Tuesday, March 02, 2010

Report to the Big 10: "Just say yes to expansion." 

In an earlier post, I wrote about Big 10 expansion and argued that if the Big 10 decided to expand, it would look east before it would look west. That was under the assumption the Big 10 would add one team. If it decides to add more than one team, then westward expansion makes more sense.

Now comes word that the Big 10 has received a report it asked to have done that says that expansion is a good thing for the Big 10. I don't think many will argue with that.

A source inside the league told the Chicago Tribune that the report, prepared by the Chicago-based investment firm William Blair & Company, analyzed whether five different schools would add enough revenue to justify expanding the league beyond 11 teams.

"The point was: We can all get richer if we bring in the right team or teams," the source said.

The five analyzed were Missouri, Notre Dame, Pittsburgh, Syracuse and Rutgers. The source, though, called those five "the obvious suspects" and cautioned that other universities could earn consideration.

Like Texas or Nebraska?

In that earlier post, I mentioned that college expansion, unlike that in the pros, doesn't occur with an expansion fee. I may be wrong in that respect this time around:
"You just don't jump into the league and get a full share of what everyone else in this league has established over time," Wisconsin athletic director Barry Alvarez told The Associated Press. "I think someone has to buy their way into the league."
I love how the world of "non-profit" "amateur" sports resembles the world of the pros.

So, just like in the pros, expansion generates value for the entrant, value the incumbents partially want to capture for themselves. It's not that Alvarez doesn't have a point, but I would hope that expansion would increase the size of the Big 10 pie enough to more-than-offset having to share the pie over more schools. Otherwise they shouldn't be expanding.

Labels:

What Determines Bowl Ticket Sales at the Institution Level? 

Todd McCubbin, the executive director of the University of Missouri Alumni Association, writes a short piece on the number of tickets sold by Mizzou to this year's Texas Bowl. His short essay is located on page 47 of the spring 2010 issue of the Mizzou alumni magazine (I don't have a link to the piece, but here's a general link to the alumni magazine).

"The mystery of the Big 12 bowl selection process still casts a shadow on the 2009 campaign. For the third consecutive year, teams the Tigers defeated were selected ahead of them. Our e-mail and phone lines were busy as many of you voiced concerns about the process.

The media shed light: The bottom line seems to be that, unless a team is conference champion, wins and losses mean little. Instead, bowl organizations make selections based partly on television ratings but mosly on how many fans travel to watch the game in person. It can be tough to swallow that a team's performance on the field can count for so little."

McCubbin goes on to say that about 10,000 Mizzou fans made the trip to Houston, but that was short of the school's 11,000 ticket allotment.

As part of my sabbatical research, I have been working on examining the ticket sales made at the institutional level for the 2008-2009 bowl season. My source for tickets sold is this post at the Wiz of Odds. The results are preliminary and, as such, have not been peer-reviewed yet. So take this for what it's worth.

Here are some results from a preliminary STATA analysis on my data. The numbers are the result of an OLS regression.

Variable Parameter Standard Err t-statistic p-value
Tradition 264.3157 45.48273 5.81 0
Years Since Last Bowl 618.8521 112.5678 5.5 0
Dist from Nearest NFL Stadium 17.07413 2.621021 6.51 0
Distance from Bowl Location -2.229766 1.103187 -2.02 0.048
BCS Dummy 3382.728 2124.074 1.59 0.117
Local Population 0.0006327 0.0003135 2.02 0.048
Private School Dummy -4206.533 1783.724 -2.36 0.022
Intercept 1474.826 1355.562 1.09 0.281





N = 64



F(7, 56) = 0



R-Sq = 0.6700



Root MSE = 4785.7



I defined Tradition as the number of Division/FCS level bowls the program has been to in its history. Local population is the local population of the university's city. I tried controlling for university enrollment and bowl city average temperature during the month of the bowl but neither added anything to the results. I didn't have any information on ticket prices.

The regression explains about two-thirds of the variation in ticket sales. Not too bad. The analysis tells me that teams that have more tradition sell more tickets. For every bowl game the team has been to in the past, about 264 more tickets are sold. Teams that haven't been to a bowl in awhile sell more tickets (this tells me that winning is subject to diminishing marginal utility). For every year it's been since the last bowl appearance, the university sells about 619 more tickets. The farther a university is from an NFL stadium, the more tickets sold (about 17 more tickets for every mile in distance away from the NFL stadium). The farther the university is from the bowl location, the fewer tickets sold (about 2 fewer for every mile in distance). Playing in a BCS game doesn't statistically explain the variability of ticket sales. The bigger the local city's population in which the university sits, the more tickets that are sold. Lastly, private schools on average sell about 4,207 fewer tickets to their games.

So, if bowl executives do pay attention to expected ticket sales and to the extent my analysis captures what they do, they pay attention to tradition, how long it's been since the team last went to a bowl, how far a team is from an NFL stadium, the distance to the bowl, the university city's population, and whether the school is public or private.

So how did Mizzou perform in terms of the number of tickets sold through the athletic ticket office to the Alamo Bowl game the football team played in? According to my calculations, Mizzou should have sold about 8,817 tickets. They actually sold 6,050. Part of the difference can probably be attributed to randomness inherent in the data. But part of it could be that there may be some reason for fan disinterest at Mizzou that I don't capture with my regression. If it's the latter, what could it be?

Cross-posted at Market Power

Labels: , ,

Wednesday, December 30, 2009

Brinksmanship in Lubbock 

The saga of Mike Leach, the mad genius football coach continues today in a Texas courtroom, at a hearing of his plea to be reinstated for Saturday's bowl game. This is the latest in a bizarre sequence of events, reminiscent of an 19th century duel.

Most readers know the precipitating events. A player, Adam James was diagnosed with a mild concussion, and in subsequent practices was isolated from the team and treated with, at a bare minimum, a big pinch of disrespect. James' father, ESPN commentator and former SMU star Craig James, complained to the university about the treatment, and subsequently made noise in the media that the issue was the coach failing to act in the interest of his players' safety given Adam's treatment after his concussion.

Here's my somewhat speculative take on the saga. The escalating event occurred when school president Guy Bailey attempted to deal with the issue by getting Leach to sign a letter of apology to James. Leach refused, forcing Bailey to execute his threat, suspending Leach from the bowl game. This is not the outcome Bailey wanted. As a school president, Bailey is a politician, and when he turned into a mediator between a well known TV analyst and his coach, he acted like one. Fairly typical, but in this case it was a big mistake.

Leach turned Bailey's move into a blunder by refusing to cooperate. Why? I think there's another game being played out in the background. Subsequent reports indicate that the coaches (not just Leach) had issues with Adam James, referring to him in one case as "unusually lazy and entitled." Unwelcome interventions from his father had apparently taken place before. So what's going on? James is a redshirt sophomore who doesn't get many touches, apparently a pain in the buttocks and perhaps corrosive to team chemistry (He may even have a "fat little girlfriend" a phrase comment from Leach that is somehow being used to imply he's unfit to coach!)

I think Leach & co. were trying to run him off. The concussion gave Leach the impetus to send Adam James to the proverbial woodshed. But instead of planning to transfer to another school (which will surely be forced by these events anyway), his dad decided to create a stir. Apart from the impetus and the response, the concussion has little to do with the story. This is a story about control of the program in the face of unwelcome intervention by parents and blundering administrators. The president should have anticipated that Leach would not go the apology route when control of the program is on the line.

A similar scenario played out at Clemson in January of 1990. Clemson's most successful football coach, Danny Ford, and the university president got into a tangle over building a dorm for athletes. The president had political capital tied up in an effort to ban these facilities (something that would ultimately take effect), and the coach had raised a few million bucks to build one. Neither would budge, and the feud escalated until first, Coach Ford was fired, and two four years later, the president. As is happening today in Lubbock, the fans in town were lined up on one side only, in favor of the most successful coach in school history, camping out in front of the President's house.

I've always thought this episode revealed a big flaw in the leadership ability of Clemson's president. Good presidents (and they are rare) can get past the politics and look at the end result. Danny Ford had raised the money for a new building, and the president should have let him build it. Once all-athlete dorms were banned, the president would have captured most of that dorm as the athletes were spread across campus. In turning the issue into an all-or-nothing fight, Coach Ford and the president destroyed a potential asset for the university, and lost their jobs on account of it. The football program stunk for most of the next decade as well. All of the above are in the cards for the duelists in Lubbock.

Update: Leach was fired, minutes before the hearing was to start! Ok, so you are firing a guy for not apologizing, and then for filing a restraining order?!! Omg, this is nuts. Texas Tech is out-Clemsoning Clemson!

Labels: ,

Tuesday, December 22, 2009

More on the Economics of Bowl Games 

Inside Higher Ed reports that a number of teams participating in bowl games will not be taking the marching band, as well as reducing the number of cheerleaders and the size of the "official party" of administrators, faculty and staff that often travel with teams to bowl games. Boston College and Nevada will leave the band at home; Minnesota will reduce the number of band members and cheerleaders traveling to the Insight Bowl in Tempe. The reason? The bad economy, and the high cost of travel. Airfare (or charter flights), hotel rooms, food, practice facilities at the bowl site for the team and band all add up to large travel costs associated with playing in bowl games.

That's just the tip of the iceberg. An article in the San Diego Union-Tribune exposes the dirty little secret of bowl games: on average, schools lose money when they participate in bowl games. Although participants in the BCS bowls will each receive $18,000,000 this year, some of that revenue must be shared with other conference members, reducing the payday to individual participants. Also, all bowls require participants to purchase a certain number of tickets, usually more than 10,000, to the game, no matter how many they actually sell to fans. Last year, Western Michigan was stuck with over 10,000 unsold tickets to the Texas Bowl, costing the university over $400,000. The Union-Tribune article claims that unsold ticket guarantees cost bowl participants over $15 million last year, and expects the cost to rise this year as fewer fans travel to bowl games across the country.

Bowl games are viewed as local economic development projects by host communities. The losses incurred by many participating institutions suggest a subsidy flowing from college football fans to cities that host bowl games. Worse, the existing evidence indicates that college bowl games actually do not actually generate much local economic benefit for host cities.

Labels: , ,

Friday, December 18, 2009

Winners and Losers in College Bowl Games 

It's well-known that in terms of accounting entries, many college athletic departments lose money. Some economists have questioned whether the expense and revenue entries are an accurate measure of the costs and benefits associated with athletic departments. One reason given is that athletics may benefit other parts of the school. Even if the athletic departments bleed money, other areas of the school may benefit.

A second argument given is that the revenue and expense entries are convoluted by the accounting conventions used by colleges. If athletic souvenir revenue is entered in the general university revenue account, then the athletic revenue accounts understate the "true" level of revenue. Similarly, it's not at all clear that the true cost of an athletic scholarship is as high as the posted tuition and room and board rate. If not, then athletic expenses as entered overstate "true" expenses.

In any case, the San Diego Union-Tribune has recently posted a couple of interesting stories about who benefits and who doesn't benefit from college bowl games. The answers may (or may not) surprise you. Here is one story. Here is the other story.

Labels: , ,

Tuesday, December 15, 2009

Will the Big 10 Raid the Big XII? An Exercise in Club Theory 

Sports leagues can be thought of as clubs. To enter any club, permission must be obtained from the incumbents, which means a sufficient number of them must be made better off by the entrant. Similarly, the entrant has to be made better off by joining the club. If it is mutually-beneficial, we'll see entry into the club.

You probably are aware that the Big 10 has become serious about adding a 12th member. Former Wisconsin football coach and current AD Barry Alvarez and the legendary Joe Paterno of Penn State have both gone on the record saying that the Big 10 needs to seriously add a 12th school, primarily to benefit the football side of the ledger. The SEC, Big XII, and ACC all play meaningful games into December, including league championship games, two weeks after most Big 10 programs finish their regular season. Teams from those leagues get extra practice time and attention (i.e. television appearances, money from the championship games, and recruiting coverage). While the Big 10 teams have to wait. Expansion proponents feel that money is being left on the table

The last time the Big 10 expanded was in 1989 when Penn State was added as a member. The last time the Big 10 sought to expand was in 1999 when it made an offer to Notre Dame, an offer that ND rejected. This time around, schools such as Notre Dame, Nebraska, Missouri, Iowa State, Cincinnati, Syracuse, Louisville, Rutgers, and Pittsburgh are the primary candidates mentioned in the press. Regarding the club theory of the Big 10, Stewart Mandell comes closest to capturing the essence of what Big 10 programs are thinking.

The Big Ten does not publicly release revenue-sharing figures, but it's been reported that its rights deals with ABC/ESPN and the Big Ten Network generate about $212 million annually. (That's in addition to the league's direct profits from its jointly owned network.) Add in this season's two BCS berths ($22.3 million) and five other bowl berths (about $14 million), and we're talking a minimally estimated $248.3 million in shared revenue, or $22.6 million per team.

Therefore, any potential 12th team would have to add $22.6 million in "value" to renegotiated TV and bowl deals to prevent the others from losing money. With all due respect to Missouri, Pittsburgh, Syracuse and Rutgers (the most commonly discussed candidates), there's only one viable school that could guarantee that kind of gold mine: Notre Dame. The Irish rejected the Big Ten's last invitation in 1999, and the school has given no indication it's willing to reconsider.


So I have a hard time thinking that the Big 10 will raid the Big 12 before they check their options to the east of Big XII country, namely Notre Dame, Syracuse, Rutgers, and Louisville.

Update: Stacey Brook also thinks Notre Dame is the best fit but that it is likely to refuse an invite. He suggests TCU as a possibility, one I had not thought of. I doubt if the Big 10 will go outside a border state to a school, especially one that is 1,200 miles from UMich, 1,100 miles from tOSU, and 1,400 miles from Penn State, the Big 3 in the Big 10.

Labels: ,

Non-Pecuniary Gifts in College Football Bowls 

Unlike coaches who get bonuses for making bowl games, the athletes can't be paid cold, hard cash for their efforts. But participants in bowl games get an array of gifts. The Sports Business Journal has the complete list for this Christmas-New Years bowl season.

HT Wiz of Odds.

Labels: ,

Thursday, December 10, 2009

Tennessee Trouble 

The fact that college athletics has a salary cap on players = $0 forces schools to use non-pecuniary means to attract the top recruits. According to the New York Times, the University of Tennessee is under NCAA investigation for using hostesses to attract recruits.

Marcus Lattimore, a running back who made an unofficial visit to Tennessee but said he would not enroll there, said multiple Tennessee hostesses attended a game at James F. Byrnes High School in Duncan, S.C., in September. He said they brought signs, including one that read, “Come to Tennessee.”

“I haven’t seen no other schools do that,” he said. “It’s crazy.”

The hostesses are considered representatives of the university, which would mean they could not recruit players off campus. Therefore, the visits may be considered violations of N.C.A.A. recruiting rules.

Two of Lattimore’s teammates, Brandon Willis and Corey Miller, have orally committed to Tennessee. Lattimore described the hostesses as “real pretty, real nice and just real cool.” He said he thought they had “a lot” of influence in Miller’s and Willis’s commitments to Tennessee.

...“You don’t want to go to a college where they ain’t pretty,” Lattimore said.
It will be interesting to see how this shakes out. The article notes that Tennessee has had "at least six secondary violations" since Coach Lane Kiffin took the Vol's job one year ago. Those will likely play some role in what the NCAA rules.

Via the Wiz of Odds

Labels:

Tuesday, December 08, 2009

Revenue Sharing and Salary Caps: Will the NFL End Up Like the Big XII? 

Many folks point to the NFL revenue sharing system and its salary cap as the determinants behind the more-or-less balanced competition between the teams.

As we edge closer to a potential labor-management dispute, the NFL has decided to put part of the revenue sharing system on hold. From Chris Mortensen at ESPN.com:
In a significant move that could impact the flow of money to potential free agents and the competitive balance of teams, the NFL has notified the players' union that effective in March, owners will pull the plug on the $100 million-per-year revenue-sharing program that has subsidized lower-revenue clubs, multiple sources said.
The classic 1956 JPE paper by Simon Rottenberg contains the well-known and frequently-studied invariance hypothesis (IH). According to this hypothesis, the distribution of players does not depend on who has the right to tell players where they can and cannot play. Instead, each player tends to the market that values him the most at the margin.

Since a salary cap does not change the marginal value of players, it shouldn't ceteris paribus alter competitive balance.

Revenue sharing, on the other hand, reduces the difference between the amount of revenue teams can keep and, thus, can alter the value of players. Altering the system as the NFL appears to have done will, if it remains in place over the long haul, may create more of a disparity between "large" market and "small" market teams.

As a comparison, look at the Big XII conference in football. The Big XII (and every other college conference) is bound by a salary cap with player salaries = $0. When it comes to TV revenues, the Big XII operates under a split-pool revenue sharing system* where all television revenues are pooled together. Then half of the pot is divided up evenly among the 12 teams and the other half is divided up among the teams depending on how many telly appearances each team has made.

This means that teams like Texas, Oklahoma, and Nebraska, which have the biggest football followings and appear on TV most-often, get a bigger ladle from the money pot than teams like Baylor, Iowa State, and Kansas State.

In terms of the spread of championships, the Big XII has not been balanced. Nine of the fourteen championships have been won by either Oklahoma or Texas, including that classic game played between Texas and Nebraska last weekend. Throw the Huskers into the championship count, and 11 of the 14 championships have gone to the big market teams.

But they spend equally on players (if not coaches - click on the Big 12 link for more info).

With the divisional format in the Big XII, it is possible that an upset will occur where a "small" market team wins the overall championship over a "large" market team. Kansas State winning over Oklahoma in 2003 and, to a lesser extent, Colorado's 2001 defeat of Texas bear this out. But the spread over time tells a different story.

So we have a league with a salary cap that drives equal spending on player payments ($0) and unequal market sizes in terms of the amount of revenue received by teams when all is said and done.

So the question is this: Aassuming this descision by the NFL sticks (the NFLPA is challenging it, according to Mort), will the NFL begin to resemble the Big XII in terms of the spread of championships over time? Stay tuned, sports fans.

*Here, here, here, here, here, here, and here, are some posts and articles that describe the revenue sharing system in the Big XII and some of the surrounding controversies.

Labels: , , , ,

Monday, December 07, 2009

Frustrated With the Big XII Bowl Selection Process? 

"Frustrated." "Slighted." "Snubbed." Those awords describe the feelings many Missouri fans, adminstrators, players, and coaches have towards Mizzou's selection to play Navy in the 2008 Texas Bowl. The Texas bowl gets the last pick among the bowls affiliated with the Big XII conference and a 6-6 Iowa State program, a program that 8-4 Missouri beat, got picked ahead of Mizzou to go to the Insight Bowl.

Moreover, Mizzou finished with a better record than Oklahoma (7-5) and the bipolar Texas A&M Aggies (6-6) but got picked after them. No doubt the relative strength of the South division over the North division was a determinant of OU's and aTm's being selected ahead of an 8-4 North division team.

It's the third year in a row that Mizzou interests felt jobbed by the bowl selection process. Despite finishing in first place in the 2007 North division, having carried a number one ranking for one week at the end of the season, and having beaten Kansas head to head, Kansas got the BCS at-large berth. Yes, Mizzou had one more loss but it also played one more game, that being the the honor of getting whupped by Big XII champion Oklahoma (Mizzou lost twice to Stoops' boys that year - they also lost to OU in the regular season).

Snubbed by the Orange Bowl, Missouri went on to destroy Arkansas in the Cotton Bowl where 35,000 Mizzou fans partied hard in the cold sun in the Metroplex.

In 2008, Mizzouri once again won the north, got pummeled by OU in the Big XII championship crushing Nebraska handily in Lincoln 52-17 earlier that season.

These are not the first instances of a Big XII team getting bumped down a notch in the selection process. In 1998, Kansas State came into the Big XII championship game ranked second in the AP poll. The Wildcats were loaded on both sides of the ball and were headed to the BCS championship game with a win over Texas A&M. It didn't work out that way as KSU lost a two-overtime shocker to the tenth-ranked Aggies.

But instead of an at-large berth in the BCS, the 3rd ranked 'Cats fell all the way to the Alamo Bowl where they lost to unranked but Drew Brees-led Purdue Boilermakers 37-34. Watching that game, it was pretty clear to this observer that Kansas State, with one of the best and most well-rounded teams in college football, was playing as if it didn't want to be there.

What's got Mizzou fans in particular and North Division fans outside of Nebraska concerned is the conference's bowl selection process, a process that probably won't be changed anytime soon. The Big XII has outsourced its selection process to the bowls themselves and other than the BCS invitations, the bowls can pick whatever team they want to pick as long as that team is bowl-eligible. Four of the bowls are in Texas, which works out rather well for the Texas and Oklahoma schools in the conference. Add to that the well-traveling Nebraska fans who are coveted by every bowl and you have 7 of the 12 schools that are happy with the current selection process.

Perhaps we could call it the NebOkieTex conference? But I digress.

For this year's selections, Mizzou's situation is like being the last kid picked on the playground. The bowl's payout is nearly half of the next-lowest paying bowl ($612,500 compared to the $1.1 million payed by the Independence Bowl (source)). The Texas Bowl's estimated expense allowance is $500,000 less than the Insight's (source). The Mizzou administrators have a reason to be frustrated for cash flow reasons.

But I'm not so sure that Mizzou fans, players, and coaches should feel slighted, snubbed, frustrated, etc.. Both the Insight and Texas bowls are New Year's Eve bowls. There are more Mizzou alumni in Texas than in Arizona. Moreover, the game is more accessible on television since the Texas Bowl is broadcast on ubiquitous ESPN where the Insight Bowl is broadcast on the not-so-ubiquitous NFL Network. In addition, Mizzou recruits Texas heavily

I know the bowl system has suffered a sort of grade inflation with so many games being played and where mediocrity is awarded over merit. We'll probably never know about the "intense lobbying efforts" that go on behind closed doors for these bowl slots and I realize it's about the benjamins. That is, it's about the determinants of the overall demand for each game: the absolute and relative quality of the matchup, any feelings of rivalry the two schools' fans have, the willingness and ability of fans to travel, etc.

But it's a bowl game and the Tigers, and all other programs that feel slighted for one reason or another in NCAA FBS football, could be doing what many other teams and their fans will do this year: stay home for the holidays.

Labels: , ,

Thursday, October 22, 2009

It's Still Good to Be the Cupcake 

I've written before on cupcakes in college football (see here as well). You know the cupcake. The team expected to lay down in front of your superior squad in exchange for a sexy payout. The team that allows you to tailgate without much gnashing of teeth. The team that allows you to bring your kids to a game and allow let them be free range kids without all the worry. You won't miss a thing while you're spending time parenting.

Why is it good to be the cupcake? Because they get paid hundreds of thousands of dollars to come to your place for a shellacking. Moreover, according to press reports, because of the added 12th game in D-1 football (or FBS, or whatever you want to call that rose), the demand for cupcakes has risen, giveing rise to bigger payouts to the cupcakes.

Because those payouts are lucrative, at least one team decided to take a guaranteed loss - a 100% percent guarantee, mind you - in exchange for a nice payout. And that was a loss on top of the highly-probable, almost-certain loss it was going to be given at the hands of the Michigan Wolverines.

You see, the Michigan Wolverines dangled $550,000 in front of the Hornets to play this Saturday. The only catch: Delaware State already had a conference game set against North Carolina A&T for that date.

So what did the Hornets do? Well what every Football Championship Series team would do: forfeit the conference game, take the money and, oh yeah, lose to Michigan 63-6.

Sounds like a win-win to me, right?

HT Stephen Karlson who chirps:

It's amateur sports. It's all for the experience. Heck, Delaware State played Michigan just for practice. But don't say it has anything to do with money.

Of course not. The schools are non-profits, although when you sit down and look at the things they do (setting ticket prices and negotiating coaches' salaries, for example), they behave an awful lot like the pros. It has something to do with the invariance hypothesis.

Cross-posted at Market Power

Update: A Tank McNamara Cartoon.

Labels: ,

Wednesday, June 10, 2009

9th grader offered scholarship... 

to study, errr..., play football at the University of South Carolina. If coach Spurrier is there in four years time (he's currently 64 years old) I'll be surprised. The recruiting game is unravelling, folks! Al Roth would be amused. Ironically former SC PhD student (and former basketball player) Scott Kelly studied recruiting in NCAA basketball from a Rothian perspective, and has had discussions with the coaches' association on adopting market design principles to reduce the inefficiencies spawned by the recruiting process. Everyone one would be much better off, I think, if college coaches spent more time with players on the practice field, instead of hitting the road to recruit 9th and 10th graders.

Labels:

Thursday, January 08, 2009

Al Roth on the BCS 

Here's Al Roth at Market Design:

College football doesn't host playoffs. The "championship" game matches the two highest ranked teams at the end of the regular season, based on a more than usually uncertain ranking system (since some of the highly ranked teams will not have played each other). Sports Illustrated just published a story, before the championship game, saying that some of the early bowl games had low Nielsen ratings (which measure television viewership): Ratings are proof the addition of fifth BCS game officially a failure. The article notes
"By removing the top two teams from the existing BCS bowls (Rose, Fiesta, Sugar and Orange), the remaining lineup gets unavoidably watered-down. "

Utku Unver and Guillaume Frechette and I wrote a paper which showed that (under earlier versions of the BCS system) the championship games drew enough extra television viewers to make up for the lower viewership in other bowl games that (consequently) had neither the top nor second ranked team playing in them. (See also this interview about the origin of the BCS system (to which I devoted an earlier post).)

So the BCS system may have watered down the rest of the bowl line-up, but in terms of incremental revenue the NCAA is better off with the BCS system.

Cross-posted at Market Power

Labels:

Wednesday, January 07, 2009

College Coaches Running up the Score: Responding to Incentives 

From Pat Forde at ESPN:

Oklahoma ran it up last and loudest, scoring 45 fourth-quarter points in its past two games against Oklahoma State and Missouri -- 31 of them in the last half of the last quarter. The Missouri game was particularly egregious, with Bradford chucking for the end zone with less than four minutes to play and the Sooners clinging to a precarious 34-point lead.

Many will damn Stoops for doing this, arguing (reasonably) that he shouldn't have his starting offense on the field late in the 4th quarter of a blowout game, as in the Big XII championship game against Mizzou. But that blowout allowed the Sooners to hurdle the only team to beat them this year - Texas - in the BCS standings, putting the Sooners into the "championship" game against the Florida Gators. Speaking of the Gators:

But don't forget Florida's naked scoreboard padding earlier in September -- particularly the field goal the Gators kicked with 25 seconds left against Miami to stretch a 23-3 lead to a 26-3 final score. There was no point in even trying to justify that one, so Meyer didn't. He offered no significant explanation at all.

...Florida did not turn off the USA Today coaches' or AP poll voters with that field goal. The Gators gained points in both polls following that victory.

The kicker:

This is another manifestation of a BCS system that is awash in money and finds frustrating ways to crown a champion. The system rewards blowouts -- not in the computer rankings, which collapse margin of victory, but with voters who use scores to help split hairs between powerhouse teams.

Not only that, but coaches get bonus pay for reaching the BCS, getting into the title game, and winning the championship (from a Nov. 2006 USA Today article).

•At 83 schools, more than $23 million in on-field performance bonuses are at stake as coaches and their teams approach the 2006 postseason. Florida's Urban Meyer will pocket $37,500 for getting the Gators to next month's Southeastern Conference title game; he will effectively get another $137,500 if the Gators win it and qualify for a Bowl Championship Series game, $50,000 more if they get to the BCS national title game and an additional $100,000 more if they win that.

The current BCS formula is a combination of 6 computer rankings, the Harris Interactive poll (a poll of former coaches, players, and administrators, and current and former members of the media), and the USA Today coaches' poll. When humans pick who is best, they naturally look at margin of victory to partially provide that information. This is, IMHO, especially true of coaches who spend most of their time preparing for their next game. They simply don't have the time to closely follow how particular games unfold.

I certainly can admire coaches that don't run up the score on purpose, but it's hard to damn them when they do. They're just responding to the incentives that they face.

Cross-posted at The Sports Economist

Labels:

Wednesday, December 17, 2008

Chizik "A Good Buy Right Now"? 

Lately, the hiring of Gene Chizik for the head football coaching job at Auburn generated a ton of (mostly negative) buzz. Charles Barkley's comments about race as a factor, particularly Turner Gill's interracial marriage, stirred the pot even more. A story from the Columbus (GA) Ledger-Enquirer offered this supportive quote from a local businessman and AU fan:
“I’ve found that when everyone is down on something, it’s usually a good time to buy,” Carreker said. “A lot of people are down on him right now, so it might be a good time to buy into Gene Chikiz.”
If coaches were assets that could be "bought low and sold high" as well as "cashed in" at most any time, maybe such as analogy would fit. Even if the average opinion of Chizik is lower than his potential right now, he will have to outperform that opinion by a wide margin. While past stock performance says very little about future performance (except over very long horizons), past coaching performance holds more correlation.

On Chizik's upside, his last defense at Auburn led the nation in points allowed; in his lone year at Texas, their defense finished fifth while the team won the National Championship (they were 14th in D the year before he arrived). Of course, as some have pointed out, Auburn's defense was not their problem. They finished 18th in D this year in spite of an offense that put the defense on the field for most of their games.

On the downside, and the very, very unusual aspect of this hire is Chizik's performance as a head coach. No reasonable person would expect Iowa State to challenge AU's win totals. Yet, most of the stories I've read seem unaware of ISU's record pre-Chizik: from 2000-2006, they were 9-3, 7-5, 7-7, 2-10, 7-5, 4-8. So, the worst two seasons in those six exceeded Chizik's win total at ISU.

More stunning, though, is a coach "moving up" in the coaching world after losing his last 10 games. I wondered, has anybody even come close to that. Lacking Elias Sports Bureau's data, I racked my brain and asked some others. The closest that anyone (Dennis Wilson) could come up with was Dennis Green in moving from Northwestern to Stanford. In his last two seasons at NU, Green went 2-9 and 3-8 while losing his last five games; however, the move from NU to Stanford pales next to the ISU-AU jump if measured by metrics like attendance or football revenues. Tommy Tubberville lost his last 3 games at Ole Miss as part of a 6-5 season before moving to Auburn, so maybe the AD took the booster's advice and "doubled down" -- if Tubberville could have good success coming in with a 3 loss streak, think what could happen after a 10 loss streak!

Labels:

Monday, December 15, 2008

Bowl Schwag 

The NCAA permits up to $350 in gifts from their schools and $500 from bowl management.

Typically the school gives them shoes and athletic gear, but bowl gifts can be off the charts -- video recorders, game gear, jewelry. At the BCS bowls, players will be able to pick from a menu of Sony electronics during a visit to a gift suite.

Besides the Oakley Split Thumps MP3 sunglasses from the Gator Bowl, [Clemson's] players this year will receive a Bulova watch, Jostens ring, two pieces of Mercury luggage and a fitted cap.
More relevant to some of you is the accounting of the revenue distribution for the bowl games from the ACC to its member teams. Worth a look.

Labels: ,

Friday, December 05, 2008

Southern Fried Football 

In the WSJ, Darren Everson serves up a very econ-oriented piece on "What the Rise of Southern Football Says about America." Subscription is required to view the entire piece, but the summary provides the essence:

The South is dominating college football like never before, but its ascent isn't just a matter of good coaching. How a population boom and a growing economy have helped turn a regional obsession into a national juggernaut.

Labels:

Tuesday, September 16, 2008

Ticketless Trojan Game 

I've had an longtime fascination with gameday ticket resell, not just the analytics and systematic data study but in a "hands-on" way -- I guess you could call it "behavioral" research. Various friends and I have attended FSU-Miami (91), Auburn-Alabama (Birmingham), Auburn-Florida (Auburn), TN-Arkansas (98), Texas A&M-Baylor (College Station), Ohio St.-Michigan (Columbus), Michigan-Penn St. (Ann Arbor), plus odd assortment of Arkansas, SMU (pre-death penalty), UK, and Vandy games without tickets in hand. The only "shut out" was the Notre Dame-FSU game in 93.

Differences in ticket prices at various NCAA football games tend to follow supply and demand in predictable ways with game quality, stadium capacity relative to the population of the market highly influential, and local resale restrictions and their enforcement highly influential. In recent years, tickets can be secured via online brokers, but the expiring option nature of a ticket frequently means lower prices closer to game time -- the actual process of this price movement is interesting to observe if you aren't too concerned about seeing the kickoff.

The availability of ticket sellers is a different matter. In places such as Ann Arbor, Knoxville, Auburn, Birmingham, or College Station gameday resale comes close to an organized exchange in volume of tickets for sale. The price varies, depending on the game's characterisitcs but ticket sellers abound. At places like Columbus or Florida State where (when I visited) resell restrictions were in place and modestly enforced, resellers existed but in much smaller numbers and with less obvious marketing. This makes sense.

That brings me to last Saturday and my head-scratcher. My family and I drove to campus very early, hung around until near game time, and canvassed the campus and Coliseum area. In total, we saw 3 tickets openly marketed. I also observed two others being sold. According to sources that I had consulted, local authorities sometimes discourage resell near the Coliseum, but not on campus. In fact, the tickets that I observed being resold were near the Coliseum in full view of strolling police officers. So why so few tickets openly marketed? The online sites posted a large number of tickets as late as noon on Saturday. Any ideas in the Sports Economist world?

Labels: ,

Tuesday, May 06, 2008

NCAA Football Politics 

Several years back, I thought that the process toward a playoff would have played out by now. The 1998 BCS agreement struck me as a key step toward a playoff in that it eliminated a major impediment -- the exclusive tie-in of the Pac-10 and Big Ten to the Rose Bowl. Now, ten years later, it appears that we are still at least six years away from another step as
Dan Wetzel of Yahoo! writes in his consideration of the failure semi-final/final proposal by the SEC Commissioner in Too Good to Go

In the end, according to interviews with people in the room, the decision to proceed or not probably came down to the Big East and Big 12.

The Big Ten and Pac-10, thanks to an economically advantageous relationship with the Rose Bowl until at least 2014, were going to oppose just about anything put on the table. The smaller conferences and Notre Dame were likely to support whatever the majority did as long as their access and revenue weren’t cut. The ACC was in favor of the SEC’s proposal.

That left two swing votes, the Big East and Big 12, who had they pushed for further discussion could have weakened the Big Ten and Pac-10’s silly obstruction talk – “they’ll have to pry a playoff system out of my cold dead hands,” the Ohio State president barked last year.

The interests of the Pac-10 and Big Ten are transparent enough. Wetzel exposes the "lengthening the season concerns" and other such nonsense for just that in his piece. The behavior of the Big East and Big 12 is the real question. Are they just risk averse -- not knowing very well how they will fare in such a system and therefore reluctant? Concerns about the impact on the regular season seem to be at the core:
Best I can tell, after years of discussions with the people in power by me and my colleague Josh Peter, is that while there isn’t a single reason, the oft-cited “protection of the regular season” is a critical one.
Increasing the value of some games without diminishing the value of others, is, indeed, tricky business. The current BCS system makes a lot of regular season games count. The downside is that it makes only one post-season game count. In addition, it can make winning a conference championship meaningless, even for a highly regarded conference because of too many losses for the champion. The old polling system to determine a national champion placed weights on a combination of regular season and bowl game results. A "plus-one" system as proposed might diminish the regular season's value more than a "6-plus-2" playoff involving six conferences winners (ACC, Big 12, Big East, Big Ten, Pac 10, SEC) and two at-large teams. Such a system would value regular season games by putting a premium on winning one's conference, while also putting attention on the post season.

Labels: