Tumultuous Times in Scotland

Scotland isn’t really the hotbed of football (soccer) it perhaps once was, but in the last few months Scottish football has been shaken to its core as one of its two most famous and successful clubs, one part of the duopoly that is the Glasgow domination of Scottish football, Rangers, has gone bankrupt. Faced with a huge unpaid tax bill, the only option left to what remained of Rangers was to declare bankruptcy and start again.

The interesting news this last week is where they have to go to start again. They initially applied to be admitted straight into the SPL (Scottish Premier League), the top flight, but this was rejected by the members of the SPL. Even members of the first and second divisions rejected the application too. Rangers have been accepted to the Scottish Third Division, a full four divisions below where they graced pre-bankruptcy.

Stats abound, but perhaps the most amusing lists average attendances for Rangers and their new opponents in the forthcoming season:

Rangers’ average attendance is a full 46,000 more than their forthcoming opponents, none of whom can boast an average attendance even in four figures. Scottish football acts as a pyramid system and hence within four years, Rangers should expect to be back in the SPL. But in the meantime it’ll be an interesting time for them.

This whole sorry, sorry saga highlights not just financial mismanagement but much more. Some SPL clubs were inclined to allow Rangers back in; after all, one of their biggest paydays each season was when Rangers visited. However, the animosity amongst the fans of most clubs led to their owners voting against Rangers. This must be a classic case of financial and sporting objectives clashing – financially the decision was a no-brainer, but to just allow a club formed from the dust to enter the highest division in Scottish football? Then what will be the consequences of Rangers being absent? Rangers and Celtic have shared between them the vast majority of SPL championships over the years, in fact no other team has won the Scottish league since the early 1980s. Will Celtic simply win the next four league titles, or will other teams step up and begin to compete with the previously dominant Glasgow giants?

Whatever happens, it does promise to be a fascinating few years in Scotland…

Summer College Baseball?

The 2012 NCAA Men’s Baseball Tournament begins tomorrow as 64 teams will compete for the eight coveted spots in Omaha at the College World Series.  Purdue and Michigan State are this year’s representatives from the Big Ten Conference.  A few months ago Minnesota coach John Anderson mentioned the Big Ten would be better off if it scrapped the current baseball structure and committed to playing its season during the summer. The comment sparked an interesting debate among college baseball enthusiasts.  It should come as no surprise it is easier to play baseball in Big Ten cities such as Minneapolis and Ann Arbor in June than it is in February when the college baseball season begins.  However, this would guarantee the Big Ten would not participate in the College World Series.

There are no NCAA rules against playing in the summer.  The only restriction is a school can play a maximum 56 regular season games.  The Big Ten is also floating the more believable option of playing some regular season games in the fall.

The Big Ten is regularly a one to two bid conference in baseball.  It has not had a team in the College World Series since Michigan in 1984 and the last time a Big Ten team won a National Title? Well, you have to go back to Ohio State in 1966.  For reference, this year the SEC had eight teams in the field of 64.  Last year it sent three teams to the College World Series (Champion South Carolina, Runner up Florida and Vanderbilt).  The gap is probably too far to make up at this point unless major reform is undertaken.

While the idea is probably not plausible, will playing in the summer be a difference maker for the Big Ten?  One would assume attendance would increase if baseball was played during the warmer months.  There may be a spike with programming from the Big Ten Network as time slots would be easier to fill during the summer.  Would that keep northern baseball players closer to home?  Another question to consider is would other northern conferences be willing to follow suit?  My guess is no on both.  The allure of playing in Omaha, no matter how remote the odds, will always trump the alternative.

Kentucky Derby

Today is the Kentucky Derby, one of the biggest horse racing days of the year. The sport of horse racing has been around for centuries, but has been struggling over the past two decades for many reasons. However, the “Triple Crown” races has maintained its constant demand and attendance from consumers.

In Forbes Magazine this week, there was an article regarding betting and the Kentucky Derby. As the article points out, the one close to certain thing at the Kentucky Derby is that the favorite will not win. Over the past 32 derby races, the favorite emerges victorious only 4 times. The article goes onto state “And the betting favorites haven’t even been good bets to place or show.”

The article states the main reason for why favorites tend not to be good bets to win, place, or show is small sample size. These horses are young and have not run in very many races. Therefore, success in early races tends to make these horses the favorite when in reality, there is not much information known about these horses and how they will race against some of the top horses in the country.  So if you sit back to watch the derby, remember that history tells you that the outcome of this race is far less certain than the final betting lines.

Crazy Times in the Champions League

Last night was the final round of group stage matches in the UEFA Champions League, and in many ways was truly remarkable. The headlines are surely taken by Manchester’s exit from the tournament – City might have been expected, given they had a tough group and some disappointing results, but United’s was truly shocking, falling to FC Basel to finish behind the Swiss team as well as Benfica of Portugal in third place.

Perhaps more intriguingly, however, is the possibility of match fixing in the rermarkable game between Lyon and Dynamo Zagreb. Lyon entered the game needing a win and to turn around a goal difference NINE goals against them in order to qualify ahead of Ajax.

Ajax lost 3-0 to Real Madrid, leaving Lyon needing a six goal winning margin in Zagreb, which they duly managed, with six second half goals, to win 7-1. Of course, that could just be chalked down to a truly remarkable second half performance, but people are smelling rats.

And, it would seem, not without justification. Zagreb had a man send off in the first half, and after the fifth Lyon goal went in, footage clearly shows the Zagreb keeper winking and giving a thumbs up to a defender on his team.

It doesn’t look good, and apparently it is being investigated, thankfully. The question for me though is, if you are going to fix a match, surely you make a little bit more effort to hide it? Losing 7-1 at home is notable, losing by just enough for a team to overturn a NINE goal deficit, doing it all in the second half, on the last night of the group stages, just makes no sense. You want to hide what you did so you can get away with it. That or you’re just plain stupid?!

NHL Realignment

Reports surfaced last night that the National Hockey League has approved realignment. Instead of having two conferences with multiple divisions, the league is having four conferences with no divisions. For a list of the conferences, see this TSN article.  The NHL placed an emphasis on time zones and geographic rivalries with the new alignment.  With the alignment also comes a couple of additional changes.  First, the schedule will be more balanced in that teams will play all member teams at least twice (home and home).  Within the conference, teams will play other teams 5 or 6 times.   Second, the first two rounds of the playoffs will consist of intraconference matches, which effectively means a “pod” type system.

The exact financial implication is unclear at this time.  However, one can speculate that overall travel costs for the regular season will be lower for the entire league with a more balanced schedule.  Second, having the first two rounds of playoffs with close geographic competitors not only reduces travel cost for participating clubs, but also should increase the competition between the teams.  Overall, realignment looks like a positive step for the NHL and its clubs.  Hopefully, they do not take a page out of the Big Ten Conference “playbook” in terms of naming the conferences.

Miami Marlins and the SEC

Things in South Florida just got more interesting both on and off the field. Known for a small payroll, the Florida (now named Miami) Marlins have signed two of the top free agents for next season. This is prior to opening a brand new stadium beginning next season.

Last week, a story by Jeff Passan of Yahoo Sports reported that the Securities and Exchange Commission (SEC)  issued subpoenas to the Marlins organization to understand the agreement reached by the city and the team on a new stadium. Among items that the SEC wanted to see was the Marlins financial records, communications with the MLB commissioner, other meeting minutes, and campaign contribution.

Passan outlines the Marlins story up to the SEC subpoenas. The Marlins wanted a new stadium because they were supposedly losing money. The Marlins threatened to relocate the franchise if the city did not provide the team with a new, baseball only, stadium. The local government requested financial records from the Marlins but were denied. However, the government still voted to build the new stadium which also gives the Marlins all stadium related revenue.  The stadium is expected to cost the city 2.4 billion dollars. When Deadspin posted team financial statements last year, the financial statement of the Marlins showed that the Marlins made tens of million of dollars. Now the SEC has stepped in to investigate. As Passan writes:

While the subpoenas issued by the SEC do not explicitly detail the purpose of the investigation, the feds’ motives are evident: They want to understand how, exactly, a group of county commissioners agreed to fund 80 percent of the Marlins new stadium, which cost more than $600 million, without ever seeing the team’s financial records – and whether bribes had anything to do with it.

It remains to be seen what the SEC investigation will conclude.  This situation has the potential to be very ugly for the Marlins, the city, and Major League Baseball.

MLB Changes and Houston Astros Sale

Last week, MLB approved the sale of the Houston Astros as well as some other policy changes. According to an article by the Associated Press, the Astros were sold for 750 million dollars. MLB executives, however, wanted the Astros to move from the NL Central to the AL West. By moving the Astros into the AL, both the NL and AL will have an equal number of teams (15). With 15 teams in each league, that means that interleague play will take place throughout the entire season and not during specific times in the season. Also, MLB is also expanding the playoffs by two additional teams (1 in each league).

What makes the Astros sale interesting is that MLB would not approve the sale unless the new owner agreed to move the team to the AL West Division. As a result, the new owner negotiated a 70 million dollar discount on the franchise sale price according to reports. Half of the 70 million dollars is being paid by MLB and the other half by the old team owner.

What makes a change to the AL worth 70 million dollars to the owner? Certainly, there may be some additional traveling involved as Houston will have to travel to Seattle. It is approximately 1900 miles to Seattle by air compared to 1150 to Pittsburgh, the furthest team from Houston in the NL Central.  Houston will also have to travel to Oakland and Anaheim compared to Chicago, Milwaukee, Cincinnati, and St. Louis. By moving to the AL West, Houston will play the Texas Rangers, their geographic rival and new division rival, more times than just one series per year under interleague play.  Playing the Rangers should provide the Astros with increase revenue for these games to help offset some travel cost.  The question remains as to why changing leagues “costs” 70 million dollars.

IJSF Access Statistics for September

Here are the September access statistics from RePEc:

Page views (file downloads) on participating RePEc services:
Last month:    395 (109)
Previous month: 301 (63)
Last 3 months: 994 (254)
Last year:     5929 (1582)
Since start:   26284 (6913)
Simple impact factor: 0.27
Recursive impact factor: 0.01
Discounted impact factor: 0.12
Recursive discounted impact factor: 0.01
h-index: 2

Rank	Journal Article	File Downloads			Abstract Views
		2011 08	3 months	Total	2011 08	3 months	Total
1	Pay and Performance in Professional Road Racing: The Case of City Marathons Bernd Frick and Joachim Prinz	11	12	149	13	18	331
2	What Drives the Value of Stadium Naming Rights? A Hedonic-Pricing Approach to the Valuation of Sporting Intangible Assets Bill Gerrard, Milena Parent and Trevor Slack	8	20	401	16	44	982
3	The Tax Benefits of Hosting the Super Bowl and the MLB All-Star Game: The Houston Experience Dennis Coates	7	10	234	15	29	906
4	Economic Multipliers and Mega-Event Analysis Victor Matheson	5	8	103	5	12	316
4	The Financial Crisis and English Football: The Dog That Will Not Bark Stefan Szymanski	5	5	5	7	7	7
4	Evaluating Inelastic Ticket Pricing Models Stacey Brook	5	9	155	7	18	407
7	Performance, Salaries and Contract Length: Empirical Evidence from German Soccer Bernd Frick	3	3	3	10	10	10
7	Developing a Profitability Model for Professional Sport Leagues: The Case of the National Hockey League John Nadeau and O’Reilly, Norm	3	6	184	7	12	524
7	The Auctioning of TV-Sports Rights Harry Solberg	3	3	106	6	8	309
7	Book Review: The Economics of Staging the Olympics: A Comparison of the Games 1972-2008, by Holger Preuss Victor Matheson	3	8	150	8	20	352
7	Betting Exchanges: The Future of Sports Betting? Ruud Koning and Bart van Velzen	3	18	185	15	44	619
7	Guest Editor’s Introduction: Sport Finance and Gambling Brad Humphreys	3	3	48	6	13	623
7	Book Review: Economics, Uncertainty, and European Football, by Loek Groot Arne Feddersen	3	4	40	3	12	133
14	Facility Finance: Measurement, Trends, and Analysis Andrew Zimbalist and Judith Long	2	5	141	5	15	467
14	Executive Interview: David G. Brooks Andrew Choi	2	4	31	7	22	150
14	Using Betting Market Odds to Measure the Uncertainty of Outcome in Major League Baseball Rodney Joseph Paul, Andrew Weinbach, Richard Borghesi and Mark Wilson	2	2	29	8	12	120
14	Economic Impact Analysis versus Cost Benefit Analysis: The Case of a Medium-Sized Sport Event Marijke Taks, Stefan Kesenne, Laurence Chalip, Christine Green and Scott Martyn	2	2	2	6	6	6
14	Country-Specific Goal-Scoring in the ‘Dying Seconds’ of International Football Matches Jan van Ours and Martin van Tuijl	2	2	2	3	3	3
14	Book Review: The Economics of Association Football Nicholas Watanabe	2	3	108	2	9	296
14	The Novelty Effect of the New Football Stadia: The Case of Germany Arne Feddersen, Wolfgang Maennig and Malte Borcherding	2	7	145	7	20	397
14	Do Football Clubs Benefit from Initial Public Offerings? Dirk Baur and Conor McKeating	2	2	2	5	5	5
14	‘Defense Wins Championships?’ The Answer from the Gridiron John Robst, Jennifer VanGilder, David Berri and Coby Vance	2	2	2	4	4	4
14	Ticket Prices, Concessions and Attendance at Professional Sporting Events Dennis Coates and Brad Humphreys	2	9	547	7	31	2,046
14	A Bibliometric Analysis of Sport Economics Research José Santos and Pablo García	2	2	2	5	5	5
14	Does One Simply Need to Score to Score? David J. Berri, Stacey Brook and Martin B. Schmidt	2	2	70	3	7	160

Wimbledon Bonds

Here’s an innovative sports financing idea: generate capital by selling bonds that pay the bondholders in tickets, not cash.  The All England Lawn Tennis and Croquet Club, the people who organize Wimbledon, have been raising cash since the 1920s by selling bonds that come with tickets to the annual tennis tournament.  In the latest issuance, the club raised about $90 million through the sale of 2,500 of these bonds.  Holders get a ticket to each day of the tournament that can be used or resold.

Qatar World Cup costs already estimated at £138 billion

Earlier this morning, ESPN soccernet reported that German financial analyst Dr. Nicola Ritter has told people that the cost for the Qatar 2022 World Cup is estimated to be around £138 billion.  This of course includes the construction of an entire new city as part of preparing the small country for the World Cup.  The city named Lusail is planned to be an “iconic city”, which would have a population of around 200,000, specially built to celebrate the gulf region culture and heritage.  You can visit the website for the city of Lusail here.  The city itself is said to cost about £28 billion, the big question is, where does that other £110 billion go?

The details presented by Dr. Ritter note that £107 billion will go to stadiums and facilities, and £31 billion will go infrastructure.  In the numbers, one which stands out greatly is that the Air Conditioning for all of the stadiums alone will cost about £30 billion, or over 21% of the total cost of hosting the World Cup.  While Heating, Ventilation, and Air Conditioning (HVAC) are one of the major costs for a new sport facility, the fact that Qatar will be facing extreme heat during the summer, and promised that all stadiums would be cool enough means that Qatar looks to be investing heavily in some major air conditioning.  From another perspective, Qatar will have 12 stadiums in operation during the World Cup, which means they will be spending  £2.5 billion on average for air-conditioning for each stadium.  That is more just on air-conditioning than the the cost of any other stadium in the world.  Qatar is a hot place, so it’ll be interesting to see if the AC that they are spending all this money on will really work.