College Football Moves

Today is a big day in college football. After months of rumors and projections, the University of Colorado announced today that they are leaving the Big XII and joining the Pac-10. It remains to be seen what other schools move and to what conference. If current projections hold (Nebraska to the Big 10 and the old Big-XII South minus Baylor to the Pac-10) it leaves the rest of the old Big-XII looking for a conference to reside.

I believe the winner in all of this could be the Mountain West Conference (MWC). Teams in the MWC enjoyed success the previous few seasons in football with TCU, Utah, and BYU. With the Big-XII close to dissolving if many schools move to other conferences, it presents an opportunity for the MWC to make the move to become one of the top athletic conferences in Division I if it can convince schools such as Kansas, Missouri, etc. to join the conference.

The other big winner so far today is Colorado. If the rumors were true regarding Baylor lobbying to try and join the other Texas schools in any sort of move, Colorado could have been the school without a conference. By making the first move, Colorado guarantees a spot in a major conference.

That’s NOT a shame

It was inevitable but those of us opposed to the idea due to its economic illogicality feared that somehow it might get through anyway.  FIFA’s plan to have six “home-grown” players in a team’s starting lineup has been abandoned.

At no point was the point that protecting mediocre home-grown players only results in mediocre leagues and worse national teams, and nowhere in the media was this point made either.

So those of us with any economics education that follow football are relieved that the European Union exists to promote the free movement of factors of production, notably footballers.  FIFA dropped its plans basically because it couldn’t get around this EU legislation.

Sadly, most football fans in the UK will probably see this as another reason to dislike the EU, even though it’s one of the greatest things they’ve probably done for football, not least English football which probably stood to lose out the most given the number of overseas players playing here.

In fact, as I believe Stefan Szymanski and Simon Kuper put in their book Soccernomics, there is probably too many English players in the Premiership!  It is essentially an international league now, where the best players in the world congregate (Spain aside – but there they mainly play for two sides – Barca or Real), and hence it’s about the best possible training ground for future England stars: They get to play the world’s best players every week and have to compete with them all the time, hence they have to be good enough.

On the other hand, another argument apparently aired by Sven Goran Erikkson after England failed in 2006 was that the players from the Premiership are tired after having to exert so much effort every week: They don’t get the rest weeks of easy matches like perhaps they do in other leagues.  In that case, it’s great for England that now so many players play in the Premiership, as they won’t be the only tired team in the World Cup starting tomorrow…

More World Cup Economics and Econometrics (or Quants)

Nick’s beaten me to posting about the World Cup predictions of large financial institutions, but I’ll follow on from there.  We’re now just over 24 hours until the World Cup starts with Mexico taking on the hosts, South Africa.

As mentioned, a number of large financial corporations have placed their hat in the ring to forecast who will win the World Cup, and of course also who will be the big winners economically.  Chances are it won’t be South Africa, but that’s another blog post or two.

Anyhow, from the FT we find that Danske Bank picked Brazil based on a quants model (to the best of my ignorance, quants model basically means some form of econometric model to the rest of us?), UBS followed suit with the South Americans although JP Morgan bucked the trend and picked England to win.  If you’re interested, you can take part in a competition to try and beat the predictions of the banks here.

I have decided to make some predictions, and to use econometrics and data to do so.  I’ve estimated an ordered probit model based on around 3000 historical football matches (a whole range of competitions including importantly the qualifiers from all regions of the world).  Perhaps unsurprisingly I find that Brazil wins – beating Spain in what would be a tasty final.  England make the semi-finals, as do Germany (England losing to Brazil, Germany to Spain in a re-run of the Euro 2008 final).

Of course, this is all conjecture and probability.  We shall see who comes out on top and which model is best.

On to South Africa vs Mexico though.  Nick fancies Mexico, and I do too based on my model: It gives them a 56% probability of winning, South African only a 24% probability of winning.  But Betfair isn’t so sure: As of 11am British Summer Time, Mexico are at 36%, with South Africa at 34% (probabilities implied from the decimal odds there).  I’ve done a fair bit of research on Betfair (which will hopefully be published soon), and their implied probabilities are usually very accurate indeed.

Are they able to better take into account factors such as the first World Cup on African soil, those horns the fans will be blowing, and all the other emotions associated with a World Cup that mean events like Cameroon beating Argentina in 1990 and Senegal beating France in 2002 can happen?  We shall soon see…

Will the BP Oil Spill Taint the Olympics?

The BP oil spill in the Gulf of Mexico has been one of the top news stories for quite a while now, with the effects of the disaster being felt far and wide across the United States and the world.  Just yesterday, the New Orleans Saints, the Super Bowl Champions, went around some of the areas in which the oil spill is affecting the life of many communities to try and encourage the local residents to persevere and pull through the disaster as they had after Hurricane Katrina several years ago.  Several of the players even spoke out about the disaster and the need for something to be done about, it seems that in the U.S. right now everyone has an opinion of the oil spill as well as the company that was partly responsible for it, BP.  And BP should be worried as not only will the cost of the oil spill hurt the company in terms of their brand image, it is also going to hit them in the pocketbooks.  I was buying a bus ticket today, and the sign on the bus station even said “NO BP GAS USED”, showing that some consumers may actually be avoiding BP products.

But the question is, will people avoid the Olympics because BP is a sponsor?  That is the big question now that is being debated among the IOC, Olympic Athletes, and Agents.  While this article notes that the U.S. Olympic Committee (USOC) still has a strong sponsorship deal with BP, with the oil company giving between $10 to $15 million dollars to the USOC.  Already BP sponsorship and naming rights have started to be hidden, as the Chicago Cubs vs Chicago White Sox game, entitled the “BP Crosstown Cup” has removed the “BP” from the name of the games.  The IOC has said that BP will remain a valued sponsor, especially with the company contributing over $50 million to the 2012 London Olympic games organizing committee.  But agents are not happy, and some of the athletes are not happy, claiming that having BP tied with the Olympics will not only cause a backlash from the public, but will also lead to a “tainting” of the Olympics.

When Enron collapsed, the Houston Astros of MLB were quick to find a new stadium sponsor.  I wonder how long it will take for the IOC to follow suit.  My guess is that the IOC, as corrupt as it is, will not drop BP unless another oil company offers more money.