Tuesday, March 23, 2010

MIT Sloan Sports Analytics Conference 

Watching NBA highlights last night on NBATV, I stumbled across this video story on the 2010 MIT Sloan Sports Analytics Conference. Daryl Morey, GM of the Houston Rockets, helped establish the conference (now in its 4th year) that includes a variety of owners (Mark Cuban, Robert Kraft), GMs, coaches, and statistical assistants. Panels cut across a variety of on-the-field analysis (basketball analytics, baseball analytics, limits of analytics) as well as off-the-field issues (attendance, expansion, and others).

Data-oriented sports analytics now appears to be in mid-stream when viewed along Zvi Griliches S-Curve for the spread of innovations. When Moneyball appeared in 2003, it chronicled some of the earliest innovators. In looking over the conference panels and the NBA's website articles on the nature and uses of "analytics" in their area, the fingerprints of the Moneyball-"metric" approaches are explicit. Of course, a generation or more earlier, the contributions in Sabermetrics as well as in sports economics-statistics like that of Rotemberg, Scully, Quirk-Fort, and others began plowing this soil, even if those works don't receive much explicit attention. After all, Bill Walsh may receive most "mentions" for modern passing schemes while Coryell and, even earlier, Sid Gillman did much of the early development.

With that said, there are a lot of sports-focused "metrics" out there with little or no connection to economics or economists. That's healthy. Statisticians with different training bring their own comparative advantages to the table. In looking over Chance or the American Statistician, it's clear that statisticians (math stats types) tend to focus much more heavily on distributional issues than economists. Others, like the StatCube outfit mentioned in the NBA article, specialize in the collection and management of data.

Do economists have a niche even beyond academics and in the "engineering" type data analytics discussed at the conference? I think so. The background of economists gives us some advantages at disentangling (identifying) specific relationships, thinking in terms of omitted variables, and other model-building skills. (See 2009 TSE piece on ECONFL.) Like other data-oriented disciplines, econ also contributes by raising awareness among undegrads (like Bill Belichick and Jim Schwartz) for what data analysis can do.

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Sunday, December 13, 2009

The Short Supply of Tall People is Getting Longer 

From a past entry from Dave Berri's Wages of Wins Journal:
The statement about competitive balance reflects an argument offered in The Wages of Wins. Specifically, we argue – following the lead of the late evolutionary biologist Stephen Jay Gould – that competition in sports is driven by the size of the underlying population of talent. As the talent pool expands, sports leagues become more competitive.
Economists sometimes use the Noll-Scully measure of competitive balance, the actual standard deviation of win percent divided by the "idealized" standard deviation of win percent. This measure tells us how spread out wins and losses are within a league. The closer this measure gets to one, the more balanced the competition in the league.

Because it is adjusted for the length of the season in terms of games, we can make comparisons between leagues. Comparing this measure between the NBA, the NFL, MLB, and the NHL, the NFL has the most balance, followed closely by MLB and theNHL. Why the competitive imbalance in the NBA? Dave Berri again:
At the other end of the extreme lies the NBA and the ABA. Each of these leagues is less competitive than any other league considered. At first this seems odd, since basketball is possibly the second most popular sport in the world. The problem with basketball, though, is not the population of people who are interested in playing. To play basketball you can’t just be interested. To play basketball at the highest level you generally have to be tall.
And there just are not that many people that tall and that athletic, relatively speaking.

But as has happened in other sports, the talent pool is growing. The hot region now is Latin America:
"You just didn't see many kids from Latin America then," Chaney said. "There were a few around — I think (N.C. State's Jim) Valvano had one — but there just weren't many Latino kids around. Now, you see them popping up all over."
I remember watching the Oklahoma Sooners basketball team back in the late 1990's when they had Eduardo Najera and Victor Avila, both Mexican natives, on their roster. Najera was the second Mexican drafted into the NBA and has had a good career in the NBA.

The article notes the US Olympic Dream Team as the start of the interest in basketball in Latin America. It will be interesting to see, as these some of these players filter into the NBA, if competition becomes more balanced as we've seen in other sports.

Addendum: here's a little more Noll-Scully goodness, applied to the NHL, from Stacey Brook, one of Dave Berri's co-authors (along with Martin Schmidt) on the Wages of Wins.

Update: missing Stacey Brook link is now there. Thanks tp reader Phil!

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Tuesday, September 29, 2009

NBA Locks Out Referees 

Labor relations in professional sports are notoriously contentious. Nobody gets along. Players strike, owners lock out players, referees strike, owners lock out referees; it happens all the time. Labor disputes in professional sports almost always revolve around the periodic renewal of collective bargaining agreements (CBAs) - contracts between leagues and unionized employees that specify all the details of the employer-employee relationship - that usually last five years or so.

The latest chapter in this sad saga pits the NBA against referees. Negotiations between the NBA and the National Basketball Referees association (NBRA), the union that represents NBA referees, broke down last week and appear to be stalled. The points of contention are the usual suspects: wages, travel benefits, and retirement benefits. The NBA wants to scale back pension benefits and keep wages flat over the life of the CBA, citing the effects of the recession on revenues. The refs want this CBA to run only two years, instead of the usual five, so that they can re-negotiate in an improved future economic climate, and, of course, want wage increases.

One unusual feature of this labor dispute is that the NBA has released information about their offer to the press, probably in an attempt to force the NBRA to settle. These details are seldom made public, an the NBRA is crying foul (sorry, I couldn't resist). The NBA claimed that entry level referees make $150,000 and experienced referees make upward of $550,000. The union claims that entry level salaries are $91,000 and experienced referees make less than $400,000. The severance package paid to retiring referees, reported to be $575,000 by the NBA, is also under negotiation and a matter of dispute.

The NBA will open the season with non-union referees, drawn from the WNBA, the NBA development league, and other places. The same thing happened in 1995, the last time the NBA and the NBRA couldn't agree on a new CBA. Because reasonable substitutes for NBA referees exist (it doesn't take a highly trained expert to let NBA stars get away with walking and palming the ball), it seems unlikely that the NBRA can hold out for too long. Referees don't have as much bargaining power as players in labor negotiations.

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Thursday, June 11, 2009

Cool video on point differences in the NBA 

At the end of regulation, tied scores are about twice as frequent as what you would expect from a strategy-free, i.i.d. scoring model. Using data from the last 13 years of NBA games, Cheap talk (a blog by two professors at Northwestern) presents a video which depicts how the spike emerges at 0 in the point difference distribution, over the last 40 seconds of the 4th quarter. A similar video shows that no such spike emerges at halftime -- a great visual demonstration that strategy matters.

Thanks to Patrick Warren for the link.

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Wednesday, June 03, 2009

Economics of Sportsmanship 

Yahoo! Sports' Adrian Wojnarowski blasted LeBron James for his behavior after the Magic series and his "explanation" of it the next day:
I’m a winner, King James proclaimed. So, there you go. That’s his reason for rushing out of the conference finals without so much as a nod to Dwight Howard(notes) and the Orlando Magic. That’s his reason for marching to the bus and letting the Cleveland Cavaliers’ spare parts take care of his responsibilities in the interview room.

Funny, but James stayed on the court to make sure the Detroit Pistons and Atlanta Hawks paid respect to him. As it turns out, there’s one thing allowed to happen at the end of a playoff series: Everyone bows down and kisses the King’s ring. Only, LeBron doesn’t have a ring. He’s never won a game in the NBA Finals. So, yes, maybe they just have to kiss his feet.

It’s not being a poor sport or anything like that,” James said. No, nothing like that. Yes, James cares so much that it isn’t possible to be gracious and humbled. You know me, he told the reporters in Cleveland on Sunday. I’m a competitor. “If somebody beats you up, you’re not going to congratulate them,” James said. “It doesn’t make sense for me to go over and shake somebody’s hand.” Here’s the question: Who has the guts to tell him that he sounds like an immature, self-absorbed brat? Here’s the problem for the Cavaliers and James: No one.

As a fan, I mainly agree with Wojnarowski and find James' rationalization even more of a turn-off than his initial actions.

As an economist I'm intrigued by the widespread nature of sportsmanship standards. The exact threshold for good and bad sportsmanship differs across individuals and tends to be influenced by a variety of variables including the specific sport along with fan age, urban/rural, income, nationality, or ethnicity. Despite nuances across individuals, sportsmanship seems to be part of wider moral/ethical standards. Leagues codify some standards, assessing penalties for "unsportsmanlike" behavior such as fighting, excessive griping to the referee, or taunting of opponents. Many of the sportsmanship standards, however, exist outside of league rules. For example, trotting around the basis at a decent clip after a home run or shaking hands after games or series (in league rules in many youth leagues but not in pro leagues).

What useful purposes might such sportsmanship standards encourage? Sports competition at the most basic level requires cooperation between competitors ("Co-Opetition" to use the term coined in the Brandenburger-Nalebuff book) or "I'll take my ball and go home." Leagues sportsmanship rules and practices may help promote build some degree of goodwill and limit some destructive conflicts.

Why do fans care? It is harder to come up with a narrow, utilitarian explanation for fans. Here, it seems that a desire for "fair play" and "good sportsmanship" is connected to deep-seated moral/ethical outlooks -- the promotion of broad "civic virtues" such as as fairness, self-restraint, humility, awareness of others ...

Whatever the basis, a lot of fans are turned off by the chest-thumping, big celebrations of minor accomplishments, and petulance. Sports leagues indulge bad behavior at their own risk. I'm personally acquainted with many sports fans who no longer watch a particular pro league because of "unsportsmanlike" displays. Why do league reps (like David Stern in James' case) or some in the media defend bad displays of sportsmanship and even seem to encourage some of it as adding flavor to the games? The simplest explanations is that they view their wagon as closely hitched to the player or want to continue to have "access."

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Wednesday, March 11, 2009

Two pieces worth noting 

Both are from the newly sports-minded WSJ.

First, in recent years, English teams have been getting the upper hand over their Italian counterparts, a reversal from prior decades. Why is this? My own answer is that "catenaccio," the Italian style of playing, is a form of implicit collusion. The pace is slow and defensive-minded. It is failing in an era in which skill and pace are increasingly prevalent on the pitch. Beckham is at AC Milan now because that is where he has a comparative advantage in the twilight of his career, as he has lost a step or two in the past decade. This WSJ story, "Why Can't Italy Beat England in Soccer?" touches on this briefly, and covers other interesting angles on the issue.

Second, here's a paper "Interracial Workplace Cooperation: Evidence from the NBA," discussed in the WSJ's Real Time Economics Blog. The claim: assists in the NBA are race-neutral. Surely work a look for some of our readers.

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Tuesday, March 03, 2009

The Sports Page Comes to the WSJ 

The WSJ unveiled its sports page today. The lead article is an interesting one on incentives, or the lack of incentives in today's NBA:
Beyond the Los Angeles Lakers, Boston Celtics, Cleveland Cavaliers and Orlando Magic -- all of whom have won at least 70% of their games -- only the San Antonio Spurs have better than a 10% chance to win the NBA title, according to lines offered by Las Vegas oddsmakers. Four teams are on track to lose at least 75% of their games, which hasn't happened in 11 years.

For the first time in NBA history, team owners, executives, and fans in numerous markets say they have resigned themselves to the idea that their teams are not going to be competitive this season and that, given the state of the economy, they could not make the sorts of expensive moves that would help them improve. "We all want to win, but we have to be aware of the uncertainty of our future revenue," said Dallas Mavericks owner Mark Cuban.

Beyond the obvious disappointment for fans, what's most troubling about this situation is that for the first time in the long history of North American professional sports, the majority of the teams in one league have no financial incentive to improve. Most will be better off financially if they do nothing, and in many cases, will fare even better if they make personnel moves that are certain to make them worse.

Adding to the trouble is the fact that next year, an unprecedented number of the league's best and most desirable players will become free agents -- a group that includes young superstars LeBron James, Dwyane Wade, Chris Bosh and Amar'e Stoudamire.

Wake me up when the Finals reach game 5....

More seriously, I take issue with the perspective of the article. College football is interesting and attracts fans year after year, despite that fact that 90% of the teams that participate have a minuscule chance at winning the BCS Championship. No doubt, the article is correct in that the financial incentive to improve has diminished. But the first order impact is that the financial cost of competing will decline. The sporting aspect of training, strategizing, and improving is no less diminished by the financial crisis. To be sure, general managers must be wary of the conditions in the aggregate economy -- the article is correct on that point. But the compelling aspect of sport lies not in player contracts, but in competition on the court. That should not change, and teams that recognize this better than others will increase their chances of improving, and perhaps competing for the title, this season and next.

As for the WSJ's addition of a sports page, I'm intrigued. But sports sections have been a staple of local newspapers for decades, and they haven't saved newspapers from financial failure. My hunch is that new media competition in sports has been as strong as in any dimension of the news business. Indeed, the loss of newspaper circulation may be disproportionately due to ESPN.com, MLB.com, Tigernet, etc. Having said that, the Journal has a different take on things, and the new sports section is certainly welcome in this corner of fandom!

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Monday, March 02, 2009

If It's Broke, Why Not Fix It? 

While spending the fall semester on the West Coast, I attended the MPSF Water Polo championships. (MPSF stands for Mountain Pacific Sports Federation -- a "cross-conference" conference of schools that play most sports in another association such as the PAC10, West Coast, or Big West.) I had seen water polo during the Olympics but never in person. Although the competition was very impressive in regard to the the athleticism and endurance of the players, it suffered from a terrible incentive problem leading to a foul, literally, every 5-10 seconds. Fouls near the goal are so costly that they are rarely whistled and extremely physical play from the defenders is allowed, while fouls away from the goal are not costly enough leading to huge numbers of stoppages. Call it "Soccer++" (See Modest & Not So Modest Proposals).

Why has something so glaring not been addressed? The selection of on-the-field rules is a relatively unplowed field in sports econ. We usually just assert that rules are chosen to maximize profits (or revenues). That assertion is easy enough to make but is it accurate? Are there a bunch of existing customers loyal to a given set of rules making changes likely to be unprofitable or is it something else such as league "political economy"? The NHL finally ditched the Red Line in is application of the "2-line pass" only after such an idea had long been floated. It's hard to believe that a lot of fans were tied at the hip to the Red-line, 2-line pass rule. Where rules changes require a supermajority, relatively risk averse owners are the deciding votes and may be the choke point for new ideas. Maybe it is TV contracts with relatively short lengths that make the networks unwilling to gamble on payoffs that might build over the longer term. A bunch of related questions crop up. Do leagues experiment at about the same rate or different rates, and if different, why? My guess is that sports leagues, like industries differ considerably in their willingness to experiment with altered play formats.

The biggest head scratchers for me are sports, such as water polo or soccer, where the incentive problems are glaring or sports lacking in popularity. Why not experiment? As I have written before, why doesn't the NBA try different, shorter playoff format?

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Sunday, February 15, 2009

"Someone created the box score, and he should be shot"*** 

Michael Lewis has a piece in this weekend's NY Times Magazine, "The No Stats All Star." The focus is on the Houston Rockets' Shane Battier, and to a lesser extent on their General Manager, Daryl Morey. Morey is a a bit of a stats geek, and Battier is a basketball player with "no stats," a prototypical team player who Morey identified and signed for Houston. But how? Here's a clue:

One well-known statistic the Rockets’ front office pays attention to is plus-minus, which simply measures what happens to the score when any given player is on the court. In its crude form, plus-minus is hardly perfect: a player who finds himself on the same team with the world’s four best basketball players, and who plays only when they do, will have a plus-minus that looks pretty good, even if it says little about his play. Morey says that he and his staff can adjust for these potential distortions — though he is coy about how they do it — and render plus-minus a useful measure of a player’s effect on a basketball game. A good player might be a plus 3 — that is, his team averages 3 points more per game than its opponent when he is on the floor. In his best season, the superstar point guard Steve Nash was a plus 14.5. At the time of the Lakers game, Battier was a plus 10, which put him in the company of Dwight Howard and Kevin Garnett, both perennial All-Stars. For his career he’s a plus 6. “Plus 6 is enormous,” Morey says. “It’s the difference between 41 wins and 60 wins.” He names a few other players who were a plus 6 last season: Vince Carter, Carmelo Anthony, Tracy McGrady.

That's a small slice of an intriguing story; this is Lewis at his best. Thanks to Al Roth for sending the link. Roth's post at Market Design identifies the principal-agent problem as key to the conflict between individual and team productivity in basketball. Lewis' account also illustrates how innovative managers like Daryl Morey can mitigate the problem. While Lewis focuses mostly on Battier, the athlete and the person, the economic punch line seems to me to reside in Morey, the general manager. As Roth points out, "basketball contracts may change" as a result of his innovations. Great stuff.

***Daryl Morey, as quoted by Michael Lewis

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Saturday, October 11, 2008

One more baller goes to Europe 

Josh Childress, to Greece for $20 million over three years:
"I get paid double, my role increases, I have no expenses and I move to a nice city?" Childress said. "How many guys wouldn’t do that, regardless if you’re a lawyer or a doctor?"
Or an economist!

This doesn't presage the end of the NBA, but it does put pressure on the collective bargaining agreement.

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Thursday, July 03, 2008

Sonics & Seattle settle for $45 - $70 million 

From the Seattle Times:
The city of Seattle will be paid $45 million in exchange for letting the Sonics move to Oklahoma City this year as part of last-minute settlement announced this afternoon.

Sonics owner Clay Bennett may have to pay an additional $30 million in five years if the city is unable to secure another NBA team, under the terms of the settlement announced at simultaneous press conferences in Seattle and Oklahoma City.
The $30 million requires that state legislation be passed next year to finance renovation of KeyArena. Politics can be strange, but the $30 million (present value more like $24 million) from Clay Bennett presumably would tilt the balance in favor of a bill. One downside of this feature of the settlement is that it puts a non-trivial sum of Bennett's money at work to preserve public financing of a basketball arena in Seattle.

I infer from the following that the commish was at work behind the scenes:
Nickels said the settlement preserves the possibility of NBA basketball in Seattle in the future — noting that NBA Commissioner David Stern agreed as part of the deal that a renovated KeyArena could be suitable for basketball.

In a statement, Stern said he was "pleased" with the settlement and said the NBA still regards "Seattle as a first-class NBA city that is capable of serving as home for another NBA team."
Pleased as punch, I'm sure. Seattle fans feel hosed by the process (do read Horsey's fine piece and check out the comments below it). But once they get their jones going for basketball, which won't take long, Seattle will jump to the head of the queue for the next relocation.

The Sonics name and "history of the team" were transferred to the city of Seattle. I'll put the over/under for the NBA's return at four seasons. If there is a team with happy feet, it could be shorter.

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Wednesday, June 25, 2008

Two good reads 

Gregg Bell on the Sonics trial. The Sonics are making the argument that Seattle pols have been playing dirty pool, which would not be surprising. As I've said before, there are no angels in the stadium game.

Andrew Leigh, an Australian economist, opines on the economics of sports. He links a paper by Goodall, Kahn, and Oswald, which studies the impact of coaching changes in the NBA. Leigh's commentary:
They find a large positive impact: if a team replaces a coach who never played NBA basketball with one who played many years of NBA All-Star basketball, it can expect to move six places up the ladder.

One possible explanation is that a coach cannot push top players to their limit unless he has competed at their level. Or perhaps effective NBA coaching involves a considerable degree of ego-management, and only a former champion can win the players’ respect. Either way, the results have important implications for any high-performance workplace where the CEO must manage a large number of experts. From law to technology to universities, could it be that the best boss is a former all-star?
The paper seems worth putting in your stack of things to read. Leigh has a blog too, which looks interesting.

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Monday, June 23, 2008

Is the NBA - NCAA market division in jeopardy? 

Basketball is the one uniquely American game. (Our baseball and football were adaptations of English games). It would be ironic if increasing appreciation of basketball in Europe chips away at the cartelized, market division arrangement that works so well for the NBA and NCAA. The things is, Europe pays more than the NCAA, and they don't have any problem with luring teenagers to emigrate for the purpose of sport. William Rhoden reports:
Brandon Jennings smiled Sunday afternoon when someone suggested that he might be considered a trendsetter.

If he makes good on a threat to go from high school to professional basketball in Europe, Jennings will become the first high school player to spurn college to go overseas and play professionally.

Trendsetting.

This is the latest — and most brilliant — plan yet to combat the three-tiered maneuver by the N.C.A.A., the N.B.A. and the players union to prevent talented high school players from going directly to the N.B.A.

The N.B.A. instituted an age limit of 19, and required that a player be at least a year removed from high school, as part of its collective bargaining agreement with the union. The N.C.A.A. didn’t protest, and why would it?

Under this arrangement, the great high school players have little choice but to do time in college for a season at a high-profile college. Kevin Love wound up at U.C.L.A., Michael Beasley at Kansas State, Derrick Rose at Memphis and O. J. Mayo at Southern California. All entered this week’s N.B.A. draft after one season in college.

Jennings, an 18-year-old from Los Angeles who played the last two seasons at Oak Hill Academy in Virginia, signed a letter of intent to play at Arizona.

Jennings was pushed into action by the N.C.A.A. After doing poorly on his first standardized test, he did well on the second, but because of the difference in the scores, the testing service asked him to take the test a third time. He relented, but at that point Jennings decided that he was through with the N.C.A.A. Why jump through hoops to go to Arizona, endure the charade of an academic regimen, then switch into N.B.A. mode the instant the season is over?
A little European experience might be more beneficial than sitting in Astronomy 101 for these cats, no?

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Tuesday, June 17, 2008

Seattle vs. the Sonics 

The lawsuit brought by the city of Seattle against the Sonics began yesterday. The city is seeking to force the Sonics to play at KeyArena through the remaining two years of the contract. The Sonics want to merely pay the required rent, and get out of town to new and better digs. Three main issues in the case are (1) the ability of the city to demand "specific performance" rather than the monetary payment alone; (2) whether through KeyArena the city would provide an economically viable venue during the next two years, as required by the contract; and (3) whether both parties acted in good faith when negotiating over a new Seattle-based home for the Sonics, a negotiation that was ultimately abandoned when the Sonics decided to move to Oklahoma City.

Coverage from the Seattle Times on yesterday's hearing is here, and there is good commentary on the issues at the Sports Law Blog. The weakest part of Seattle's case rests on the economic impact of the Sonics leaving town. I expect our man Humphreys to carry the day on that point. But intangible values loom large, and I give the city a decent shot on points two and three above, as a means of keeping the Sonics around (in a contractual sense, at least) for another two years. What ultimately happens if the city wins the case is anyone's guess. Maybe they'll get a nice pot of money in a settlement and bribe the Kings to come to the Emerald (nee Queen) City ;) There are no angels in The Stadium Game.

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Wednesday, June 04, 2008

$27,028: no sign of recession here! 

If you've got a few stacks of bills lying around and an appetite for the NBA Finals, this story in the LA Times reports that twenty seven grand will get you a ticket to game five at the Staples Center. It's apparently right behind the Lakers' bench, but still....

Other interesting stats: NBA merchandise sales are up 80% since the playoffs began, TV ratings are up 20-40%, and website visits to NBA.com are 1.2 billion this season, a 60% increase from last year.

I have the Lakers winning in six.

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Monday, May 19, 2008

Does soccer training build basketball skills? 

Probably more so than blocking and tackling. Billy Witz has the story in the New York Times:
[W]ith the league continuing to gain a more international flavor, fans do not have to know the difference between a free throw and a free kick to see soccer’s influence on basketball.

"When you grow up playing soccer, you obviously carry that over to other sports," said Lakers guard Kobe Bryant, who lived in Italy from age 6 through 13. "I think it has helped me tremendously."
There's much more in the story, and it does make sense.

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Sunday, May 18, 2008

Celebrity misbehavior 

My colleague Todd Kendall's paper, "Celebrity Misbehavior in the NBA" (link to abstract) appears in the June issue of the Journal of Sports Economics. Kevin Lewis discusses Todd's paper in today's Ideas section of the Boston Globe:
The author found that having a high salary compared with other players on the team, or in the league generally, was associated with unsportsmanlike conduct. Strikingly, the highest-paid players on a team egage in 7 percent more unsportsmanlike conduct than the second-highest-paid players. Although there are many possible explanations for this pattern, the author concludes that the evidence is consistent with top-paid players having their team and fans over a barrel. A top-paid player is supposedly more exceptional and therefore cannot be replaced easily, so the team and fans give the player more latitude.

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Tuesday, April 29, 2008

Sports Econ Musings 

A Real-Time Economic Indicator from Sports World: One of my colleagues returned from Talladega, reporting that crowds for the Sprint Cup and Nationwide Series races were way off from last year. He described the Nationwide attendance as sparse.

Free-Agency & MLBPA: Buck Martinez (TBS Analyst for NYY-Cleveland Game)went to some lengths describing the pressure put on C.C. Sabbathia, potentially the marquee free agent pitcher for next off-season, by the MLBPA to follow through and become a free agent rather than resign -- which is what Sabbathia says he prefers. Martinez' imputed rationale for the MLBPA is that getting the top guy on the market sets higher prices for everyone. That's a testable proposition for the sports economists out there with the free agent data sets -- does a higher quality player in the pool raise average offers?

My Ongoing NBA Playoff Beef: (See "Where Hardly Any Game Matters") Sixers beat the Pistons in Detroit, win in Philly, but must win two more to advance and one more to put the Pistons at the very brink of elimination. In spite of the Sixers play, there's been about as much drama as a Seton Hall-Providence matchup. A Celtic-Lakers matchup may be entertaining, but getting there will seem a lot like the WWF.

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Friday, April 18, 2008

Timeout's and strategy 

Jon Wiseman gives the NBA's timeout strategy crown to Nate McMillan and the Portland Trailblazers, based on post-timeout scoring margin. Curiously, guru Phil's LA lakers rank relatively low on this metric. I'd be interested to know how significant the difference in scoring margin is between the Blazers & Lakers, @ 2.4 points per team, and whether the stat is truly meaningful. Calling Dave Berri!

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Monday, January 28, 2008

Public Finance, OKC Style 

There are lots of ways to pay for an arena, but Mayor Mick Cornett said city leaders thought the choice was obvious in Oklahoma City.

The Ford Center was built with money from the original MAPS sales tax.

It just made sense to continue the temporary 1-cent sales tax, which was already extended to pay for MAPS for Kids, Cornett said.

If voters approve the Ford Center tax, it will go into effect Jan. 1, 2009, the day the MAPS for Kids tax is set to expire.

"Our citizens seem to prefer a sales tax initiative to other concepts,” Cornett said. "This is following the model that was created by MAPS. MAPS is a proven entity to our voters.”

No other NBA arena was funded exclusively by sales tax money, according to the National Sports Law Institute of Marquette University Law School.
Clever trick, to schedule the arrival of the Sonics right about when the sales tax would otherwise expire, don't you think? That fella Brad Humphreys is working for some pretty sharp cookies (inside joke -- see the comments here).

Mayor Cornett goes on to give a doozy of a tutorial on public finance, in case you want a snide chuckle or two. But the real story to me is the timing of this surreptitious little tax - very clever indeed. Thanks to Steve Winkler for the link.

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Wednesday, July 25, 2007

Bringing the Game Back - The Role of Prices 

Responding to some of the doomers and gloomers who see the NBA going to hell in a handbasket, Dave Berri argues that the the association will not suffer any long-term consequences from its current officiating/gambling scandal (King has thoughts here and Tom Kirkendall has some thoughts here).

Dave notes his research with Martin Schmidt about attendance following labor strife in professional sports. This research, published in 2004 in the American Economic Review and discussed in their book with Stacey Brook, Wages of Wins, is relevant because we have an event which some say threatened the long-term health of the sport. Schmidt and Berri show that despite the prediction of doom and gloom, attendance comes back to trend quickly after the strife ends. Why? One possibility is through ticket pricing.

According to average ticket price data obtained from the Team Marketing Report Database*, the average real (BY 2005) ticket price in baseball was 6.8% higher in 1994 than in 1993. In 1995, the average baseball club lowered its real ticket prices by 0.1%. Five clubs raised ticket prices and the other 23 lowered their ticket prices. Colorado began play in Coors Field in 1995 and was only in its third year of existence, meaning there was probably still a honeymoon effect going on with the team and the stadium. When we drop Colorado from the calculations, the average ticket price fell by 1.3%.

In 1996, the average real ticket price went up by 2.1%. Thirteen teams lowered their real prices and the other 15 raised their average real price. In 1997, the average real price went up by 6.4% and only 7** teams lowered their average real ticket price. Certainly there are many things that can affect the prices that teams charge, but it appears that part of the reason fans came back after the strike is that the teams set prices to draw them back. Moreover, to the extent that habit persistence explains the demand for baseball, the long-term health of the game after the strike can be partly explained by the pricing decisions of teams immediately after the strike ended.

The current scandal in the NBA, at least what we know now, is isolated and sends few, if any, signals about the overall integrity of officiating. Even so, we'll be able to see how damaging the NBA thinks the scandal will be on demand by looking at team ticket prices next season.

*For those not familiar with the data, The Team Marketing average ticket price series is a weighted average ticket price calculated using prices per section in each stadium weighted by the number of seats in each section. Canadian prices are given in American dollars. The details of the calculations are given at the Team Marketing website.

**7 teams, not 6 as I originally wrote, lowered ticket prices on average in 1997. I've changed the text and the table.

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Tuesday, June 05, 2007

19 Years Old, 100% Publicly Financed and Owned, and a Pile of Rubble 

The Charlotte Coliseum, the site of 19 years of sporting excellence, has been imploded. This arena was opened in 1988 and was built with 100% of public funds.

Why was it imploded at such a young age? It was imploded in part because it was too big and had too few* luxury boxes. It was also obsolete. Why was it obsolete? Because politicians built the Charlotte Arena for $265 million dollars in part to lure an NBA franchise back to Charlotte. The Hornets left Charlotte in part because a new publicly-funded arena was not forthcoming quickly enough.

In some Utopian sports society, where the separation of sports and state are clear, would the Coliseum have been torn down at 19 years of age and would it have been built so big in the first place?

This seems to be one of the things Milton Friedman had in mind when he warned us about spending other people's money on other people.

*Thanks to commenter Frank for noting that I had written the arena had too many luxury boxes when I originally wrote the post

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Tuesday, February 13, 2007

David Stern, cartel manager 

How does The Las Vegas Kings sound?
NBA commissioner David Stern said yesterday that he's "positive" the All-Star Game in Las Vegas this weekend will lead to "initial discussions" about allowing a team to relocate permanently to that city.

In an interview with Newsday, Stern said he has not dropped his objections to having a team in Las Vegas while NBA games are on the city's gambling books. But in a significant change in position, Stern said he would not stand in the way if league owners voted to move a team to Las Vegas without taking games off the betting lines.

"Absolutely, not, I wouldn't," Stern said in a 20-minute phone conversation advancing the league's first All-Star Game in a non-NBA city.
The story was sent by a longtime TSE reader who understands how an effective cartel operates. He opines:
So, let's see, the Maloofs just lost in a landslide election in Sacramento, there are no new prospects around here, the Maloofs have stronger ties to Vegas than to Sacramento, and are hosting the All Star game in Vegas this coming weekend, and all the early-exit clauses that went with the original Kings loan expire this coming summer...

Nah. All just a long sequence of pure coincidences. There's no connection here. Nothing to see here, ladies and gentlemen. Move ahead, please.

Har.

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Anna Nicole Smith 

What does Ms. Smith have to do with sports you ask? Celebrity misbehavior, argues Kevin Hassett of AEI. In an article on the Bloomberg Newswire, Hassett finds a parallel in the death of Smith, and a paper by my Clemson colleague, Todd Kendall. His paper examines the tendency of NBA players to "misbehave" - as in getting called for a technical foul on the basketball court. What are the characteristics of players who commit technical fouls at a high frequency per minute played? Here is Hassett on Kendall:
From Dennis Rodman to Lindsay Lohan to Paris Hilton, traditional boundaries of public behavior seem a thing of the past. Why do celebrities tend to be such boors? A study by Clemson University economist Todd Kendall sheds fascinating new light on the question.

Kendall considers a number of competing economic theories of boorishness. The first, the "Beautiful Mind" theory, is that people who perhaps genetically disregard norms are more likely to have a creative impact. These same people might well behave more poorly than a typical conformist.

Alternatively, it might be that high income makes an individual insensitive to the normal disciplines of society. A third possibility is that celebrities tend to be young, and youths are much more likely to indulge in destructive conduct. Finally, it might be that individuals who can't be easily replaced tend to be the misfits.

...

To establish which explanation of bad behavior works best, Kendall gathered data from the National Basketball Association. Players in that league have been notorious for their rude and at times even criminal behavior. Fights on the court, brutish fouls, and even rape have been in the news in recent years. Kendall set out to discover which players behave the worst.

The NBA is a fine place to test these competing theories. Its players are young, have high incomes and guaranteed contracts. There is also significant variation in ability. Some players, like Kobe Bryant of the Lakers, have such preternaturally special skills that they fundamentally change the competitive level of their team. Others play their positions adequately, yet could be easily replaced. Do the irreplaceable stars tend to misbehave more?
You can get a copy of Todd's paper here. The bottom line is yes, "people who know they can't be replaced behave the worst." Moreover, the tendency to get teed up during a basketball game is positively related to the number of arrests off the court.

Hassett's piece has some interesting extensions of his analogy that are certainly worth reading. I'm not sure that Anna Nicole Smith's talents were irreplaceable, but hey, she was a bad girl ;) and it's a nice story.

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