,000 mint julep.

...The sweet cocktail will be made with one of the state's finest bourbons and served in a gold-plated cup with a silver straw to the first 50 people willing to put down the cash at the May 6 race.

Mint from Morocco, ice from the Arctic Circle and sugar from the South Pacific will put this mint julep in a class of its own, the distillery selling the drink said.
Check out the picture at SI.com. Mmmm... looks nice! But for a grand, you ought to get the whole bottle of booze.

Link via JJ, frequent contributor to the comments section.

Monday, April 10, 2006

New York City stadium plans 

In a Newsday opinion column, Raymond J. Keating presents some figures on stadium finance/subsidies for the Mets, Yanks, and Islanders. He opposes "doling out sports welfare," as do most of us here, but such is the political equilibrium across the land.

One interesting tidbit: apparently the new stadium for the Mets is modeled after Ebbets Field, which sounds pretty cool.

Saturday, April 08, 2006

When Near Monopolists Collide 

Major League Baseball moved the Montreal Expos to Washington, with the relocated team renamed the Nationals, just about a year and a half ago. Doing so, a new franchise was placed very near to an existing franchise, the Baltimore Orioles, which had come to rely on revenues from the Washington market. These revenues came in the form of substantial attendance and, more importantly, broadcast rights. Both revenue streams obviously were threatened by the Nationals.

Major League Baseball negotiated with Peter Angelos, owner of the Orioles, and granted him the broadcast rights for the region. Angelos created the Mid Atlantic Sports Network, MASN, to broadcast Orioles' and Nationals' games, with the Orioles getting 90% of the revenues. The Nationals get a $20 million licensing fee. Eventually the Nationals are to become a 1/3 owner of MASN.

Comcast, the cable broadcaster, and the Orioles are now in a legal battle as Comcast refuses to air Nationals' games via the MASN. Comcast is staking out territory as the protector of consumers against the monopoly on rights granted the Orioles by Major League Baseball. Anyone who has ever dealt with Comcast will see the irony in Comcast's position.

Both sides testified before Congress recently, to the same subcommittee that heard the testimony from players last year on steroid abuse. Both sides agreed to work toward a compromise. Failure to reach an agreement may result in Baltimore area Comcast subscribers not getting Orioles' games. It may also induce Rep. Tom Davis, the Virginia Republican who called the parties before his subcommittee, to push for legislation that neither Comcast nor Major Leage Baseball would like.

For more on this see Angelos turns up Comcast volume.

Friday, April 07, 2006

This can't happen in the states 

Arsenal are in the Champions League semi-finals for the first time (woo hoo!!), and their next opponent is little-known Villareal. As with George Mason in the NCAA tournament, Villareal's run through the Champions League has been a big surprise. This is the first time they've even been eligible for soccer's biggest club competition, and that understates the magnitude of their achievement:
When Fernando Roig bought a controlling share in Villarreal in May 1997, people thought he was going slightly mad. And when he announced that he was going to make the club first division challengers, they thought he had completely lost it. How times have changed. When he said that Villarreal could win the Champions League on Tuesday night, no one thought him even slightly eccentric.

Villarreal's is the classic rags-to-riches story. When Roig took over, they were struggling at the foot of the second division, with a stadium that held just 3,500, crippling debts and virtually no history. They had never been in the first division and were overshadowed by every other club in the region. Now they have overshadowed virtually every other club in Spain.

"When Roig said we were going to get into the first division, I was scared. I didn't imagine we could get there in my wildest dreams," says José Manuel Llaneza, Villarreal's general manager. As for the Champions League, forget it, let alone the Champions League final. Now they are a single tie away - not bad for a team representing a town of 47,000 inhabitants that does not get a mention in the Rough Guide and boasts a solitary hotel.
The story encapsulates the main reason why I prefer leagues with open structures and no barriers to entry. It also suggests that, although Villareal is clearly an upstart, their current success is not just a flash in the pan. They look to be a formidable foe for Arsenal in the semi-final, and their Spanish counterparts in La Liga for several years at least.

I read another story a few days ago, in which an MLB official congratulated himself by noting the number of teams "in contention" for the playoffs last year on Sept. 1. He went on to state that the league is intent on improving competitive balance, so that 20 teams will be candidates for playoff spots at that date in the future. That's a false sense of competition, in my view. Real competition offers the opportunity for the Portlands, San Antonios, and Villareals to have a go at the top. Here's to Villareal's achievement - hurrah! But that's quite enough for this year, thank you. Go on you Gunners!!

Thursday, April 06, 2006

KC voters approve stadium subsidies 

From Commercial Property News:
In a referendum this week, voters in Jackson County, Mo., which includes Kansas City, voted 53 percent to 47 percent to raise the local sales tax by three-eighths of a cent to fund renovations at the Truman Sports Complex, which includes Arrowhead (pictured) and Kaufman stadiums, used by the NFL's Kansas City Chiefs and MLB's Kansas City Royals. A separate question on the ballot to fund a retractable roof for either stadium failed by a narrow margin.

All together, the successful measure is expected to raise approximately $850 million over 25 years, $425 million of which will be used for construction expenses. The rest will be earmarked for interest and as a reserve for future repairs at the twin-stadium facility, located southeast of Downtown Kansas City, Mo., on I-70. Under the terms of the referendum, the Chiefs and Royals will kick in an additional $100 million between them for construction, and the state of Missouri will provide $50 million more in the form of tax credits.

The stadium question inspired an unusually heavy voter turnout for an off-year referendum, with more than 92,000 people voting, about twice the usual number for this kind of vote, according to election officials. With the passage of the measure, both teams are committed to staying in Kansas City until 2031.
Here is the view of a KC Chamber of Commerce spokesman:
"The renovation vote was important because of the jobs at the complex it protects and the construction jobs it will generate," Pam Whiting, vice president of communications at the Greater Kansas City Chamber of Commerce, which supported both questions, told CPN this afternoon. "It was also important for Kansas City's image as a major-league town." Whiting also noted that the vote, especially because of its positive psychological impact, might have an indirect impact on real estate in the area, though historically the sports complex hasn't been a development hub. She added that another vote on the retractable roof might well be put on a future ballot, and if it succeeds it too would have a strong economic impact, because it would allow the complex to host a Super Bowl.
Judging from Pat Rishe's study of the economic impact on Detroit, a Super Bowl in KC would generate a net increase in KC spending of around $200m. This might happen once every twenty-five years. There are presumably auxiliary benefits from a roof, but the annuitized gain from hosting a Super Bowl is not very large. The voters were wise to reject that project.

The value of the jobs protected and created by construction are similarly weak economic justifications for levying the tax. Far more significant is the existence value of the team to KC residents who enjoy the games even if they don't buy tickets, and KC's "image as a major-league town." These are hard to quantify though.

And of course KC's major league "image" is an artifact of the closed league structure of MLB and the NFL, which strictly limits the number of franchises. This creates rents for teams whenever a location threat can be employed. Thus, the real winners of the vote are the Chiefs and Royals. Their relatively modest contribution of $100m for renovated stadiums seems proof of that.

Who's next?

See Dennis Coates' post for a pre-vote analysis of the KC issue.

Tuesday, April 04, 2006

(Weird) Politics as Usual 

Governance organizations often behave in strange ways even when they are not "governments" in the common usage of the term. In the past, I've written the internal politics of the MLB Players Association and its inactivity regarding the steroid problem, even though it is the most obvious source to instigate governance of the issue. Let me be very clear, non-governmental governance groups are much less powerful and dangerous than their cousins who have the power to kill, imprison, and motivate by force. However, influences on decision making (interest groups, voting problems, agency issues, ...) are all part of politics in organizations outside of "governments."

One aspect of politics is that it sometimes generates decisions that are just plain difficult to rationalize. A recent example and the motivation behind this piece is soccer's governing body, FIFA, and its stance on players "diving" to draw penalties (one of the real blights on soccer in my opinion). A brief summary of issue appears on ESPN Soccernet. The English governing body (the FA) petitioned FIFA to permit it to use post-game video evidence to punish divers.

FIFA respondy by saying

According to the FIFA disciplinary code, although a disciplinary committee may rectify serious and obviously incorrect decisions taken by a referee, particularly regarding disciplinary sanctions, a referee's discretionary decision cannot be classed as such. 'In general, factual decisions taken by the referee cannot be overruled.' FIFA point out that rules to punish diving, or simulation as it is also known, are already in the laws of the game, and referees should caution any players they believe have dived. The statement added that before the 2002 World Cup referees were ordered to crack down on diving, and the same instruction will be given to referees before this year's finals.
As usual, FIFA's decisions make about as much sense as the U.N. -- it's mirror image. I can't come up with a clear reason why video evidence regarding such matters would be abhorrent. It would not change referee decisions or undermine their authority regarding the match itself -- only penalties imposed on players in future matches and, thereby, provide an important deterrrent. Further, as a relatively late-comer to the world of soccer, it's strange to me how FIFA became so powerful that country-level governance bodies even bother to ask it about in-country issues. It would be equivalent to the U.S. asking the UN if we can have trial-by-juries. I'm left with little but my title as a response -- weird!

Just an aside, I would note that how strangely similar the FIFA powermongers are to European Union bureaucrats, European UN officials, the UEFA leadership, and key IOC officials. It's like when Diana Ross and Michael Jackson pictures flash on screen -- I have to do a double take.

Monday, April 03, 2006

Two for opening day 

The AL East looks more interesting this year than ever. The duopoly of the Red Sox and Yankees will be challenged by the Blue Jays, the Orioles pitching will be given a dose of Leo Mazzone's magic, and the Devil Ray organization has been transformed. The D Ray's goal is to play .500 ball, which would be a good first step. Check out Landon Thomas' piece in the NY Times to get a feel for what's going on in Tampa.

The Times was chock full of interesting baseball stories this weekend. The one I found most interesting is Alan Schwarz' piece on measurement of fielding skill. Jahn Hakes and I took a crack at this problem about five years ago and determined that there was insufficient statistical information to measure the contribution of fielding to winning games. Well, John Dewan reached the same conclusion, but he went one better. He set up a company, Baseball Information Solutions, to produce the necessary data.
By watching video of every major league game for the last three seasons and assessing the speed and location of every hit on an 8000-pixel grid, it has assembled a vast database of each fielder's performance. The scoring system is simple: If a fielder converts a chance that the typical fielder converts 70 percent of the time, he gets a +0.3; if he fails on what is a 20 percent shot, he gets a -0.2. The season total of these figures estimates how many aggregate outs the fielder accounted for above or below average.

[White Sox CF Aaron] Rowand, who impressed on defense last season with few meaningful statistics to show for it, actually led all major league outfielders in 2005 with a +30, meaning he saved the equivalent of 30 singles and extra-base hits from falling in the outfield. On offense, that would translate to 60 points in batting average and about 100 points in slugging percentage. The three Gold Glove winners -- Vernon Wells (+4), Torii Hunter (+5) or Ichiro Suzuki (+7) -- did not fare nearly as well.

What does this mean for the Rowandless White Sox? [Rowand was traded to the Phillies.] That their run prevention may suffer significantly with an unproven rookie, Brian Anderson, in center field. Meanwhile, the Phillies and their undoubtedly grateful pitchers received a vast upgrade: Rowand's predecessor, Kenny Lofton (+1), had been merely average at turning potential hits into outs. The Yankees will enjoy a similar boost from center fielder Johnny Damon, who was an average -3 over three years. Bernie Williams was the major leagues' worst at -78.

This system, applied to every position but catcher, has been used silently by several teams since 2003, most notably Boston. It was after the Baseball Info Solutions method confirmed the decline of Nomar Garciaparra in 2004 that the Red Sox traded for the high-ranking defender Orlando Cabrera, whose hit-saving glove helped them to the World Series championship. Twelve teams now purchase data from the company in hopes of being a step ahead of clubs that stubbornly rates defense by errors or traditional scouting.
I'm guessing that one of the eighteen clubs that don't is the White Sox, and that the Yanks did the Damon deal with full information. Regardless, the concept seems sound. Kudos to John Dewan & Co.

Play ball!