The big news out of the ACC is that Noitre Dame has been unanimously voted in as a member of the conference… in every sport but football (of course) and hockey. The not-so-big news in the grand scheme of things is that the ACC voted 10-2 to increase its exit fee from $20 million to more than 2.5 times that amount: $50 million.
One of those two naysayers was Maryland’s president Wallace Loh. Loh voted against the increased exit fee because it could be seen as a barrier to entry by some who may otherwise want to join the ACC (source here, another here). I can see how an exit fee per se might be seen as a barrier to entry (before I join your club, I want to know what it costs to get out should I decide to leave). But that decision by any entrant would have to be one of expectations*, not one of certainty, meaning the expected exit penalty is what matters here.
The decision to leave a conference and join a new one is already a huge decision. Old relationships have to be uprooted and new relationships have to be forged. An exit fee to the current conference will have to be paid. Coaches of programs, who have built up some “coaching capital” which would include things such as the familiarity with playing current conference programs and recruiting relationships, will have to build up new coaching capital. None of this is easily done.
So while I don’t want to completely poo poo away the effect of the exit fee in the decision to join a conference, my guess is that the average school switching conferences does not expect to leave that new conference (although TCU did just that when it left Conference USA to join the Big East which it then left to become a member of the Big XII). If an entrant thinks the chance of leaving is nearly 0, then the expected exit fee isn’t really that big a deal.
*It would also involve discounting the exit fee to its present value.
The egregiously poor call against in the Yankees-Orioles game when Mark Texeira slid into first base throws attention back on to several issues with MLB umpiring:
1. Umps utilize “models” to assist or determine their decisions. On tag plays, how early the ball arrives matters in addition to (and sometimes independent of) the actual tag. At first base, it’s a foot hitting the bag and sound of ball hitting the glove model. On average, these models cut down on errors, but they can fall prey to big mistakes, especially when something falls outside the scope of the model like a slide into first. (On a side note, I don’t buy the “physics against Texeira” stuff that diving is slower than running through the base; MLB.com’s Joe Magrane cited Usain Bolt as an example since you don’t see him diving. Well, a sprinter’s torso is what matters, not his finger tips, not to mention the track isn’t very suitable for sliding at 25 mph. Outfielders regularly dive for balls which seems to offer some evidence of the value of diving when fingertip reach counts.)
2. The hesitancy to employ replay is hard to understand. Yes, it must be utilized in a time-efficient manner. That seems relatively easy especially if a booth official is used rather than umps looking at their own calls. The umps may resist, but eliminating egregiously poor calls would not only help the game but the umps. I didn’t know Jerry Meals’ name before this call; with replay to overturn the call, I still would not know his name (or Don Denkinger, the horror!).
3. While I don’t think that Texeira’s charge about the ump wanting the game over likely holds much water in this case (given the relative importance and coverage of the game), MLB umps, while tightly screened before entering MLB and now extensively monitored are still subject to very weak incentives. They adamantly deny this as “Complex System in Place to Evaluate Umpires” discusses on MLB.com. Evaluation alone does not incentivize as this counterpoint from JohnStruebel.com on “Alderson Fought to Eliminate Umpires Like Bucknor” makes clear. That piece traces the contentious effort by Sandy Alderson in the late 1990s.
Alderson stepped in. He [Alderson] had long been known as an umpire critic. He was certain umpires played favorites. He abhorred both the warped strike zone that had evolved in the 1990s and the lack of uniformity with which even that was called wrote Bruce Weber in his 2009 book As They See’em: A Fan’s Travels in the Land of the Umpires. Alderson wasted no time telling union president Jerry Crawford changes were coming. In their initial meeting Alderson promised Crawford umpires would soon be held accountable through a MLB-generated rating system. “I didn’t believe the noting that once selected as the best, someone remained the best for the next 35 years,” Alderson told Weber in a 2006 interview.
Before Spring Training, Alderson set his game plan in motion, issuing a league-wide memo to umpires. In short, Alderson told umps to start calling higher strikes. Crawford felt the directive was out of line and beyond the league’s jurisdiction, which it was at the time. Cut to the chase: On July 14, 1999, Alderson met with umpires in Philadelphia. The meeting didn’t go well. In fact it ended with union rep Richie Phillips calling for all major league umpires resign their job en masse on September 2. By the end of the day 54 umpires signing their resignation letter (one week later 12 of the 54 rescinded their resignations), a decision that “changed major league umpiring forever.”
The head-scratcher is that after facing down the umpires and holding the upper hand on a new agreement, MLB settled for a system of evaluation but with very limited enforcement mechanisms.
The upper-echelon FBS schools continue to have a high demand for games against so-called cupcake opponents as exemplified by what Arkansas State is getting to play a couple of big programs. One was Oregon.
“It’s another reason not to schedule games like this on the West Coast,” said Malzahn, who was hired last December after three years as Auburn’s offensive coordinator. Arkansas State will get a check for $950,000 for playing the Ducks.
The other is Nebraska.
Nebraska is paying Arkansas State $1 million for playing at Memorial Stadium on Saturday the highest amount ever guaranteed to an opponent for a game in Lincoln.
Dr. Tom gives one of the reasons for the high payout.
Athletic director Tom Osborne said in an email to The Associated Press on Thursday that $1 million is the “going rate for a great many teams to play an away game with no return engagement.”
Another reason is that these small programs are likely, but not always (right Arky; right Michigan?), to receive a beat down on the field of play.
Here’s a related tidbit: what it costs Boise State, no cupcake itself, to travel to away games.
As someone who supports legal ticket scalping, I find this disappointing but not surprising.
Following the football game against Georgia last weekend, University of Missouri Police Department officers received several reports of fraudulent tickets. When compared side-by-side, the fake tickets are nearly identical to real tickets, MUPD Captain Brian Weimer said.
To ensure that individuals have purchased a real ticket, Weimer recommends that people only buy through the Mizzou ticket office or online through mutigers.com. Weimer suggests avoiding online auction sites or buying tickets from strangers.
“These fake tickets look as real as any produced by Mizzou,” Weimer said. “The fake tickets even had the correct disclaimers on the back sides. It’s also possible that the individual selling the ticket does not know it is fake. He or she might have bought the fake ticket and is trying to turn it around for a quick profit along with legitimate tickets. Unfortunately, the victim might not realize it’s a fake ticket until it’s scanned for entry into the game.”
At the Georgia game, ticket scanners recorded more than 400 “missed scans,” which could indicate fraudulent tickets.
This is the first time I can remember that happening down in Columbia. But given that the move to the SEC has made football tickets a hot commodity and the improvement in technology which makes counterfeiting tickets even easier, it doesn’t surprise me that it happened.
For me as with most fans and observers, the Dodgers-Red Sox trade that brought Gonzalez, Crawford, and Beckett west created an initial wow factor especially in view of the acquisition of Hanley Ramirez. A couple of days after, however, and even without the less-than-dominating performances of the Dodgers in the last week, does it really turn them into a juggernaut for the next few seasons?
Money matters, but money well spent matters most. Whether the expanded Dodgers payroll yields dividends for them could go either way, but it is no lock. Jonah Keri at Grantland frames this maybe yes — maybe no answer nicely:
when you throw every fiscal strategy of the past decade out the window, are you crazy … or a genius?
Squeezing out a few extra runs for pitchers like Clayton Kershaw would seem almost certain to help a mediocre club improve. However, as Keri reasons, the impact of the mega-trade may underwhelm expectations: Gonzalez may be just passed his peak, Beckett has had durability issues, Crawford is still recovering from injury.
In addition to these factors, or just bad luck in performance, the incremental impact of players can be less than observers imagine because they tend to view all impacts as complementary and don’t account for substitution effects. Only one guy can hit cleanup, no matter how many bangers you have. That may not matter quite as much in the American League with the DH. In the NL, with the pitcher in the lineup and often weaker hitting catchers or shortstops, moving Andre Ethier from hitting fourth to sixth my mean a drop in numbers or, at least, not as much of a boost as one might predict. In addition, finding the optimal balance between inputs — starting pitching, relief pitching, power hitting, situational hitting, getting on base, defense — is not all about just compiling big names. Also, the subtle differences (and random variation) that drives outcomes in the long run regular season versus short run playoffs can pour cold water on a strong regular season with a disappointing playoff.
Very recently, the Phillies went from supposedly unstoppable juggernaut to medicore. With the acquisitions of Roy Halladay, Cliff Lee, Roy Oswalt, Raul Ibanez and Hunter Pence to a team that had already won a world series, the teams seemed poised to dominate the National League. They won 97 games in 2010 and 102 in 2011, both very successful regular seasons but way short of historic. In terms of They went to and lost the 2009 Series, and slowly eroded from there. In spite of strong starting pitching, injuries to key players along with disappointing performances by some players and a weak bullpen made them mortal. They were good, even very good in the regular seasons — just not great and certainly vulnerable in the playoffs.
The Yankees of the 1980s and early 19902 illustrated that money spent is not equal to money well spent. Through trades and free agent signings, they added some of the biggest names, or, in some cases, shooting stars, of the era including position players such as Rickey Henderson, Dave Winfield, Ken Griffey, Jesse Barfield, Rok Kittle, Gary Ward, and Danny Tartbull. Some of the players, like Henderson, performed well while others were busts in the Big Apple. In the 1990s, they developed key players from their system and used their money to entice a couple of key pitchers along with customized, non-stellar free agents to become a historically great team.
Of course, these are familiar themes to the efficient money analysts that Keri notes.
The Australian Football League (AFL) finals series (or playoffs in the US/Canadian lingo) kicks off this weekend, with betting markets indicating that the field of eight is more open than in most recent years. At the business end of the season, it is always worth considering how things would be different under alternative systems used to rank teams at the conclusion of the home-and-away (regular) season.
One possibility here is if the AFL used a ‘bonus points’ system analogous to that used in some Rugby (Union) competitions (see an earlier post). Niven Winchester (MIT) and I estimated a theoretical bonus point system, ‘optimal’ in the sense of being able to reveal the truly best teams. As opposed to the current system of four points for a win, two each for a draw (infrequent) and zero for a loss; our results indicated a preferred allocation of four league points for a win, three points for a draw, two points for winning by 27 or more and two points for losing by 26 or less (however, the partition could instead be altered to let’s say 24 points (four goals) to make it more interpretable to fans).
The 2012 ladder under a bonus point system does produce a few notable differences – Collingwood would have finished 7th instead of 4th, giving them an elimination final against North Melbourne, and handing Geelong the double-chance and a sumptuous qualifying (non-elimination) final against minor premiers Hawthorn. West Coast and North Melbourne are also ranked above Collingwood under the alternative system due to these teams picking up a large number of bonus points, even though they won fewer games than Collingwood. Additionally, a bonus point system point system would have resulted in the ‘dream’ Western-derby elimination final in Perth between West Coast and Fremantle. Outside the final eight, Richmond would have been the only significant mover, climbing from 12th to 9th, forcing each of the three teams above them down a spot.
It’s not all bad for Collingwood fans, however. In the original paper (published in Economic Papers in 2010), when we used our alternative system to backtrack over our original 12-year sample, we found Collingwood would actually have fared best overall with the bonus points system, finishing significantly better in five seasons, while finishing significantly worse only on one other occasion. For the other teams, it made a significant difference either way in only two seasons on average. Niven, along with Ray Stefani (California State, Long Beach) have since used similar methodology to estimate a bonus points system for the NFL (this paper is now forthcoming in Applied Economics). Perhaps the NRL (Rugby League) should be next on the research agenda.
The other hypothetical I typically like to consider is the application of a correction accounting for the strength of schedule problem – I tackled this one for AFL data in Economic Modelling last year. If the ladder was based on adjusted wins, Collingwood would actually leap from 4th to 2nd, forcing both Adelaide and Sydney down a spot, and giving both themselves and Hawthorn easier fixtures in Melbourne against interstate visiting sides. All other rankings were unchanged here, and standard within-season competitive balance measures would have been higher (indicative of a truly less-balanced competition than realised; this owing to most of the top teams playing each other twice, mutatis mutandis for most of the bottom teams).
If nothing else, these counterfactuals help reinforce how sensitive standings can be to alterations in the criteria used to rank teams, holding fixed the results of all matches in the season. What the implications are, however, is another matter – ask 10 Sports Economists this question and you may get 10 completely different answers.
While ‘playing around with’ (for want of a better way of putting it) some Australian AFL (Aussie Rules) and NRL (Rugby League) data, something interesting emerged. Below are win-attendance correlations for the Brisbane-based NRL (Broncos) and AFL (Lions) teams over the last decade excluding this year (2003-2011), as well as the cross-correlations. Notice that the Lions get substantially more bums on seats when they’re doing well, whereas for the Broncos attendance seems to be invariant to wins. That the former conforms to the standard story, while the latter does not, can arguably be explained by the combination of Rugby League being the more traditional winter football code in Queensland and Australian Rules being the relative newcomer to that market, and the related differences in the market ‘maturity’ of both sports (despite that both teams were founded almost at the same time in the 1980s). The obvious caveat to this analysis is the small sample size.
- Broncos Win/Broncos Att.: -1.2%
- Lions Win/Lions Att. : +73.4%
- Broncos Win/Lions Att. : -35.8%
- Lions Win/Broncos Att. : -55.4%
However, the more striking result is that the Lions (Broncos) doing well is associated with Broncos (Lions) attendances being lower! Could it be that AFL and NRL demand are far more substitutable than we thought previously? My intuition makes me doubt that pricing could be responsible here, as pricing in both leagues is highly uniform between matches. Anyway, Brisbane is a natural candidate for this type of exercise as they are have both been local (notwithstanding Gold Coast) monopolies in their respective leagues over that entire sample (though a second NRL team, the Bombers, are likely to be added by 2015) and the seasons overlap almost identically. This reinforces any schadenfreudian behavior of these teams (in a business sense), that is often speculated, despite what spokespeople from those teams and leagues say. The data provides a similar picture if we go back further years, but other sporadic factors prior to 2003 interfere with the figures (Lang Park redevelopment, Super League War, Bears/Fitzroy merger, use of Carrara Oval, etc.).
Can any North American pro-sports experts out there provide any anecdotes to help support or refute this casual empirical story? As best as I can ascertain, the NBA and NHL are the best bilateral candidates to tease out such possible behaviour (though ice hockey and basketball are admittedly less substitutable appeal-wise than the two winter codes in Australia), but I cannot identify any US/Canadian city in 2012 with two (or even more) pro-sports teams from only each of these leagues. Was there any city that at any time in history did have only each of an NBA and NHL team (without having an NFL or MLB team)? If so, why was that status quo ultimately unsustainable? Any other thoughts on this?
This one’s too good to pass up. At Yahoo’s Puck Daddy blog, Greg Wyshynski reminds us that back in 2004, NHL Commissioner Gary Bettman opined that player salary restraints imposed in the “new economic system” would result in lower ticket prices. Of course, this view willfully ignores an elementary economics principle, as many of our readers know. Ticket prices are determined by the demand for attendance and the marginal cost of putting a fanny in the seat. But player salaries are fixed costs in this market, and do not influence the marginal cost of attendance for teams. Since the marginal cost of attendance is negligible, ticket prices are effectively 100% determined by demand. Lowering player salaries in the NHL through the “new economic system” should thus have no impact on ticket prices.
As Wyshynski reports, message boards preserve Bettman’s comments from 2004 on this topic.
The Bettman Ticket Price Promise tracks back to the 2004 All-Star game in Minnesota and his “State of the NHL” address, whose transcript has been preserved on several message boards including NJDevs.com right here.
It was a typically wide-ranging conversation, with the CBA negotiations taking the spotlight. But there was a special focus on the impact of a work stoppage on the fans and ticket prices:
Q. Are you prepared to make any sort of assurance to fans that if there is cost certainty, if you achieve your goals in the C.B.A., that there will be some cost certainty in terms of ticket prices, as well? In a lot of cities, it’s more supply and demand than it is revenues.
COMMISSIONER BETTMAN: I’m going to answer your question, but I’m really glad we are not getting bogged down on collective bargaining on All Star Weekend.
Every market is different. Every club’s ticket pricing structure is different. We’ve actually had some teams that have recently lowered ticket prices. I believe that our current economic system has been inflationary, not only with respect to our expenses, but with respect to ticket prices, as well. And I do believe there is a direct link.
With the right economic system we can take the pressure off of ticket prices, and I believe with the right economic system, many, if not most of our teams, will actually lower ticket prices. I believe we owe it to our fans to have affordable ticket prices…….
Q. Just picking up on the ticket prices point, an economics professor would probably say that ticket prices should be based on what a market can support and the yield; not on expenses. Can you comment on that and why it is then that teams would lower their ticket prices if salaries went down?
COMMISSIONER BETTMAN: Economics professors generally teach classes of theory in school. They don’t operate businesses and they don’t operate sports franchises. I’ve been in professional sports for 24 years, and I’m telling you, there’s a direct link between what happens in an inflationary environment where teams are losing money and what they feel compelled to charge for tickets. I have absolutely no doubt there is that link. And that’s from real-world experience and not based on abstract theory.
This will now get me in trouble with lots of economics professors in North America, but so be it.
Hah Hah! We’re having a laugh, Gary. Too bad this nonsense will taint your credibility in the current negotiations.
Luke DeCock reports that average ticket prices rose 25% in the five years following the lockout. That’s just a simple average, and it would be a great project for econ and sports students to conduct a thorough statistical analysis. But the basic point remains: player costs down, ticket prices up. Supply and Demand 1, Gary Bettman 0.
John Spry, an economist with St. Thomas University in the Twin Cities, has written an opinion piece that appeared in the St. Paul Pioneer Press. In it, he takes issue with proposals to build a new stadium for the St. Paul Saints (an independent league baseball team) and to renovate the Target Center, the arena for the NBA’s Minnesota Timberwolves.
Minnesota has some of the very best sports facilities in the nation in Target Field and the Xcel Energy Center. So why are we planning to spend more than $200 million to build a second professional baseball stadium and remodel Target Center?
Gov. Dayton wants to spend $150 million to update Target Center for the Timberwolves, $54 million to build a new ballpark for the St. Paul Saints in Lowertown and $54 million to support other sports facilities in St. Paul, such as Xcel Energy Center.
Apparently, the idea is to have both new ballparks and state-of-the-art indoor sports arenas at each end of the new Central Corridor light-rail line. This wasteful duplication shows a lack of respect for taxpayers’ dollars.
John recommends using existing facilities in the Twin Cities rather than building new ones.
A better idea would be to trade the St. Paul Saints to Minneapolis in exchange for the eventual move of the NBA’s Timberwolves to the beautiful Xcel Energy Center. The Saints’ baseball team could play in Target Field when the Twins are on road trips, and the Wild and Wolves could share the Xcel Energy Center.
John Notes that the Los Angeles Kings of the NHL and the NBA’s Lakers and Clippers all call the Staples Center home. I’d also add that the NFL’s Giants and Jets have been playing in the same stadium for years and multipurpose stadiums used to dot the sports landscape in the states. So why not try it in Minnesota? John gives three possible objections to his proposal.
First, parochial interests may object to cooperation between Minneapolis and St. Paul. Each city’s political establishment tends to fight for its own narrow interests instead of the more general interest of Minnesota citizens. Respect for Minnesotans’ tax dollars should trump parochial special interests.
To be fair, the local politicians are just that: local. Their political careers (and livelihoods) depend upon getting elected. Those of us outside the Twin Cities area cannot vote for them, so why should they care about us?
Secondly, Target Field has more seats than the minor-league Saints could expect to sell. The Saints could use only the approximately 12,000 lower-level seats between first base and third base that offer the best views.
The ambience at Saints games at Target Field wouldn’t be very good. Having a 3/4ths empty ballpark would eventually erode interest in the club, at least to some extent. The Saints could try to cover some of the seats with tarps,but that would be costly and the fact would remain that they’d be playing minor league ball in a major league-sized ballpark.
In addition, having multiple teams playing in the same park in overlapping seasons creates scheduling issues. Then there is also the problem of divvying up revenue generated by other events at the facilities (such as concerts). Obviously these problems can be overcome, but they are problems and therefore reasons why there would be some resistance by the teams.
John’s third point is one the staff here at TSE have made many times.
Finally, politicians erroneously claim that construction spending for these sports facilities will create jobs for Minnesotans. These claims ignore the basic economic concept of opportunity cost. Instead of building duplicative facilities, we could have either more productive public spending, such as improved courts or roads, or reduced taxes on private-sector investments.
I made this same basic point in my Principles of Microeconomics courses yesterday while discussing Bastiat’s Broken Windows Fallacy. John makes the point well enough, so I won’t comment further.
However, I find John’s final paragraph troubling.
When we subsidize the owners of these professional sports teams, we redistribute income from everyone to a handful of wealthy individuals. This redistribution to the rich should trouble both principled liberals and conservatives.
This redistribution from everyone to a few wealthy individuals is what would happen, and I get John’s rhetorical use of “rich.” But the argument for public support for sports should not depend on the wealth of the individuals receiving it as much as the value of the public goods nature of what is being subsidized.
From the New York Times:
Although some statistics show there are often better options on fourth down, teams continue to punt, punt and then punt some more. But what if they did not? What if the punt was punted?
Last week, San Diego State Coach Rocky Long said he might consider going for first downs when his team faced fourth downs past midfield this year. His intentions rekindled a debate about the value of the punt, a play some think is a product of coaches’ conservatism and resistance to change.
This paper examines a single, narrow decision – the choice on fourth down in the National Football League between kicking and trying for a first down – as a case study of the standard view that competition in the goods, capital, and labor markets leads firms to make maximizing choices. Play-by-play data and dynamic programming are used to estimate the average payoffs to kicking and trying for a first down under different circumstances. Examination of actual decisions shows systematic, clear-cut, and overwhelmingly statistically significant departures from the decisions that would maximize teams’ chances of winning. Possible reasons for the departures are considered.
A Moneyball-type analysis would look at, say, the salaries of punters relative to some measure of contribution to team revenue streams. If teams actually do punt too much, then I expect that teams would value punters too much and would pay them more than they “should”.
Punting on fourth down is part of the game, and until someone starts deviating from that strategy and noticeably wins because of it (“noticeably” being the primary word here), it’s use is not likely to diminish.