Thursday, June 29, 2006

*#@*#%Tradeoffs! 

Decisions imply tradeoffs. Sports economics provides so many clear examples. Often, these tradeoffs are awefully hard to judge accurately because they require speculation about what would be rather than reliance on observed data. As the World Cup has proceeded, the English and U.S. press have centered more and more on the walking tradeoff named David Beckham, England's rock star-esque captain.

ABC soccer analyst and former player Marcelo Balboa alluded to the tradeoff during the Ecuador game. Soccernet's Richard Jolly implies it in an article leading up to the game:
And the introduction of a five-man midfield would help that. Dropping Crouch, too, may act as a deterrent to anyone intent on another aimless 40-yard ball while, with three central midfielders, Gerrard and Frank Lampard could be accommodated without either taking the restrictive brief of the holding role. But it is a formation that puts the onus on the players on the flanks to supplement Rooney. Joe Cole, who also showed the difference a player with the ability to run at, commit and elude defenders can make, is accustomed to that responsibility. Indeed, it would be closer to his remit for Chelsea. In contrast, Beckham's lack of suitability for the right winger's berth was shown by his inability to make any headway against Erik Edman. While Cole glided past Niclas Alexandersson at will, Beckham thudded into the Swedish left back with a monotonous inability to escape him. Unleashing Aaron Lennon, like Rooney before him, could add a touch of the unexpected.
These kinds of decisions are tough. Beckham's set piece and crossing abilities are legendary, scoring on two set plays during the World Cup (one counting as an own goal). On the other hand, during the run of play, he is deadweight on the right side of the field as Jolly mentions. For the short stints when Tottenham's Aaron Lennon has come into the game to play the right wing, the difference couldn't stand out any more.

Commonly, decision makers -- whether politicians, business executives, or club managers -- ignore one side of the tradeoff, at least in their public statements. Sometimes, this may result from just incompetence. Other times, it merely deflects criticism and tries to legitimize the decision. "Hey, this project will result in 1000 new jobs, who wouldn't want that?" England's coach, Sven Eriksson has taken this tack on several occassions. After the Ecuador game, he said

"I have stopped saying anything to the critics about David Beckham. He is the best player at set pieces in the world and he is still criticised. I think he worked very hard today."

Okay, so that covers half of the Beckham equation, but what about the other half, Sven? Another important, but less discussed element of this issue is the key distinction between total and marginal contribution. While Beckham, along with Ronaldinho, is probably the best in the world at free kicks, it is not whether he his better but how much better than alternatives that really matters. On a team with Steven Gerrard, Frank Lampard, and Wayne Rooney, one might not miss Beckham's free kicks very much... but, one goal from a set play might be the difference, so back to those @*#$%* tradeoffs!

Jesse goes racing 

Here's a head-scratcher: Jesse Jackson is taking a leadership role in the Jockey's Guild. Although unconfirmed, Guild chairman and leading jockey John Velasquez has stated that Jackson and sports agent Dwight Manley have been hired as co-managers of the Guild.

Jackson made a 15 minute sales pitch to the Guild's board earlier this week. The Blood-Horse reports that Manley told the media that "jockeys should pursue collective bargaining and revenue sharing, which are standards in other major league sports." Moreover,
Manley and Jackson intend to organize jockeys, grooms, hotwalkers, and exercise riders, and would loan the Guild about $500,000 in the first year of the contract. Ultimately, the concern would receive 15% of the Guild's gross revenue for the life of the Guild, the sources said.
This sounds like a bizarre mixture of the teamsters and a hostile takeover!

The previous Guild manager was a Pepperdine economics professor, Wayne Gertmenian, who was fired following allegations of financial mismanagement. He's being sued for $10m by an injured jockey who discovered there was no money in the bank when he filed a claim. Gertmenian left the Guild broke, but turning to Jackson to save the day looks like compounding the error to me.

The principal function of the Guild is to address the risk and liability issues associated with race-riding. This is a serious problem and has not been dealt with in a satisfactory manner. But now the Guild is taking on the job of raising the standard of living of backstretch employees, and is hiring Manley and Jackson to lead the charge. And giving them a 15% perpetuity of gross revenues for a 1/2 million dollars in the bargain.

Result of head scratching: this must mean the guild is indeed truly broke, is incapable of hiring a credible advocate, and that rational jockeys are throwing in the towel on the organization.

Wednesday, June 28, 2006

Changing the game 

Next to pasta and pizza, Italy's 3rd largest export is cynical soccer. The Italians are not the only practitioners of the dark arts of the beautiful game, but they are certainly past masters, and Grosso's flop for the game-winning penalty vs. Australia will replenish their reputation. To add injury to insult, Italy's corruption scandal nearly claimed a life at Juventus yesterday, in what is reported to be a suicide attempt of a former member of the national team.

FIFA's quest to improve the game has brought controversy over tightly called games in this World Cup. It is thus doubly ironic that the best-refereed match of the tournament might have been turned in yesterday by Roberto Rossi, a referee from... Italy. Rossi reffed the match between France and Spain, and didn't book a player until Viera hacked down Fabregas in the 68th minute, which must be a record for this tournament. Unfortunately, Rossi proved once again that carding is an infectious disease, as the 68 card-free minutes were followed by 22 in which he pulled out 3 cards, with superfluous bookings to Puyol and Zidane.

Both Italy and FIFA have much work to do if they are going to clean up the beautiful game. Fixing what is on display in Germany, with some of the world's best (allegedly) referees to work with, might be feasible. Both the referees and the teams have received multiple directives about what will be carded in the tournament. Everyone has been warned.

There are two problems with this initiative, however. First, player behavior doesn't change overnight, and injustices such as Pope's sending off vs. Italy, and Materazzi's sending off vs. Australia result from calling the game a bit too tight. A slight error in what has been to now a routine play can result in an enormous cost to the team, particularly of the referee doesn't stop to think, as was the case with Pope (see minutes 21 and 46 here). Second, I can't fathom how knucklehead refs in league play will be able to control a game while adhering to the new, stricter guidelines. If this policy gets transmitted down to the leagues, as FIFA presumably desires, the controversy could escalate.

I'm not the only one hashing this out. Reader Andrew Rosen sent this analysis of the problem, which developed over arguments with fellow soccer nuts:
The logic of game theory applies here, best understood from the perspective of each player in this game: the referee, and the players on the field.

Ref's Perspective: Once FIFA asks refs to control the game tighter, and holds a ref accountable for his performance by allowing or disallowing him to the next round, a Yellow Card no longer becomes a big deal. ...[T]hose who have been more conservative (but not to the degree of the Russian Valentin Ivanov, or in the US v. Italy match, the Uruguayan Jorge Larionda) end up issuing a Yellow Card to try a control the game, but once that doesn't work, he has established a weak standard for a Yellow Card, which he now has to uphold for the rest of the match. A weak standard then spirals out of control, to the point of the 16 yellow cards and 4 red cards of the Portugal-Netherlands match. But the entire time, the Ref (assuming he isn't corrupt) feels he is doing the job asked of him by FIFA.

Player's perspective: If you're a player in a do-or-die match, you're not sure what the standard is, and the ref is calling a tight match but moreover is quick to give the Yellow Card, would you play it more conservatively or would you flop more in order to get more penalties on the other team? Clearly, it's been the latter case - there were an extraordinary number of flops in the Portugal-Netherlands and Italy-Australia match. But also, players cut (and are taught to cut) corners where necessary, and unless brazen (which should include magic recoveries after being carried off the field in a stretcher and being sprayed with the "magic" spray or bottle), these cut corners shouldn't be punished with cards - as in the unnecessary 2nd Yellow to Portugal's Anderson Deco for the pick-up that resulted in his red card. So the referee, by applying a stricter standard, has incentivized players to flop, which in turn has resulted in more Yellow and Red Cards, which in turn has directly affected the results in each match and subsequent rounds, when teams lose their best players (as in the case of the US (Eddie Pope, Pablo Mastroenni), Ghana (Michael Essien), and Portugal (Anderson Deco)).

This is the miscalculation of Sepp Blatter. Blatter assumed the standard was too weak, and more cards needed to be issued. But it's absurd to think that a team isn't punished in the World Cup after it has committed a foul - fouls committed before the 18-yard line are still punishable by direct and indirect kicks. In this World Cup, we have the best of the best taking these kicks. Fouls against Brazil, the Netherlands, England, and France near the 18 yard mark have all resulted in goals - and Brazil has 3 weapons in Kaka, Ronaldhino, and Roberto Carlos.
I generally agree with this point of view, but differ with Andrew on two points. First, strict treatment of time-wasting and delaying of an opponent's taking a free kick makes sense. If the rules are clear, Deco won't pick up the ball to take away an advantage which is due Holland. He'd been warned, and he paid the price. Because of this approach there was very little of this niggly behavior in the France vs. Spain match, and the spectacle improved as a result.

Second, I think Blatter was out of line in criticizing Ivanov after Portugal vs. Holland. First, Ivanov was following Blatter's instructions. Second, the match was nasty from the very beginning. The Dutch wasted no time taking whacks at Ronaldo (a prima donna I deplore). A red card could (and arguably should) have been issued to Boulahrouz as early as the 8th minute for planting his studs firmly into Ronaldo's thigh. But would a red card have eliminated the mean-spirited play that followed? I doubt it; given the approaches of the two teams, I don't know if there is a referee on the planet who could have controlled that match.

This is a tricky problem. FIFA is right to be concerned, and can probably reduce the simplest transgressions by drawing a stricter line. That will help to reduce cynicism and restore character to the game. But when it comes to determining if a challenge from the side is legit or harmful, the grey area is significant. Strict interpretation here risks eliminating players from the tournament such as Viera and Zidane. We watch because these guys are special. It doesn't make sense to take them out of the game for one or two minor fouls.

Tuesday, June 27, 2006

Statistical analysis of World Cup fouls 

Craig Depken has posted a nifty analysis of fouls and cards, using data from the last two World Cups. His findings:
[O]n average over the two tournaments there was one Yellow Card issued for every 5.5 fouls committed, ceteris paribus. A couple of interesting results from the first stage regression: the host team receives 4 fewer Yellow Cards over the course of their participation in the tournament and the more fouls committed against a team the fewer Yellow Cards issued to the victim team, ceteris paribus. This suggests (to me) that referees might let the victim exact some revenge on the pitch without punishing the victim for their redress.

....Based on the 2002 and 2006 World Cups, there is one Red Card issued for approximately every 12-13 Yellow Cards. There also seems to be a little home cooking for the host team above and beyond what consideration the team gets from the Yellow Cards issued.

....What I found interesting is that the U.S. team received 2 Red Cards on 5 Yellow Cards. Given the estimation results, the U.S. should have received 0.39 Red Cards (round down to zero) and yet received two. Was there bias against the U.S.? Hard to tell without more data. From these two tournaments (2002 and 2006), the 95% confidence interval of the number of Yellow Cards per Red Card is [0.89, 24.12], centered on 12.5.
This is cool stuff. I encourage Craig to go ahead and estimate a count model, rather than linear regression. That might tighten up the standard errors. [Craig links to the data here, in Stata format, for anyone who wishes to take a crack at it.]

Also, the talk is about the differential rate of cards being issued in 2006, which doesn't show up independently in Craig's statistical model. If both the commentary and the model are correct, then the extra cards are mostly a function of extra fouls being called. For example, the bookings issued for picking up the ball to delay free kicks, etc., which have been given warnings and a shake of the finger in the past.

On another World Cup note, here is co-blogger Brian Goff, talking with SI's Bill Syken about Tivo, commercial interruptions, soccer, and the NFL's problem with game length. Bill suggests that the NFL should go to a continuous clock. Perhaps, but that is part of what drives soccer players to feign injury, in order to give themselves and their teammates a rest. (Prediction for Craig's number crunching machine: stoppages for injury increase with time during the game, since the players are more tired late in the game).

Up next: the NHL's Penguins 

The next sports franchise available in the relocation sweepstakes appears to be the Pittsburgh Penguins of the NHL. This story by Mark Belko points out that the Penguins' lease at Mellon Arena expires next summer, and that the owners "can begin shopping the team next month." I have a hunch the marketing is already under way.

As noted here last week, Kansas City has a new arena in waiting. Belko suggests that Houston, Las Vegas, and Hartford may also have an interest in the team. Now that player wages have been suppressed by the new CBA, competition for the franchise should be strong.

But the local action is particularly brisk, given the pending award of slot machine licenses in the state of Pennsylvania. The Penguins have teamed up with one potential licensee, Isle of Capri, who have pledged $290m for a new arena in return for the monopoly license for Pittsburgh. But Pennsylvania's governor apparently prefers an alternative mechanism (or licensee - there are several bidders for the slot license).

This has all the makings of an incredible farce. We have politicians in various cities committing public money, in the hope of entering a league whose entry restrictions serve to raid the public purse. Add to that Pennsylvania's creation of a slot monopolist in Pittsburgh, and now a big chunk of those profits will fuel the bidding war for the hockey franchise. It's a good time to own the Penguins, and you can't blame them for playing by the rules. But, I must say, what a country!

Thanks to Publius for the link.

Friday, June 23, 2006

Underutilization of US Youngsters 

I would like to offer a couple of postscripts to Skip's Post-Mortem on the U.S. performance in the World Cup.

1. Although the results differed, the team's performance closely matched 2002 -- one very good game (Portugal '02--Italy '06), one ok game (Korea--Ghana), and one disaster (Poland--Czechs). For mid-tier teams like the U.S., advancing beyond group play depends a lot on the group's composition and random variation (balls going in v. near missess; penalties; ...). These fell in in the U.S.' favor in '02 but against the U.S. in '06.

2. Maybe the biggest strategic blunder that Arena made was not going all out to win the CONCACAF qualifying outright. After beating Mexico and securing the World Cup Finals spot, he backed off in the Costa Rica game and took a 3-0 defeat. In the end, this permitted Mexico to tie the U.S. on points but with a better goal differential. The FIFA-crats may have seeded Mexico higher anyway, but the case would have been much weaker given the U.S.'s higher ranking and winning CONCACAF. If the U.S. had pulled Mexico's group, they likely could have played exactly the same and advanced.

3. I do think that Arena underutilized (maybe underdeveloped is the better word) some great young talent. The U-20 team won a "group of death" including Argentina, Germany, and Egypt at the 2005 Youth World Championships, yet none of those players made the Men's National Team in Germany. I have wondered for some time, how could a team not overloaded with great players (as Skip noted) overlook young players who have performed well against top-level international competition? Arena wasn't shy about taking Donovan and Beasley in 2002 but drafted no such players in 2006.

I decided to do a little investigating of other teams. Eleven countries in the 2006 finals had U-20 teams at the Youth Championships. Of those eleven, only talent-laden powerhouses Brazil and Italy (along with Japan) took no members of their 2005 Youth team to Germany. Here's my count: Argentina (2), Australia (1), Germany (1), Korea (3), Netherlands (2), Spain (1), Switzerland (3), Ukraine (3). As the list shows, both soccer powers and mid-tier countries took U-20 players. Among the individual players, some are no-brainers getting serious time with big clubs such as Messi (Argentina-Barcelona). However, many others are with lesser clubs or in-country leagues. Charlton's Jonathan Spector (on loan from Man United), may have made the U.S. barring a late injury, but he was the only player really considered.

The name of Freddie Adu is best known, but probably the player who could have helped the U.S. the most is Man United's Guiseppe Rossi, who is still eligible to play for either the U.S. or Italy. The seventeen year-old attacking midfielder played in 12 first team games with ManU, scoring 4 goals and earning 4 assists. One Soccernet article put him among the top 3 teenagers in England. The trouble is that his aspiration is to play for Italy. In spite of his dreams, his Wikipedia entry notes that

"Rumours had circulated that he would have considered playing for the U.S. had they offered him a place in the 2006 World Cup squad, but such an offer never materialized."


Arena not only handed roster spots but lots of playing time to Donovan and Beasley in 2002. One wonders, had Rossi not only been given offer of a roster spot but a promise of significant playing time, could he have turned it down given that a first team slot and significant playing time for Italy may be 4 or 8 years away, if it ever comes at all.

A related question also comes to mind: if U20 stars from other countries not only make national team squads but garner significant playing time with clubs (sometimes big clubs), why is the MLS culture one where coaches are very slow to utilize these players when they turn pro. Instead, they gather lots of splinters watching older U.S. players who couldn't stay on the pitch with their Argentinian or German peers.

Team U.S. post-mortem 

Here are my top three reasons for the failure of the U.S. team to advance, in order of importance:
1. Talent. The US were the fourth best team in the World Cup's toughest group (top to bottom). So finishing fourth should not be surprising. Italy is a world power, we are not. The Czech Republic has Nedved of Juventus, Rosicky of Arsenal, Koller of Dortmund, and Cech of Chelsea. Ghana has Essien of Chelsea and Amoah of Dortmund. Our best players - McBride and Reyna - are a cut (or two) below their best. The good news is that our top players are working their way up the ladder in the European leagues. But they are not there yet.

We had one player on the field with a good first touch, speed, and who took on defenders: Clint Dempsey, who deserved his goal. God bless him, hopefully with some company in 2010.

2. Tactics. The U.S. just did not threaten the goal enough. Part of this comes down to the difference in talent levels. But don't forget, last World Cup this same basic team played Germany off the pitch with a solid passing game. Playing McBride alone up front, with the opponents covering the runs of Beasley and Donovan, left the U.S. searching for options they couldn't find.

Before the World Cup, there was an article in the NY Times by George Vecsey (I think), which had a telltale line from Arena about how the individual players were good enough to move around like chesspieces, and play in various systems. Arena overplayed his hand in this aspect, and the team just looked lost.

Australia, like the U.S., has no soccer history and the sport is third or fourth fiddle behind Australian football, rugby, and cricket. They had an easier (though not simple) group to move out of, but it was their style of play which posed the sharpest contrast to the Americans. The Aussies went after it, while the Yanks were trying to figure out what they should do. Arena's conservative approach was right for the match vs. Italy, but it snuffed out the team's spirit in the other two games.

3. Timing. Mastroeni's lunge and red card, and Merk's preposterous whistle for a phantom penalty were disastrous, coming right after the U.S. had seized momentum and strategic advantage. But good teams can overcome these problems, and that brings us back to the first point.
In Vecsey's report (TS-$) on yesterday's 2-1 loss to Ghana, he remarks on the "yowling" fans like myself, the main point being that plenty exist:
Back home, some soccer fans are yowling about Arena's strategy. I reject the suggestion that truly helpful players were ignored. The main criticism I might make is that Eddie Lewis and DaMarcus Beasley, two useful players in 2002, were moved from their normal left-side positions before this World Cup, although Arena surely had his reasons. They were reinstated yesterday, partly out of necessity when other players were not available. Still, the yapping from the home fans is a good sign. It shows people care. Yankee fans yowl. Dallas Cowboys fans scream. At this advanced stage, Knicks' fans just babble. But at least there is a fan base that did not exist 16 years ago.

"Bob Gansler could have walked through Times Square and nobody would have recognized him," [Sunil] Gulati said about the 1990 coach who lost three straight matches in Italy. This team and the 2002 team were both light years better than the 1990 team.

Under Arena, this team took some major steps toward the United States' becoming a soccer powerhouse, sometime later this century. This team did not reach the quarterfinals like Arena's star-kissed team did in 2002, but it did play in front of two of the noisiest crowds ever to witness an American soccer game.
Light years is correct. These days the U.S. team is not criticized for incompetence, but the failure to meet somewhat hopeful expectations. Better days are ahead.

Thursday, June 22, 2006

"America: exceptional no longer" 

My thoughts on economic forces and the future of soccer in the States are in an essay at TCS Daily.

Wednesday, June 21, 2006

Blackout 

Blackout: that's what Orioles' reliever LaTroy Hawkins calls today's lack of African American baseball players on major and minor league rosters.
Nearly 60 years after Jackie Robinson burst through baseball’s color barrier, U.S.-born African-American players are virtually vanishing from the game. Three decades after blacks made up nearly 30 percent of major league rosters, they now make up about 8 percent — less than half the 17.25 percent of 1959, the first year every team was integrated.

The trend has come home to roost on the roster of the Cardinals, who currently have zero blacks on their major league roster and almost none in their farm system.
This doesn't explain the current findings, but is more a sign of things to come:
According to the National Recreation and Park Association Journal of Leisure Research, a survey of 128 youth "select" teams from nine Midwestern states in 2000 and 2001 found that less than 2 percent of the more than 1,400 players were African-American. Sports Illustrated is among other publications to document similar scenes.
There aren't many African Americans playing on collegiate rosters either:
Meanwhile, the NCAA reports that blacks make up only 6 percent of Division I baseball rosters. Most telling, historically black schools such as Mississippi Valley State, Florida A&M and much of the Mid-Eastern Athletic Conference have rosters approaching 50 percent white.
Simply put, there's not many black kids playing baseball.
"It’s not offensive," said Gerald Early, an African-American Washington University professor and essayist who served as an adviser on Ken Burns’ exhaustive documentary on the game. "It’s not because they’re being segregated out, or people think they can’t play. They can if they want to, but they’re opting not to play."

Phil Bradley, special assistant to the executive director of the Major League Baseball Players Association, agreed.

"The point is there’s not a lot out there," said Bradley, a former Mizzou football and baseball star. "I don’t know that I can hold an organization accountable for that. I just think it’s a matter of if they aren’t out there, they can’t be seen."
And baseball teams apparently are doing what they should be doing - putting the best players on the field:
"You don’t have the luxury of picking and choosing (by race). There’s a talent pool, and there are 30 teams going after that talent," said La Russa, who has been a major league manager since 1979. "I mean, that would be exactly the wrong message to send, to say, ‘Well, gee whiz, we better have a certain number of players from the Pacific Rim, a certain number of Latin players, a certain number of black players, a certain number of white players.’"
...The Cardinals media guide features 64 foreign-born players — including 61 of Hispanic birth — out of 188 listed in the team’s minor leagues.

The media guide features 10 scouts in Latin American locales. It depicts no African-American scouts among the 32 men pictured and one black among the 47 featured in their farm and scouting department. But Lamping scoffed when asked if more African-American scouts might mean more African-American players.

"The presumption there would be that scouts are (seeking their own race)," he said. "Scouts go a lot of places to find players, and the way they distinguish themselves is by finding (players) others overlooked."
It seems pretty clear that what's happening here is not a demand-side discrimination issue but, rather, a supply side issue.

Addendum: what are kids playing these days?
And according to the Sporting Goods Manufacturing Association, in 2005 baseball was the 18th-most popular participation sport among children of all races ages 6-17, with 5,949,000 playing nationally. Bowling was No. 1 with 17,035,000 and basketball was No. 2 with 15,994,000. Also ahead of baseball were in-line skating (sixth) and skateboarding (10th).
Bowling?

Putting the cart before the horse 

In the WSJ, Thaddeus Herrick writes about cities that are building arenas, even though they lack a team to play in them.
Complete with a glass exterior and terrazzo floors, the $276 million Sprint Center is scheduled to open next year in this city's downtown.

The 18,000-seat arena is designed to help anchor a massive project that includes nine blocks of retail, residential and office space that local officials say will revive Kansas City's faltering central business district. Already, there's a waiting list for luxury suites. "It was what we needed to do," said Wayne Cauthen, Kansas City's city manager.

There's just one problem: Kansas City has no major-league team to play there. The city is hoping for a National Hockey League team, but so far it doesn't even have a minor-league tenant for its new venue.
Amazing. It should come as no surprise that such projects operate at a loss. RTWT.

Tuesday, June 20, 2006

More prices: NBA edition 

I note this only since Tyler Cowen's post refers to the current odds in the NBA Finals as "Free Money." I assume this is his objective, rational opinion, and not merely reflective of his admiration of the magnificent Dwyane Wade:
Over at www.tradesports.com, the Dallas Mavericks, while down 3-2 in a seven-game series, are still favored with a contract trading in the 53-55 range.
When looking at the World Cup Odds yesterday morning, I noticed the same thing at Betfair. And indeed, the Mavs are still favored there at about 9-10.

Perhaps the market is poorly uninformed on the relative talents of Wade + Shaq et al vs. Nowitzki + Terry et al. Or perhaps the market has not priced in Commissioner Stern's vendetta against Mavs owner Mark Cuban, but I doubt that is what motivated Tyler's post.

Free money? If the Heat's probability of winning each game is .3, the series is currently a 50-50 proposition. I admit to being puzzled by the odds initially. But if you believe the Mavs are the better team and the home court advantage is big (it is probably the difference in two of Miami's three wins), then the price seems a reasonable proposition.

While I'm at it, congratulations to the Hurricanes for winning the Stanley Cup! As much as I dislike the American playoff format, the Canes looked the better hockey team to me, with the exception of game six.

P.S. For what it's worth, the Mavs + 3.5 currently returns 20 cents on the dollar for game 6 at Betfair, and are 5.5 to 6 point favorites in Vegas. I'm not sure what the data say for 5.5 and 6 point home favorites - do they win 70% of their games?

Update: The Betfair market is unchanged, and the Tradesports market has strengthened slightly (converging with the Betfair price at 55 cents to the dollar). This despite continuing signs that the Mavs may be distracted by the feeling that they've been robbed. Debit another $250k from Mark Cuban's bank account.

Monday, June 19, 2006

Stern Ups the Ante on Cuban 

During this season's playoffs, the feud between NBA Commissioner David Stern and Dallas Mavs Owner Mark Cuban has escalated to the point of influencing game outcomes. The league suspended the Mavs' Jason Terry for Game 6 of the series with San Antonio and Jerry Stackhouse for last night's Game 5 with Miami.

The Dallas Morning News' Kevin Blackistone wrote about the latest suspension, saying

This is one time Mark Cuban will be absolutely correct in screaming bloody murder about an officiating decision concerning his team. After all, the veteran referees, including the highly respected Dick Bavetta, who called Thursday's game and couldn't help but miss Stackhouse leveling Shaq on a two-on-one fast break, tagged Stackhouse with a flagrant foul but did not feel compelled to toss him from the floor. Shaq, 7-1 and threehundredsomething pounds, dismissed the collision after the game, comparing it to being tackled by his daughters.

Pat Riley did compare it to James Posey's rundown of Chicago's Kirk Hinrich, which drew a one-game suspension for Posey during the Heat's first-round series. But there appeared no intent from Posey in that incident other than to knock Hinrich silly. The only thing excessive about the Stackhouse incident is the penalty imposed by Jackson.

Now these NBA Finals, which just started living up to the promise from what has been an absolutely spectacular postseason, are marred, or at least Game 5 will be. Put an asterisk next to this one.

In hindsight, maybe Stackhouse shouldn't have raced back to try and stop Shaq. Maybe it was just one of many mental meltdowns for the Mavericks on Thursday night, like the Josh Howard turnover that led to the event. The Mavericks were down 17 then, but it was just midway through the third quarter. All Stackhouse was doing was trying to thwart an easy basket, which is what you're supposed to do at this time in the season. Had he been in a Heat uniform, you can bet Riley would've applauded his attention to detail and Cuban would've sounded Riley's charge. That's the way it goes. But now Stackhouse won't be around for Game 5 because one guy overruled the officials and decided Stackhouse's foul was over the top.

This isn't Jason Terry being tossed during the San Antonio series. The rules are clear on that one. Throw a punch, no matter how weak, and you get a game off. This isn't DJ Mbenga getting a six-game suspension for checking on the well-being of Mrs. Avery Johnson, Cassandra, in the Phoenix stands. The rules are clear on that one, too. Any player who goes into the stands will be suspended.

The decision on Stackhouse was subjective, unnecessarily so.

As Cuban and Stern have fired shots back and forth, the Commish really had little ammunition -- his $250,000 fine levied on Cuban amounted to little more than a parking ticket to the mega-wealthy Cuban. As the playoffs have proceeded, David Stern has finally found a bigger stick -- supsending Mavs players in critical games. (Ostensisbly, the suspender is league disciplinarian Stu Jackson.) As Blackistone noted, the suspension of Terry might be argued or defended by the league on "technical" grounds. The Stackhouse suspension has little support. Blackistone avoids the payback angle, but it seems pretty obvious. The flagrant foul on Stackhouse might not have even been a foul in the playoffs during the mug-and-assault NBA of the 1990s.

A couple of points are worth noting. One is that Cuban's pugnacious behavior seems to keep many other NBA owners on Stern's side and permits stern to indulge in discretionary behavior not necessarily in the league's interest. The other is that
while Cuban is often lacking in PR skills, he has a legitimate beef and keeps keeps pushing Stern's buttons by pointing out flaws in the evaluation and selection of referees. The NBA has never quite fallen to the depths of MLB in its lack of control over officiating, but it is an odd stance when the league Commissioner's position of refeering sounds more like Richie Phillips (MLB umpiries union leader) than as league commissioner trying to improve the product.

Officiating directly influences the product sold to consumers. MLB, and to a lesser extent the NBA, lost sight of this. They worried so much about the nickles and dimes of official's compensation that they ceded a key element -- control over the evaluation of officials. In contrast, The NFL, that league never lost sight of the fact that officiating directly influences the product. As a result, the NFL not only tightly monitors officiating, but imposes a variety of rewards/penalties for good or poor performance.


Odds against the U.S. 

Betfair's market makes Ghana's Black Stars 13-10 favorites over the U.S. on Thursday. The all-important U.S. victory is currently rated at about 5-2. The other requirement for the U.S. to go through is a win by Italy, priced at 11-10 (forget the unlikely goal difference scenarios associated with a draw in this game). U.S. qualification - i.e. the joint outcome - is priced at 11-2.

If these prices are approximately efficient, passage to the round of 16 and the right to face Brazil is possible, though unlikely, for the U.S. That won't keep me from watching!

Other bits and pieces from Betfair: Argentina are nipping at Brazil's heels for favoritism to win the tournament, both priced around 4-1. England and Germany are rated at 8-1, followed by Spain (10-1), Italy (13), Holland (15), and the pack. I don't write short odds contracts, but taking bets on France at 24-1 looks like stealing money.

Speaking of France, here is a stat from one of Rob Hughes' more temperate columns:

It is said by French mathematicians that in 52 internationals when Thierry Henry and Zidane have been on the same pitch not once has Zizou provided the pass for a Henry goal. If true, then somebody else had better do it.
That should have changed in the play that lead to Zidane's booking yesterday. Nevertheless, Zidane's absence vs. Togo might, ironically, work to France's advantage. What are the odds against a Henry hat trick this Friday?

Sunday, June 18, 2006

The cards are getting ridiculous 

Korea vs. France, 86 or 87th minute, tie game. Great save by the Korean keeper on Henry, who was put through by Zidane. Zidane is lurking for a rebound, and the Korean #2 deliberately steps in front of the onrushing Zidane. Zidane is booked, and will miss Friday's critical match vs. Togo. Totally ridiculous. The French have already been denied a legitimate goal, and we may have seen the last of Zidane. Nice one, FIFA**, nice one, referee.

**In the unlikely event that you care, but don't know this, a note: FIFA have instructed the referees to tighten up,and give more cards. Franz Beckenbauer has reportedly spoken out against the rash of cards, trying to return the game to a sense of normalcy. But both yesterday's and today's late games showed how card-happy referees can ruin a tournament.

Italy vs. USA, foul by foul 

The U.S. has a lifeline in the tournament, thanks to a hard-earned 1-1 draw vs. Italy in Kaiserslautern. This may have been the most important point in the modest history that is U.S. soccer.

It was a strange game, marred by the dismissal of one Italian and two Americans. But amid the tempest triggered by two rash challenges and a series of questionable refereeing decisions, this was a riveting match with plenty of football skill displayed by both sides, and crucial saves made by both keepers. The determined American performance, along with the crowd in full voice, suggest once again that soccer is coming of age in the U.S.

Reactions to this emotional match are all over the map. Italians, predictably, are down on their team. American TV commentators, predictably, went berserk over the two red cards given the U.S. by the referee. British opinion is split. The BBC's Chris Waddle agrees, at least in part, with the American view: "The officials were rubbish. This is the greatest football tournament in the world and they were not up to the job." But The Times' Rob Hughes referred to the game as "ugly," Eddie Pope as "aggressive" and "reckless." Mastroeni's challenge was "vicious," and he blamed Bocanegra for a challenge which effectively finished the night of Perotta. Hughes states that all three red cards were deserved, that the three yellows "could have turned the deeper colour," and that "Ugliness had finished the contest that neither side deserved to win."

I normally respect the observations of Rob Hughes, but his column made me wonder if we'd watched the same match yesterday. So I went to my Tivo and examined every foul committed in the match. Here they are, along with my commentary. I think that anyone who takes a close look at this match will find that Rob Hughes was off the mark in his column. This match had two bad challenges, a lot of good football, and a large number of questionable refereeing decisions (against both sides). I think Hughes owes both sides, and Eddie Pope in particular, an apology.

=======================================================
Minute Player Comment
10 sec! Pope Pushes Gilardino in the back, who takes a tumble
1 Donavan Handball
2 Reyna An Italian player falls, appears to be untouched; heavy booing ensues
3 Onyewu Pushes Gilardino, who falls
5 Onyewu Has hands on Toni, who flops
5 Totti Totti booked for tripping Dempsey; a harsh decision
6 Bocanegra Barges into Italian player on the sideline
9 Onyewu Body contact with back of Toni
11 Mastroeni Mastroeni slides in front of Toni missing the ball; Pope is behind Toni, who gets sandwiched
12 0 No foul here (though one was called) - that was a Totti flop
13 Cherundolo Outruns then steps in front of the advancing Zambrotta, who lowers his shoulder and gets the call
14 Nesta Scythes down Convey on the edge of the "D"
17 -- De Rossi's first aerial lunge into McBride goes unpunished
21 Pope Pope and Gilardino chase a long ball; Pope has his arm on the Italian's back; Gilardino has his elbow in the American's stomach with a fistful of shirt; they tumble. Yellow for Pope which is what Gilardino was aiming for the whole time. A soft yellow, about which the ref took plenty of time to reach for the card. Perhaps Pope was interpreted as the last man, but this was a harsh decision, presumably to even up the booking of Totti
22 Mastroeni Silly barge into Totti; leads to the goal
24 -- Interesting sequence. US free kick into the box; Buffon climbs over Cannavaro to clear and clobbers him; Cannavaro gets up immediately, but Nesta waves his hand to stop play, and Cannavaro dutifully falls back down
25 -- Cannavaro & McBride: physical clash over a 50-50 from Keller's kick; Cannavaro tumbles but is not told to stay down by Nesta & gets straight up
25 Perotta Mastroeni has been taking notes from the Italians, and falls over Perotta's idle left leg
26 Cannavaro Cannavaro fells Reyna on the touchline; leads to the US goal. Note: on the free kick, De Rossi barges into Bocanegra, taking him out of the play. By my count, this is his third foul in the penalty box in this World Cup, having committed two vs. Ghana in the opening round. This exposes a problem both with De Rossi's temperment and calling the game so tight in the rest of the field -- it exacerbates the double standard due to the refs' hesitation to award penalty kicks
28 De Rossi Throws an elbow into McBride's face; clear red card. Captain Cannavaro shoves the whining De Rossi off the pitch. Coach Lippi, who has apparently seen the same World Cup I have: "his umpteenth stupid mistake"



30 Toni Barges over Reyna
34 Mastroeni Tugs at Toni near midfield; Pope is involved too
35 Mastroeni Catches Pirlo's foot; Commentator Balboa says dive, but no complaint from Mastroeni
36 Toni Might have pushed Onyewu in battle for Buffon's long ball
38 Mastroeni Loses aerial challenge to Gattuso's barge; responds with dangerous high boot; first sign of the red mist falling on him
39 McBride Aerial challenge on Gattuso
40 Reyna Fells Gattuso
45 Mastroeni A mistimed challenge - he has the ball a split second earlier - but the tackle is a split second late, hence it results in a nasty set of studs on Pirlo's ankle. The ref wasted no time in reaching for the red card.
45+2 Onyewu Simple clash and Toni falls



1st Half Summary: The bookings to Totti and Pope were harsh. The US was physical but not nasty in the least, with the exception of Mastroeni's challenge on Pirlo. Even that, however, was mistimed but it was not with malicious intent: he was going for the ball and not the man, unlike earlier fouls from both sides. Had Mastoreni not just committed a string of fouls, he might have escaped with a yellow. I don't think the ref can be faulted for this call, however.






46 Onyewu Gilardino feels Gooch on his back and flops again
46 Pope Here is where the ref loses the plot. A great ball by Gattuso threatens to put Gilardino through. Pope's challenge fells him, and the ref does not hesitate to bring out the yellow. Reyna goes nuts. The ref pulls out his book, sees Pope's number in it, and pulls out the red. His quick trigger and lack of judgment, shown in the first half cards to Totti and Pope, is revealed again. This was not a bright line bookable offense. No studs, from the side, Pope gets the ball before his foot meets Gilardino's.
47 McBride McBride and Cannavaro leap for the ball. On the way down, McBride's boot catches Cannavaro's ankle. Ref gives a lecture to captain Reyna.
51 Dempsey Pushes Gattuso, who falls
54 Cannavaro Push on Dempsey, who falls
55 Conrad Has his arms on the back of an Italian player, who does not fall. Ref calls a foul anyway.
57 no-call Onyewu has his arm on the back of Toni, who puts it out of bounds instead of falling, thereby failing to get the customary free kick for an American arm on his back, and becomes briefly annoyed.
60 no-call Ball-to-hand of Nesta in the penalty area; right call.
65 no-call Perotta and Bocanegra clash, both diving for a 50-50. Perotta gets the worst of it and is hobbled for the rest of the match (and can't be substituted). Beasley's disallowed goal follows shortly. It would have been controversial since Bocanegra arguably should have put the ball out of play, rather than teeing up Beasley. McBride, to his credit, appears to inform Beasley that he'd obstructed the keeper.
68 no-call Gilardino flops, again, in the American "D" but fails to get his customary free kick
70 Zambrotta A ridiculous booking for a push on Cherundolo, who got past him, but was heading nowhere.
75 no-call Onyewu beats Gilardino again, who flaps the air in disgust.
75 Del Piero Chops down Cherundolo; not a nasty foul by any means, but that was the clear intent.
77 no-call McBride slides into Pirlo who wants a call but doesn't get it.
80 Zambrotta Climbs the back of an American on the corner.
83 Zambrotta Pushed Cherondolo attempting to get past him in the US penalty area.
89 no-call Conrad had a grip on Iaquinta's shirt in the box and concedes a corner. A penalty would have been harsh, but that was risky
89 Cannavaro Pushed McBride on the ensuing corner, who fell
91 Beasley Hand ball









Summary: The play This was a tense, emotional, hard fought match between two good, but not great sides. It had one bad tackle (Mastroeni) and one ugly elbow (De Rossi). The US was physically aggressive, but did not set out to tear the Italian's limbs and shins apart. Arena got the tactics spot-on by playing McBride alone up front, flooding the midfield and denying space to Italy. Italy got a few early calls by going to ground easily, but that tactic dried up in the second half.




The refs The refereeing was just generally poor, for both sides. Three bad offside calls and two undeserved bookings for Italy. Pope did not deserve to be sent off. One could make a case either way in the Mastroeni incident, but a quick trigger was evident here as well. The apoplectic reaction of the ABC commentators is par for the course. Soccer commentary should improve here in the future, although British reaction to the BBC's coverage reminds us that experience doesn't guarantee excellence. Rob Hughes' column in the Times was out of order. Let's hope it was out of character too.

Friday, June 16, 2006

White collar caddies 

This NYT ($) story by Selena Roberts gives only passing reference to what is - to me at least - the key driving factor, but nevertheless the facts are very interesting:
Nearly a dozen black American players were on the PGA Tour 20 years ago. Now, there is only Tiger. There are many reasons behind this -— like the economics of access to country clubs, but one is not so easy to comprehend: the demise of the black caddie.

"What strikes me is that when black players were allowed on the PGA in 1961, ending the Caucasians-only clause, there was an influx of players: Charlie Sifford, Lee Elder and Calvin Peete and so on — and they won 20 tournaments," said Orin Starn, a cultural anthropologist at Duke University who is working on a book about golf and American society. "All of these guys got their starts in the caddie shacks. That was their way in. And if you go back farther, caddying was a way for the poor, working class and sometimes immigrant kids to climb their way into the blue-blooded world of golf as with Walter Hagen and Gene Sarazen."

Somewhere along the way to riches in the Woods era, the blue-collar job of caddying went white collar, the lunch pail went executive dining room. "It's a new era," said Otis Moore, the caddie for Olin Browne. "A lot of players are letting brother-in-laws and cousins caddy for them. It's tough right now. You're an independent contractor."

Moore is one of the few black caddies left on the PGA Tour. He started his career at Augusta National Golf Club, which began allowing players to take their own caddies to the Masters in 1983.

This was supposed to be a sign of progress - an end to the black caddie in the white Augusta National jumper, a stop to Jim Crow memories and an end to subservient imagery -— but the move turned out to be unemployment for many minority-group members just as caddying became lucrative.
A drop from 12 to 1 in the number of black players is a startling figure. The proximate cause, I would argue, is the golf cart, which has replaced the caddie, a low wage job which was once attractive to young blacks.

Better employment opportunities associated with reduced discrimination may also play a role. But the long run effect of a decline in discrimination should be equalization of income and country club membership. Those factors should, over time, bring more black players into the game.

It is interesting that just being around the course, walking it with a bag, and playing opportunistically once helped black players develop sufficient skills to play on the tour. Ironically, improvements in technology and access to the labor market seem to have removed a key access point to the tour - working as a caddie - for black golfers.

Wednesday, June 14, 2006

Sunk Costs in Baseball 

A sunk cost is an unavoidable sacrifice: no matter what a person does, the sacrifice will be made and it's best to ignore them. JC points us to a great example of a baseball team making a rational decision by ignoring sunk costs.

The Arizona Diamondbacks decided Tuesday they would rather eat the remaining $22 million of Russ Ortiz's contract than keep him on their roster.

Ortiz is believed to be the most expensive player to be cut loose in baseball history.

The club designated the struggling right-hander for assignment, which means it has 10 days to trade, waive or release him. The team is on the hook for the balance of the $33-million, four-year contract Ortiz signed in December 2004, a figure general manager Josh Byrnes said was close to $22 million.

The 32-year-old Ortiz was 0-5 with a 7.54 ERA in six starts for Arizona this season, and he was 1-14 in his last 19 starts dating to last May.

"We're like most clubs: every dollar counts. You want to spend them as effectively as possible," Byrnes said at a Chase Field news conference. "That affected the decision, but we also were true to ourselves, and we want to put our best 25 on the field and try to win games. That led us to our decision.

Some may regard this as a waste of money, but regardless of Ortiz's position with the ball club, Diamondbacks officials can't avoid paying his salary. Playing him would be a waste of a roster space, something the officials have control over.

(cross posted at Market Power)

Upset Americans 

In a NYT-TS article ($) which defends Bruce Arena's team selection, if not tactics, George Vecsey makes a similar point to yesterday's post on "the long view:"
Outrage, Despair: Soccer Has Arrived in U.S.

.......Americans are upset because the Yanks stunk it up against the Czechs? That in itself is progress.
Outrage and despair? Welcome to the world soccer community, America.

Tuesday, June 13, 2006

Separating Cause & Effect in the U.S. Performance 

The post-match breakdowns of the U.S.'s whipping by the Czechs offered several factors. Some are just silly such as the U.S. has bad karma in Europe. One Soccernet piece offered up a more serious reason and one echoed in variants in articles yesterday and on Fox Soccer Channel last night:
What was missing? Emotion, energy and the requisite sense of urgency to be an elite World Cup team and they paid a costly price.
I think that this angle treats an effect as a cause. Separating cause and effect is often a tough nut to crack. As economists, we work hard to disentangle the two but sometimes find it a nearly impossible task. From my seat, it appeared that the U.S. came out with plenty of energy, emotion, aggressiveness -- probably too much in that the first goal resulted from an aggressively overlapping left back not getting any cover behind him. As further evidence, Onyewu took a pointless yellow card early on from hyped-up aggressiveness.

No, the team that showed up in Germany is almost identical to the one that beat Portugal in Korea and therein lies the problem. Against quality teams, the U.S. is only dangerous in the counterattack. This isn't Monday (make that Tuesday) morning quarterbacking. My main soccer consilieri, Reed Vesey, and I have been saying this ever since 2002 -- See my June 1 post. Portugal's and Mexico's tactics opened the door wide to our strength (Germany and South Korea to a lesser extent). The Czechs did not. They hung back, gave us room in the middle third, and then sprung their own counterattacks with devastating results. The lack of "emotion, energy, and urgency" that developed over the course of the game is the result of a team that can only counterattack in wide spaces limited to having to attack in limited space -- something that it is painfully obvious the U.S. cannot do well nor can any team with few (or no) players who can beat someone one-one-one in tight spaces.

Bruce Arena's decision to annoint Donovan and Beasley as offensive centerpieces of U.S. soccer over the past four years while freezing out Clint Mathis without having anyone available to take his place bore its fruit on Monday. For qualifying in CONCACAF, Arena's decision worked well, but facing a high quality opponent utilizing the right tactics exposed the downside. Arena starting freezing Mathis out even by the time of the last World Cup. The press bit on the "he's out of shape" business, and for four years nobody cared much. In March of 2002, in a "friendly" against Germany that evolved much like the Czech game yesterday, Mathis showed his metal versus a Donovan or Beasley. Not only was he the American attack, but he was everywhere winning balls and bringing energy, unlike the other two who were nowhere by halftime. The good news is that the U-17 and U-20 teams have players that should bring more dimensions to the U.S. attack down the road. The bad news is that they are not available for the Italy game.

The completely stunning aspect of U.S. showing for me were the set pieces and corners. If the other team's tactics do not permit counterattacks and you don't have a strong attack, then set pieces become the prime scoring threat. To its credit, the U.S. won several in the first half. Incredibly, Arena chose not to put balls into the penalty area. It was as if the U.S. women's national team came on for the set pieces. With McBride, Onyewu, and Pope on the field and the lack of attack, its hard to fathom the basis of Arena's choice.

I don't want to come across as anti-Arena. As Skip wrote, the Czechs are a high caliber opponent who played very well. Arena has raised U.S. soccer up to dominating CONCACAF (along with Mexico) rather than struggling to qualify and probably should have had Mexico's draw. The long view is very positive -- I'm just an impatient fan.

World Cup - the long view 

The U.S. performance yesterday was not as miserable as the Czechs' was brilliant. And only here in the States, where the hype machine was in full swing, was the result (if not the 3-0 scoreline) anything other than what was widely expected.

The U.S. was dealt a murderous draw when they, and not Mexico, were relegated to the pot of also-rans, despite beating Mexico in both the 2002 World Cup knockout stages and in this year's qualification. This was due to the washout in France '98. FIFA employs a seeding system (in contrast to their superfluous rankings) with an excessively long memory. It is a system which perpetuates the advantage of the old soccer powers, and one that the African nations as well as the U.S. should work to change.**

The task of the U.S. this year is now monumental. Italy looked solid in beating Ghana 2-0 and should take care of business on Saturday against the U.S. And Ghana attacked the Italians with a verve missing in the U.S. performance; beating them won't be a simple matter. I reckon the bookies will price a U.S. win in the final match at better than even money. So an early exit from the tournament looks quite likely at this point, but it would not be a disgrace. In 2002, defending champ France went home early (without a point!), along with pre-tournament favorites Argentina and Portugal. It happens to the best teams, as well as to a developing team like the U.S.

Despite the dismal forecast, I'll be watching anyway, hoping for a miracle against the Italians. And judging from this WSJ story, interest in the World Cup may be stronger than portrayed by American sportswriters:
More than half the TV monitors on some trading floors at Deutsche Bank AG's New York offices -- including the sets in some executive suites -- were tuned to the U.S. game yesterday, with periodic eruptions of emotion. (Mostly despair, as the U.S. team lost, 3-0.....) At J.P. Morgan Chase & Co., where TV screens have been split fairly evenly between financial news and World Cup games, employees displayed miniature national flags at their desks. ...

Some employers are taking pre-emptive measures to keep employees focused. Fifteen percent of companies said they were blocking Internet content related to this year's World Cup, according to St. Bernard Software Inc., a San Diego-based Internet security company, who surveyed more than 250 companies.

Others are pandering, purchasing pricy plasma sets and throwing parties to boost morale and get employees to come to work. McDonald's franchise owner Paul Cottrell upgraded the cable service for 10 of his 16 New Jersey franchises and installed hanging televisions in some dining and break areas. "It provides an incentive to say, 'We have it here, so don't even think about staying home,' " he says.

To prevent staff from ducking out during office hours, executives at InFocus Corp., a maker of projection equipment, decked the elevator banks and lobbies of their Wilsonville, Ore., headquarters with plasma TV sets broadcasting the games. "It means that they go in a bit earlier, can work normally and see the game as they go around the office," says chief marketing offer Scott Ballantyne.
The outlook for the U.S. team at this World Cup appears bleak, but these are signs, I think, that American interest in soccer continues to build.

**Note: Question to readers: does the system take any account of strength of schedule, or is it just where among the 32 teams you finish on points?
Answer from Nick in the comments: "no account is taken of strength of schedule."

Wednesday, June 07, 2006

I Guess Sports Economists Will Always Have A Job... 

My favorite principles teacher used to start all of his "real world" lessons with, "I guess economists will always have a job." He would then use a modern example that economists had beaten up in earlier episodes, but the example was still there anyway.

Looks like the same is true for sports economists. Witness this article in The Tennessean about UT women's basketball coach Pat Summit cracking the $1 million mark. We start with:

"Let's say your business is barely scraping by, turning a profit of less than $30,000 last year.
But the board of directors votes to give the boss a raise to $1.125 million next year. Does this make sense? Of course not. But this is intercollegiate athletics, where dollars and sense often fail to merge."

As I've posted and discussed before, and as many sports economists have continued to reiterate, you don't look for the returns of the division of a company (women's basketball in the UT athletic department) just on that division's own bottom line. First, there is no profit incentive in the true sense of that word so all sports have the incentive to plow their revenues back into their own activity. Second, women's sports have contributions that simply are not captured by their net revenue. Not the least of these is Title IX compliance; failure to comply (even though enforcement is pretty weak) puts hundreds of millions of dollars at risk at most major universities so that the coach's MRP doesn't rest only on winning and net revenue.

Then we get the report that Summit makes more than the UT men's basketball coach even though the men's team "cleared" over $1 million. But why stop there? The article also reports that the UT football program cleared almost $20 million and that coach "only" gets about $2 million. More of the same awful accounting from the economic perspective and a complete failure to note that most of that money is earned at the expense of players that don't receive pay beyond their in-kind (and typically zero marginal cost) tuition/room and board subsidy. Sigh.

But the worst is yet to come, and I'm not picking on the author of this article because it's just an example of widespread economic illiteracy (or purposeful shenanigans to confuse sports consumers). The author speculates that the UT program is headed toward a truly thorny issue of which coach to pay the most, especially given the coaching market salary pressures:

"Problems lie ahead. Pearl (the new and highly successful men's basketball coach) is on the fast track. With his coaching style and salesman personality, he will become a hot commodity for top-level programs in upcoming years, which will force UT to up the ante to keep him.
When that time comes, will the Vols' powers-that-be feel compelled to keep Summitt's salary in line with Pearl's? It is no secret that there is an arms race in college athletics. But UT has an arms race of its own." (I added the parenthetical for clarity.)

I won't go into the reasons I've enumerated previously about this "arms race" nonsense. The truly insidious problem here is that if it is said often enough, it comes to be believed. [Remember the urban legend claiming that domestic violence increases during Super Bowl weekends?] Maybe somebody should write something from the economic perspective laying all of this bull**** to rest; Oh, that's right, I already have (Chapter 13 in my textbook Sports Economics). But I guess my ol' professor was right. We will always have a job.

Short England 

There are many betting pools for the outcome of the World Cup. The enthusiasm in England is so high, I can't imagine they haven't overbid the price of an England win. My best guess is to short England.

But then the enthusiam is probably equally high in other countries. I wonder if there is enough slack in the betting markets around the world that there are opportunities for arbitraging the bets internationally.... The betting lines are different, but I don't know enough about these markets to know whether the odds are different enough to compensate for the transaction costs in placing myriad bets with different agencies.

Here's the BBC link for one the pool that got me interested in this topic. [h/t to Brian Ferguson].

Interestingly, Tradesports.com has England as the second-highest favourite among the bettors, behind Brazil. In contrast, a projection reported in The Observer last weekend ranked the English team only 9th in expected probability of winning the world cup; it also ranked the French team second, saying it is much stronger than people were giving them credit for, and that Brazil, despite being the strong favourite, is perhaps not such a strong favourite as many make them out to be. That prediction, based on expected goals for and expected goals against, gave Brazil only a 13% chance of winning the World Cup this year. [The article is titled, "P(n) = λne-λ over n! is the formula for World Cup success"]
Decision Technology, a firm of prediction experts who claim to be the best in the business, has invented a computer program that boasts a better record than any bookmaker, pundit or sports tipster. While most bookmakers rank England as second favourites behind Brazil to land football's greatest prize, Dectech ranks Sven-Goran Eriksson's side [i.e. England] ninth in the list it has produced to estimate the chance each of the 32 teams has of lifting the trophy. Brazil have the highest probability at 13.1 per cent.

In a statement that will not readily make the first line of a new football chant, Dr Henry Stott, firm director and visiting fellow at Warwick University, said: 'Our modelling technique involves maximum likelihood estimation and a kind of rational probabilistic analysis to predict what the outcome of a match will be.'

The computer has studied the scorelines of 4,500 games between 200 countries since 2002 and come up with forecasts for every match at the initial group stage.

'England have an easy group and so an 80 per cent chance of reaching the knockout stages. After that the games against tough opposition such as Germany and Argentina come thick and fast. That's why we have made them only ninth favourites to win. With or without Wayne Rooney,' said Stott.

If the system is as accurate as its inventors claim - it has correctly called 53 per cent of Premiership matches since 2002, better than anyone else - fans can stop relying on hunches, advice from friends and listening, for example, to newspaper tipsters, who score a measly 43 per cent.

Stott says anyone seeking to make a profit on events in Germany should back France, Holland or the Czech Republic, whose chances, he says, have been underestimated.

According to Stott and his colleagues, a combination of science and mathematics shows that, after Brazil, the next nearest favourites are France, who did not score a goal at the last World Cup, Germany, who [sic] even Germans admit are an unexceptional team, and Holland.

Digression: Recently Ms. Eclectic and I wanted to buy some English flags to hang in the window of our flat and saw some we liked in a storefront, so we went in to buy them. It turned out the storefront was a betting parlour, and we had to place five-quid bets each in order to receive a "free" flag.

Believing that England and Germany had been overpriced here in England, she bet on Brazil and I chose the Czech Republic to win the World Cup.

Tuesday, June 06, 2006

"Sports Sentiment and Stock Returns" -- World Cup Edition 

Edmans, Garca, and Norli (forthcoming in the Journal of Finance) document an impact from losses in the World Cup on the wealth of a country's shareholders:
We document a strong negative stock market reaction to losses by national soccer teams. The size of the loss effect is economically significant—in monthly terms, the excess returns associated with a soccer loss exceeds 7%. We find a statistically significant but smaller loss effect for international cricket, rugby, and basketball games. There is no evidence of a corresponding reaction to wins in any of these sports.

The finding that the effect is not priced into the index when a loss is highly expected leads us to reject the view that the loss effect stems from the reaction of rational investors to cash flow relevant information. Instead, we interpret the effect as resulting from the impact of sports results on investor mood. There are several justifications for this interpretation. First, soccer results have been demonstrated to impact mood but have little direct economic impact. Second, the effect is more pronounced in countries where soccer is especially important, for games in the World Cup, and for elimination games. These important matches are precisely the games with greatest mood impact. Third, the effect is especially large in small stocks. Small stocks have been previously found to be especially sensitive to investor sentiment, and are predominantly held by local investors, whose mood is affected by the performance of the national soccer team.
I think the extension of a daily blip of 38 basis points to a monthly horizon overstates the magnitude of mood on stock prices, but the effect is clearly there. One anecdote: my wife and daughter were in Italy during the 2002 Cup, and the failure of the team to make the knockout round threw the country into a weird mix of anger and mourning.

Update: In the comments, Pablo Halkyard notes his page, chock full of links on Economics and the World Cup (inluding the paper mentioned here). You can add a bunch more from this post at his PSD blog.

Monday, June 05, 2006

Bias and "Arm Abuse" in NCAA Baseball 

This post has two subjects: bias in the NCAA selection process and the "abusing" of pitchers by NCAA baseball coaches. Skip brought up the notion of bias in selecting teams and seeds in the NCAA D1 baseball tournament.
Notre Dame's baseball team has put together a fine season, compiling a record of 45-15-1, and winning the Big East's regular season and tournament championships. But having been seeded third, behind Kentucky (45-12) and the College of Charleston (43-15) in the Lexington regional, the Irish have dialed up the bias-o-meter.
There was some question on whether the Missouri Tigers should have gotten into the tournament at all. They were a top-10 pick in some polls coming into the season, but they didn't live up to their billing, finishing the regular season at 31-25 and in 7th place in the Big XII. But like the folks that select the 65 teams for the basketball tournament, the folks that pick the baseball teams take more than record (31-25) into consideration. Missouri's star pitcher, Max Scherzer, slammed his hand in a car door immediately before the season began and later developed tendinitis. The tendinitis seemed to affect the whole team, and they went through a mid-season slump.

But they finished the season on a strong note, sweeping Texas on the final weekend of the regular season and then beat Oklahoma and Oklahoma State in the Big XII tournament. They lost to eventual Big XII Tourney champion Kansas, a loss that some thought knocked them out off the bubble.

But noting the injuries, the conference in which they play, and the strong finish they had, the Tigers were allowed in, one of the last teams to make the tournament. This wasn't about cash flow and attendance at the regionals. This wasn't a 6-6 Nebraska football team being selected for a bowl game because of the reputation Husker fans have for travelling everywhere to see their Tigers play. The Mizzou baseball club has a loyal but smallish following. If there is any bias it's conference statistical bias - playing in the Big XII helped push Mizzou on the right side of the margin.

Now they play Pepperdine in an elimination game for both teams today and Mizzou coach Tim Jamieson has a tough decision to make: should he pitch staff ace Max Scherzer today on two days rest? We often hear about college coaches "abusing" their pitchers' arms, and there aren't many arms out there more valuable than Scherzer's:
There is nothing more that Max Scherzer can do. Just hurry up and wait, really, for what is the most important moment of his promising baseball career.

Baseball scouts are a fickle bunch, and they like their top picks without baggage. There is perhaps no worse baggage for a pitcher than arm trouble, so Scherzer, a 6-foot-2 210-pound right-hander, probably will fall a bit to perhaps the middle of the first round — even as he lights up radar guns at 99 mph after the tendinitis.

...With Missouri still alive in the NCAA postseason, Scherzer is 7-2 with a 1.95 ERA, 72 strikeouts and 23 walks in 73.2 innings. That’s good, no question, but not quite up to the incredible standard he set as a sophomore when he was the Big 12’s pitcher of the year, going 9-4 with a 1.86 ERA, a school record 131 strikeouts in 106 1/3 innings and a preposterous .211 slugging percentage against him.
But his injuries may have dropped his draft status:
That means that depending on when Scherzer becomes the first first-round pick in Mizzou history, his fall from the first few picks to perhaps the middle of the opening round could cost him seven figures of signing bonus money.
It's understandable why Jamieson would want to pitch Scherzer today.
  1. It's an elimination game
  2. Scherzer likely won't pitch for the Tigers again if the Tigers lose this game
  3. Nathan Culp, their second-best pitcher (who ain't too shabby), pitched on Saturday and almost suredly is out for today.
Most of the costs of pitching today seem to be borne by Scherzer. Sure, if Scherzer does get drafted in the first round, that is something Jamieson and his coaches can play up on the recruiting trail, but my guess is that won't have much of an effect on any potential recruit.

Even if he pitches and doesn't get seriously injured today, the wear and tear on his arm may show up at a future time, hurting his potential Major League career. But how could anyone in the future point back to one particular day's unnoticeable wear and tear as the day the turned the tables?

A rested Scherzer would seem to be Jamieson's best option, but Scherzer's probably not all that rested. But if Scherzer tells Jamieson he's good to go, how could his pitching be termed "abuse?"

Sunday, June 04, 2006

Commenting on the NBA Finals 

Also posted at The Wages of Wins Journal

The NBA, relative to the other major sports leagues, tends to suffer from a lack of competitive balance. One way to see this, though (as I have noted before) not the only or perhaps the best way, is the distribution of championships in The Association.

The following cities have hosted an NBA champion in the past 50 years: Boston, Chicago, Detroit, Oakland (Golden State), Houston, Los Angeles, Milwaukee, New York, Philadelphia, Portland, St. Louis, San Antonio, Seattle, Washington D.C.

All in all, fifteen cities are on this list. And that includes St. Louis, who has not hosted an NBA team in almost 40 years.

The following cities have an NBA team but have not held a championship parade in the past 50 years: Atlanta, Charlotte, Cleveland, Dallas, Denver, Indiana, Memphis, Miami, Minneapolis, East Rutherford (New Jersey), New Orleans, Orlando, Phoenix, Sacramento, Toronto, Salt Lake City (Utah).

All in all, sixteen cities are on this second list. And that ignores the LA Clippers, a franchise that has failed to bring an NBA title to Buffalo, San Diego, and Los Angeles.

This year, one city on the “never won” list gets to host a parade. Either Miami or Dallas will win the NBA championship. So a new member of the championship fraternity will be welcomed.

Crowing a new champion is not the only news from the 2006 NBA Finals. As I noted a few weeks ago, there is a tendency in the NBA – more so than the other major North American sports leagues – for the eventual champion to be among the very best in the regular season. Specifically, in the past 50 years 80% of teams winning the NBA title had either the best or second best record in the NBA regular season.

Although one of the best regular season teams taking the title is a tendency we see in the data, it is not an iron-clad rule. And this year that tendency will not hold. The Mavericks had the third best regular season record, while the Heat posted the fifth best mark.

Of these two, who should be favored? The Mavericks posted the better regular season record, but the difference might be deceptive. One of Miami’s most productive players – Shaquille O’Neal – did not play in 23 regular season contests. Had Shaq played the entire season the difference in the regular season records of these teams would have been smaller.

Still, despite having a healthy Shaq, the odds are stacked against Miami. For the first three rounds of the playoffs the NBA utilizes a 2-2-1-1-1 playoff format. First two games on one team’s court, then the next two in the other team’s arena, and the last three games go back and forth.

Since 1985 the NBA has changed the format for the Finals. In the Finals the format is 2-3-2. Since going to this format the team with home court advantage has won 16 of the 21 Finals contested. That works out to a 76% success rate for the team with the home advantage.

Why the steep odds for the team without the home court advantage? Even if the Heat take one of the first two games in Dallas, the Heat would have to win three straight games in Miami to avoid sending the series back to Dallas. In other words, Miami has to win the series 4-0 or 4-1 to avoid trying to win the title on their opponent’s home floor. So the Heat are battling steep odds.

Of course these are only odds. Although the tendencies we see in the data go against the Heat, these are only tendencies. And given how other playoff trends in the playoffs have fallen this year, perhaps the Heat can count on one more tendency to falter this June.

Friday, June 02, 2006

An assertion of bias 

Notre Dame's baseball team has put together a fine season, compiling a record of 45-15-1, and winning the Big East's regular season and tournament championships. But having been seeded third, behind Kentucky (45-12) and the College of Charleston (43-15) in the Lexington regional, the Irish have dialed up the bias-o-meter.
[ND Coach] Mainieri said he believes the Irish and other schools from the North are perennially underrated by the NCAA and hurt by low RPIs. The problem, Mainieri said, is it's difficult to get midweek games with schools from the South or the West and many weekends are tied up with conference games.

"It's a self-perpetuating problem. The teams from the North aren't rated high, and when we play them it keeps us from being rated high," the coach said. "It's just a flawed system and it's very protective of the power conferences -- the SEC, the ACC, the Pac-10 and the Big 12. And nobody can break into that cocoon."
Now, the facts are that baseball talent is concentrated in the south and west of the country. My hunch is that this stems in part from the fact that good players from the northeast are familiar with the weather at home. Be that as it may, compare the conference standings of the Big East, with, say, the SEC. The clubs which the Irish feast on each year look pale in comparison with the bottom dwellers (Auburn and Florida!) of the SEC. How good is 45-15-1 vs. Big East opposition? I don't know.

Regardless, Coach Mainieri's claim of bias seems rather straightforward to test with data from the NCAA tournaement.

Update: It's not proof of anything (other than my own skepticism of the bias charge), but here's today's final:
Notre Dame ..............4
College of Charleston...5

Comparative governance in sport 

Different models of forming and enforcing rules of competition exist on the two sides of the Atlantic. In the U.S. leagues define and interpret the rules more or less on their own - at least until their interpretation runs afoul of congressional aspirations to intervene. In European soccer, the leagues are subject to oversight from the football associations, providing the "back pages" a steady drumbeat of hearings, fines, appeals, suspensions, and alleged controversies to report on.

This weeks' news brings two stories which highlight the costs and benefits of the two models. The first relates to enforcement, and the use of video evidence. In England, as I presume all of Europe, the system gives maximum deference to the referee on the pitch. Video evidence is used to alter a disciplinary decision only on rare occasions, and significant injustices can result. The Robben-Reina incident in the Chelsea-Liverpool match is a clear example. Reina gave Robben a pat on the cheek during a melee, which Robben took as an invitation to fling himself theatrically to the ground. Robben's dive delivered a red card for Reina, and apoplexy to Scousers, Chelski-haters, and moral opportunists in the press. (My view: the sending off was unjust, and an error in judgment by the referee, who was conned.)

Yet Liverpool, despite their furor, declined to appeal the automatic three game suspension. That's a very harsh sentence for a trivial offence, indeed, it was a sentence that the system was tricked into delivering. This may not be the ideal example, since some viewed the referee's decision as technically correct, even though unjust. But it does illustrate the English system's clear deference to decisions made by the man on the spot, even if video evidence is available to "right a wrong."

So who needs video, you ask? Answer: the Big 12 Conference, on the west side of the pond. Apparently, if the act was not caught on tape, the rules need not be enforced. At least that is Dennis Dodd's interpretation of the Big 12's response to a bench-clearing brawl between Kansas and Missouri in the semifinal game of the conference's baseball tournament. Despite widespread mayhem, only the two initial protagonists were given one-game suspensions. But the latenight game was not on television, so there is very limited video evidence. Dodd quotes Big 12 commissioner Kevin Weiberg saying "There's no question if you had a clear incident of widespread ... punches thrown, if we [had] appropriate video of [the] incidents, we would have taken appropriate action." Gotta have that video!

On the issue of comparative governance, the key point is the party responsible for judgement in this case - the Big 12 Conference - and the conference's incentive not to take action. The NCAA tournament begins this weekend, and mass suspensions would have crippled both squads before college baseball's big show. Was Weiberg looking our for the conference's monetary interests when this took place?
In the frantic minutes after players were separated, commissioner Kevin Weiberg huddled with subordinates, the conference umpire coordinator and stadium personnel to make a call.
Unlike the English case, this one was not handled by the umpires on the field, nor by an agent charged with serving the larger interest of the game of college baseball, but by the boss of the conference who is managing matters for the best interest of the Big 12. It's the American way. Yet if Weiberg's English counterpart had acted this way, it would be a major scandal.

Whether justice was done in either the Robben or Weiberg case can be debated, but in both cases I favor the English way of doing things, where the lines of authority are clear. Nevertheless, the English way comes at the cost of replacing the more narrow interest of the conference or league commissioner, with loyalties that while imperfect are well understood, with those of the nebulous Football Association, who have been arguing over the nature of their obligations for a century. Increase the geographic scale of the governing body to Europe (UEFA) and the globe (FIFA) and you magnify the potential for excessively centralized, inefficient rule-making.

There are several costly restrictions that stem from these supra-national governing bodies. The rule which sanctions only leagues with teams from a single country inhibits ambitious clubs like Ajax (Holland) and Celtic (Scotland) from creating more interesting, and more balanced competitions with like-minded clubs abroad. A new rule came to light yesterday when BBC Newsnight broke the story that FIFA is investigating "whether Arsenal have broken regulations which may leave the club exposed to possible expulsion from the Champions League."

The charge is that Arsenal secretly purchased an interest in Beveren, a Belgian Club that was in financial trouble at the time. FIFA rules prohibit any club having more than a fifty per cent interest in another club in the same competition.** The story reports that Arsenal's money placed a "shadow director" on Beveren's board. Add a series of concealed payments in the often shady transfer market, and the stench quotient rises to TV exposee' level.

What is known is that Beveren are a selling club (i.e. they seek to profit from developing players for teams with more realistic chances of winning titles), that Arsenal have a contractual relationship which gives them an inside track on the African talent that Beveren brings to Europe, and that the financial arrangements surrounding this flow of talent is a continuing source of controversy.

If it sounds to you like Arsenal are trying to replicate elements of the farm system in major league baseball you are right. But European rules severely restrict this sort of integration - i.e. Arsenal taking control of what is essentially a minor league (A or AA perhaps) team. Because of the difference in rules and governance between the States and Europe, what is standard operating procedure over here can be portrayed as scandalous in England. And the English do love their scandals.

** Footnote: The concern is allegedly for the integrity of competition, should the two teams be scheduled to face each other. This could only happen between Beveren and Arsenal in the UEFA Cup or Champions League. But the matter is easily addressed contractually, with Arsenal gaining preference in the unlikely event that both clubs qualify in the same year.

Thursday, June 01, 2006

World Cup Thoughts and Questions 

England fans reportedly booed Bayern Munich's Owen Hargreaves as he entered the friendly against Hungary this week. With the inclusion of the very young and untested Theo Walcott, criticism of the Hargreaves selection has taken a back seat but has been quite widespread. This BBC Sport article discusses it. Former England manager Graham Taylor chimed in. Fox Sports' Bobby McMahon derided the choice and now England fans boo. What gives? Former England and Budesliga star Tony Woodcock defended Hargreaves saying,

You don't play for Bayern Munich - and they've got a star-studded line-up - in one of the leading teams, let alone clubs, in Europe with having any sort of qualities ... To be playing in the same midfield as Michael Ballack says a hell of a lot and I'm sure Owen has outshone him a few times this season.

As widely noted, Hargreaves is very versatile -- one Sven Eriksson's stated reasons for choosing him. Ironically, it may hurt his performances since he usually plays the role of utility man.

The question that crops up for me is why such a strong "in-country" bias exists. If Hargreaves played in England for Tottenham, let's say, I doubt any criticism would arise. As Woodcock notes, getting regular playing time and playing well at Bayern is no small credential -- a fact that would seemingly be widely understood by every English soccer fan. The negative press and fan response seems linked to his lack of in-England pedigree. He's Canadian but eligible to play for England by virtue of his father's birth. He has played his entire career in Munich. Beckham and Owen have been out-of-country but were well-established legends by the time of their foreign excursions.

As an extension of the same sort of question, why do some countries (coaches or fans) appear to have a strong "in-country" bias in the selection of players? Italy, for instance, is well known for selecting only players playing in Italy -- a fact that keeps most players with at home. Brazilian players, by contrast, range all over the world. I would be interested in views of other bloggers or readers.

As for the U.S. squad, even with several injuries, the back line appears stronger than in 2002, the goalkeeping will be solid, and there is more depth in the midfield. McBride, Beasley, and Donovan are all back. Nonetheless, the biggest weakness in the U.S. attack in 2002 has only expanded -- a guy who can run at the defense with the ball and finish from the top of the box. In 2001, Clint Mathis was this guy, but his injury limited his contributions in South Korea. Still, he pumped in a critical goal of the very sort that I just mentioned to help gain the tie against South Korea. With his demise, no one has stepped up and Arena did not elevate a younger player who might offer an important 20 minutes to play this role.

My final question is this -- why in the world is Landon Donovan taking any set pieces? There are players more skilled at the U17 level much less on the World Cup squad. One of Soccernet's writers recently asked the same question. A few weeks back, I put the question to a different Soccernet writer who expected Donovan's tenure on set pieces to end as more players came into the squad, but they have not. Is Nike paying Arena on the side? Donovan is good for one decent (not great, just decent) delivery out of three, one mediocre, and one worm-burning, chili-dipper. I'm embarrased for him and U.S. soccer half of the time. What's going on?