Lead Article of Volume in ‘Journal of Sports Economics’

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There was a nice surprise yesterday, when I discovered that my latest published article – in the Journal of Sports Economics – has been assigned as the lead article of this year’s volume (16). Signals seem to be mixed on whether this actually means anything in terms of esteem or quality judgements, but a well-known empirical regularity is that lead articles do tend to get more citations other things being equal (see, for example, Coupé, Ginsburgh and Noury, 2010, in Oxford Economic Papers), so here’s hoping.

The article itself adjusts win percentages of NFL teams to account for strength of schedule, prior to calculating standard measures of competitive balance. I find that the adjustment makes the NFL (already considered the epitome of competitive balance) look even more balanced. For the record, the details are as follows:

Lenten, L. J. A. (2015), “Measurement of Competitive Balance in Conference and Divisional Tournament Design”, Journal of Sports Economics, 16(1), 3-25.

You can view the abstract here, and e-mail me if you would like a copy.

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Hypotheticals under Arguably Better Systems

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[Archived from: The Sports Economist, 3 September 2012]

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.

Busting the AFL Blockbuster Cartel

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[Archived from: The Conversation, 27 April 2011]

The Anzac Day clash between Essendon and Collingwood has come and gone yet again, as well as the inevitable publicity surrounding the most hyped home-and-away match of the season.

You could be forgiven for thinking that it was worth 12 premiership points as opposed to the usual four.

A fresh (subtly economic) talking point was raised last week, with Kevin Sheedy and Michael Malthouse both contributing to the discussion on whether these two clubs should continue to be given a monopoly over Anzac Day.

On this note, it is rational to go even further and reflect on the broader issues and consequences of guaranteed scheduling of matches between the triumvirate of Melbourne’s privileged clubs – Carlton, Collingwood and Essendon, twice per season.

Beginning with Carlton and Collingwood in 1991 and extending to Essendon in 1993, the “cartel” had this practice enshrined, since their own attendances would rise (as they were playing other big-market sides more often than average).

It also increased the likelihood that those games would be shown free-to-air in Melbourne, and a larger share of the exposure pie.

The league’s reasoning for this practice is that it helps maximise overall league attendances and interest, and so this has been thus far in 2011 (as expected, since all three teams are near the summit of the table).

The same argument applies to matches between other local rivals, mainly the two Adelaide teams and the two Perth teams.

However, the problem with the Melbourne blockbusters specifically is the equity issue – Melbourne’s smaller-market teams (the other local rivals) get to play these financially lucrative games against the big three less often.

It is well known that these smaller clubs include a home game (home side keeps the gate revenue) against Collingwood systematically on their fixture ‘wish-list’.

As an example of the inequities caused by this system, in the years from 1997-2010, Carlton and Essendon have each played Collingwood the maximum 28 times, while Geelong and North Melbourne have each played Collingwood on only 16 occasions. In compensation for this, a blockbuster levy of $25,000 was imposed on the big three.

While the status quo is a bone of contention to many fans of the remaining Victorian clubs, the issue has not yet come to a head.

However, expansion to 18 teams next year is going to have implications for the season design. With a 22-round season, each team will play five teams twice, compared to seven previously, making it harder to justify the blockbuster guarantee under the expanded competition, even with a greatly increased levy.

Furthermore, the demand effects also need to be considered. US economist Michael Butler at Texas Christian University found, using Major League Baseball data, that there was a 7% increase in match attendances (accounting for all other factors) involving pairings of teams that had played each other less often in past seasons – that is to say fans become tired of seeing their team play any other team too frequently.

Some recent statistical models we have estimated using AFL data have produced results that indicate there is no such thing as a blockbuster ‘premium’. In other words, the big three draw large attendances to games between themselves purely because they are playing another team with a large fan-base.

However, scheduling the previous season’s Grand Finalists twice produces a significant premium (and presumably they are different teams over time), raising questions about why this pairing is not guaranteed. We also identify other improved scheduling strategies.

While there is much less reason to stop scheduling the Perth “derbies” and Adelaide “showdowns” twice (there is no economic desire for other teams to play these teams more often), the results are suggesting that the blockbuster should be reconsidered.

Rescinding the practice would also have other desirable effects, such as freeing up some of the restrictions placed on the fixture generally – these restrictions forced the league to abandon the week 1-15 full round-robin in 2008. This alteration has since created numerous anomalies that have proved to be deeply unpopular with many fans.

To soothe Anzac Day advocates, this game can still be considered sacrosanct – just in some years, it would also be the final time Collingwood and Essendon meet for the season.

Since the simplest solution of extending the season to two round-robins is impractical for many reasons, this issue has to be addressed explicitly.

NFL Even MORE Competitively Balanced than We Thought

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[Archived from: The Sports Economist, 3 January 2011]

With the NFL regular season having reached its (customarily gripping) climax moments ago, sports economists will take note, as usual, of the within-season competitive balance measures, based on the end-of-season standings.  The figures generated from these measures are often used in the literature on the effectiveness (or otherwise) of labor market and revenue-sharing policies used by leagues to maintain/improve competitive balance.

On the basis of these measures, it is generally accepted by sports economists that the NFL has been the most competitively balanced (on average) of the four major leagues over the last few decades.  However, there is continued debate as to the degree, if any, to which this outcome has been generated by various NFL policies that are not used by the other major leagues – for example, the comprehensive revenue-sharing arrangement from the centralized national broadcast contract.

The 2010 season was, according to the popular actual-to-idealized standard deviation ratio, the second-most balanced NFL season since 2002, and it is the same story if one instead uses other popular measures, such as Gini coefficients or Herfindahl indexes.  This result is favorable to those that believe in the invariance principle – that arguably, this is some (albeit very limited) evidence that the salary cap was not previously contributing much towards making the NFL so balanced.

Another policy that is often ignored in this analysis is fixture design.  One thing that distinguishes the NFL from the other major leagues is that the fixture has a strength-balancing element to it.  Specifically, as explained in the Wikipedia NFL page:

Each team plays once against the other teams in its conference that finished in the same place in their own divisions as themselves the previous season, not counting the division they were already scheduled to play.

With this in mind, one might be tempted to wonder to what extent the higher level of balancedness in the NFL is attributable to this scheduling policy.  After all, if below-average teams are playing other below-average teams more often (think: NFC West), mutatis mutandis for above-average teams, then the standings could arguably provide a distortive impression of balancedness.

In an attempt to answer this question, I extended a model from a paper just published in Economic Modelling (on the Australian Football League) to adjust the win percentages of the 32 teams, according to the strength of the schedule that each faces, prior to calculating the within-season measures.  The upshot is that the power-balancing aspect of the fixture does very little to create an illusion of greater balancedness, and that this is overwhelmed easily by other biases in the fixture, specifically the design requirement to play teams in one’s own division more often than teams in other divisions (especially so for divisions in the other conference).

Ultimately, on the basis of the adjusted win percentages, the NFL is found to be even more competitively balanced than on the basis of the original win percentages in every single season over the 2002-2009 sample, according to each of the four measures used.  Furthermore, the average difference is statistically significant.  A draft of the paper can be found here (any comments welcome).  For the record, 2010 produces the same outcome yet again (note that higher means less balancedness): the actual-to-idealized standard deviation ratios are 1.474 (unadjusted) and 1.362 (adjusted); the Gini coefficients are 0.264 (unadjusted) and 0.203 (adjusted); and the Herfindahl indexes of CB are 1.136 (unadjusted) and 1.116 (adjusted).  Furthermore, while the adjustments almost always dictate some differences in playoff outcomes, 2010 was highly unusual in the sense that the adjusted standings would have produced the identical 1-6 playoff seedings in both conferences.

Some economists argue that the NFL is, if anything, too balanced.  Therefore, you can interpret this result as you like.  Nevertheless, having repeated the exercise using NBA data and finding that this ‘unbalanced schedule’ adjustment makes no difference, we can conclude that for comparative purposes, accounting for differences in strength of schedules is an important element of using empirical major league evidence on competitive balance policies.  This is especially the case if one wishes to compare the major leagues with the major soccer leagues of Europe, in which each team plays all other teams the same number of times.