Toby or not to be

Measuring Competitive Balance

I play fantasy basketball. Yes I realize it is akin to Dungeon and Dragons for jocks, but I have no shame. Did I mention that I have read Twilight, but I regress, and I just lost my credibility for all topics sports. Let me try to earn that back. 

In the league, genealogically known as the Harris Ballers, it was brought to the attention of the league by Guy on a Longhorn! that

- There are 5 teams in the top half of the leader boards that are within 1 game of each other

- There are 4 teams in the bottom half of the leader boards that are within 3 games of each other

- Besides first and last place (you know who you are), everyone appears to be very evenly matched so far.

What Guy is saying is that the league is experiencing competitive balance, most notably when measuring competitive balance using the standard deviation of winning percentage. More specifically, the following equation:

Simple enough for all you stats geeks. Here are the league standings:

TEAM	W	L	T	PCT	GB
Stu- Boyz	63	37	0	.630	--
Gotham's Reckoning	54	42	4	.560	7
Not the Batum of the league	53	44	3	.545	8.5
More Wins than the Jazz	53	45	2	.540	9
Eagletown Farmboys	53	45	2	.540	9
Wenatchee Skookums	53	46	1	.535	9.5
Guy On A Longhorn!	50	46	4	.520	11
SR Puak Chomneah	48	50	2	.490	14
Los Conquistadors	45	49	6	.480	15
Wichikansistan Shazam	45	52	3	.465	16.5
Gladiators Win	41	56	3	.425	20.5
Flying Tortilla Chips	26	72	2	.270	36

Thus the standard deviation of winning percentage is approximately = .085

How does this compare to other leagues historically? First, we need to standardize it using what is called the Null-Scully measure of standard deviation of winning percentage. Simple equation, just divide the previous equation by .500/(square root of the number of games).

Meaning that the standardized winning percentage for the league is 1.71

Compared other sports

	the standardized winning percentage
MLB	1.69
NFL	1.66
NBA	2.71

So our fantasy bball league seems comparable to MLB.

But who cares about how close all the losers are? All that matters is the championship, and that seems to be already determined.

So thanks for making us losers feel like we are in good company. You have done a lot to make my day way better, about as much as that parking ticket improved my day. 

Applying sports econ to fantasy football

Sit down and pull out a piece of paper, class is in session. Today’s lesson is about competitive balance. We hear this terminology a lot and we have no idea what it means or if it is even a good thing. Let’s face it, we all want a chance to win the championship but each year there are 11 of us who deserved to be called losers. And looking at the season at the half way point, there are four teams that have a legitimate shot at winning. The undefeated Herdsmen, Ladies dig football (and handing out loses to a bunch of middle aged has been dudes), Pat man, and Kronk th Gronk. (You can break into our Sesame Street one of these is not like the other, but you all know it to be true #winningattitude #don’twastemyflavor #that’showiroll #dealwithit.)

But let me introduce a new measure of competitive balance to all you students. It is based on a little subject called statistics. It is simple enough, measure the standard deviation of winning percentage. You want an equation, I got that too.

Calculating the standard deviation of winning percentage this year shows that the Pac 12 division (std dev of wpct = .228) is much more balanced than the Big 12 (std dev of wpct = .305).

Comparing this to other sports leagues, the NBA is the most unbalanced sport with a NS standard deviation of winning percentage of 2.71. NFL and MLB have a measurement of 1.66 and 1.69 respectively.  

So what it the purpose of this post? I just want to let Blazers and Snipers know that you’re doing okay. In fact it can be argued that you are better than the Houston Astros, Tampa Bay Yucks, and the Jacksonville Jaguars.  #cheerup #itcouldbeworse

Paying College Athletes

Let's not be naive, college athletes are getting paid. While they may not be getting an hourly wage or bimonthly paychecks, they are receiving benefits for what they do. These include non-monetary benefits like tuition, room and board, health insurance, and on the job training (coaching). Some even receive monetary benefits in the form of stipends.

Often you hear hear the repeated call to the top college athletes more because they produce more revenue for the university. Once you start providing actual wages to student-athletes there are many issues that need to be dealt with. Taxes, Title IX, strikes, and the continual incentive to receive illegal payments.

So what is the solution? A former agent who admittedly paid student-athletes illegally has a solution. It seems simple and merits consideration. Here is the Link.

How to win a Super Bowl

With Super Bowl weekend fast approaching, I have thought what Indianapolis do to win the bid to host the Big Game. Jerry Jones built a $1 billion stadium with the sports world's largest big screen TV, and as a result was awarded the Super Bowl. But not every city can build a Texas-sized stadium, so what do they do to win the Super Bowl?

These two articles provide interesting insight into what cities have done in the recent years:

http://www.nytimes.com/2012/01/29/sports/football/super-bowl-eighth-graders-helped-indianapolis-land-game.html

http://finance.yahoo.com/news/how-a-super-bowl-city-is-chosen.html

Super Bowl Ratings

So you wanted the Harbaugh Bowl? While sibling rivalries are really fun to put on a national stage, is that what the suits at the National Football League office wanted? If this was the NBA or MLB, the conspiracy theorists would be shouting from the tops of very tall buildings. And people might lend an ear to them, but conspiracy theorists have no room at the table in the NFL. While the NBA or MLB rely heavily on the matchups in the championship series to drive TV ratings, the NFL does not rely on the matchups to drive the ratings.

The Neilson Company shows that the most watched television shows of all-time, and the recent Super Bowls top the list.

Program	Date	Network	Avg. # of Viewers (000)
Super Bowl XLV	February 6, 2011	FOX	111,010
Super Bowl XLIV	February 7, 2010	CBS	106,476
M*A*S*H Special	February 28, 1983	CBS	105,970
Super Bowl XLIII	February 1, 2009	NBC	98,732
Super Bowl XLII	February 3, 2008	FOX	97,448
Super Bowl XXX	January 28, 1996	NBC	94,076

The Giants vs. Patriots matchup in 2008 was understandably a record setting matchup. The Patriots were looking to become the first team to finish an entire season undefeated since the 1972 Dolphins. They had just beaten the Giants in the last week of the regular season. Tom Brady was striving for perfection. But in his way was Peyton’s little brother. It became the most viewed Super Bowl of all time.

The next year could be argued was a down year in terms of media markets making the Super Bowl. The Cardinals representing the (602) are the 15^th largest media market. Pittsburgh is the 23^rd largest market, nothing like the previous year with NY (1^st) and Boston (9^th). But that game set higher records than the previous year’s game.

In 2010, a couple other small market teams faced each other. Imagine the ratings in the NBA Finals if the Pacers played the Hornets. Talk about a media nightmare. But the Colts vs. Saints set another record of viewership based for a Super Bowl. In fact, this game became the most watched television program of all time.

In 2011, in $1 billion Jerry World (also known as Cowboy Stadium), a new record was set. The matchup between the Green Bay Packers (118^th in media market size) played the Pittsburgh Steelers. Again, another record.

Why is it that the NFL can continually post record setting TV ratings? The NFL differs between the two franchises by sharing all media revenues equally across teams. This allows these small market teams, often historic franchises, to compete with the large market franchises. The NBA and MLB allow teams to sign exclusive media deals in addition to league wide contracts. Thus the Yankees, Red Sox, and Mets capture huge revenues from media rights while other teams based in small markets are left struggling for local media revenues. As such, these leagues need large market teams to make the championship games to capture the television ratings. But not the NFL. And because of the number of viewers who watch the big game, we all can enjoy the ads.

Cincinnati Bengals, sell out using economic principles

How do you fill the stands of an NFL team?

The general consensus is that as teams win more games, the fans have a greater desire to attend the games. In economic terms, winning increases the demand to attend games. However, there are exceptions. Take the Cincinnati Bengals. They have had a surprising season, lead by a strong defense and the exciting rookie combination of Andy Dalton and AJ Green, the Bengals sit on the verge of making the playoffs. They are 9-6 and if they win their next home game against AFC North rivals Baltimore Ravens, they will make the playoffs.

Under these conditions, it should not be difficult for a team to sell tickets to home games. Turns out, it is a problem. The Bengals have an average attendance of near 42,000 which puts them last in the National Football League. Six of their previous home games have not sold out and as a result the blackout policy has been in effect, disallowing local fans to watch the games on TV.

There could be several reasons why their attendance is so low. The first is that the prices are too high. The team might have thought the demand for Bengals games was higher than it actually is, thus when they determined their price, they set it too high. This might imply that the ownership made a mistake, and are now suffering as a result. But an alternative explanation is that the ownership is quite bright and they are maximizing profits, and not trying to sell out a stadium. If the Bengals franchise operates as a monopoly, in that they determine the price and quantity of tickets sold, then it would suggest that to maximize profits they would restrict the quantity and increase the price.

But as they enter into the last game of the year, there is a need to sell out the stadium. Having a full stadium can provide a significant benefit to the home team. Think of the noise created in Seattle’s Qwest field, and the resulting false starts the opposing offense commits during the game (or the small earthquake created the stadium caused on Marshawn Lynch’s TD run last season). Having fans in the stadium might also encourage the home team to play better. And if they win this game, they go to the playoffs, which might increase the demand and profits in future years.

So what can the owner do the last game of the season to sell tickets? He can’t just lower the prices, because they are set (and think of how irate loyal fans who bought the tickets at a higher price might get). A principles of micro economics course might suggest using second degree price discrimination, that is a lower price per ticket is charged when multiple tickets are purchased. So that is what the Bengals have done. Season ticket holders can buy one ticket and get one free. This also increases the value of being a season ticket holder, and might encourage more individuals to become a season ticket holder in future years.

So while Mike Brown has been accused of being one of the worse owners of all of sports franchises (this is saying a lot with the email happy owner of the Cavaliers just upstate), I would argue that he might be pretty economically sound with his ticket pricing strategy.

How much does the Super Bowl bring to the host city?

With the World Series coming to town for a second year in a row (talk about a competitive balance problem), there is a lot of talk about what this means for the local economy. As I have read the research that has been done, I was shocked to see that the evidence is consistent in the finding that mega-sporting events do not have a significant impact on the local economy.

I would like to think that bringing in 100,000 fans to Cowboy Stadium for the biggest American sporting event. It was estimated that these fans would inject $600 million into the Dallas-Fort Worth Economy ($200 million in direct expenditures). However, Mother Nature had other plans; during Super Bowl Week she dropped two different snow storms. Events were cancelled, flights were cancelled, hotel rooms were cancelled, and the anticipation of a large impact fell faster than when I tried to walk down my inclined driveway.

After the Super Bowl the Star Telegram ran an article about the economic impact of the Super Bowl (Article can be found here). The article reports how mayors were happy to have experienced an increase in sales tax revenues in the month of the Super Bowl. While the percentages might sound good, they actually show a very small increase in actually increases of revenues.

	Sales Tax Revenue
	Feb. 2010	Feb. 2011	% change	$ change
Arlington	5,550,239	5,800,000	0.045	249,761
Fort Worth	6,634,615	6,900,000	0.04	265,385
Grapevine	2,149,533	2,300,000	0.07	150,467
Euless	658,929	738,000	0.12	79,071
Bedford	627,649	622,000	-0.009	-5,649

While not all communities are shown, it is a far cry from the estimated $200 million in estimated direct expenditures. And while it is bigger than 0, it might not be statistically different than 0.

Yankees or Mariners?

I have a soft spot in my heart for the Mariners. While I never was a fan of their team, Seattle did play against the Angels and Royals who did hold my childhood allegiance and one time and another. And I don’t like the Yankees. I lived in NY for 5 years, and no matter how hard I tried, I just could not convince myself to be a Yankee fan. I would get visible upset when Susan Waldman and John Sterling would interrupt the normal radio program to broadcast a Yankees game (I know wish the Rangers had their own Susan and John, their announcers put me to sleep after calling out a Josh Hamilton home run). In spite of this, I will try to provide an unbiased discussion of competitive balance.

Let’s turn back the clock to 2001. The Mariners had an amazing year. Their star players were a young Ichiro, a power hitting second baseman named Bret Boone, solid veterans like Jay Buhner and John Olerud, and even had the young Jamie Moyer on the mound (by young, I mean younger than he is today. He was still old in 2001). They put together one of the best single season any major league team has ever had. They won a total of 116 regular season wins (to tie the record set in 1906). To put that in perspective, only one team had 100+ victories this season. The Phillies had the best record with 102 wins.

That same year the Yankees ran away with their division, with the second placed team finished 13.5 games back. Their 95 wins was still good, 3^rd best in all of baseball. Their team had many Yankee greats: Derek Jeter, Paul O-Neal, Bernie Williams, Roger Clemens, and Scott Brosius (from Rex Putnam high school near Portland, OR; the one time that I made the starting lineup as a kid was when we played at Rex Putnam High School. We lost)

So the question is who was a better team?

	Seattle	New York
Winning Percentage	.716	.594
Runs Scored – Runs allowed	927 – 627	804 – 713

The record at the end of the regular season, clearly indicates the Mariners where the better team. They had a better offense as they scored more runs than the Yankees, and had a better defense as well.

Now let’s look at what happens when they played each other in the regular season

	Seattle	New York
Winning Percentage	.716	.594
Runs Scored – Runs allowed	927 – 627	804 – 713
Regular Season Matchup	6 wins	3 wins

Again, Mariners are clearly the better team. But they also met in the post-season.

	Seattle	New York
Winning Percentage	.716	.594
Runs Scored – Runs allowed	927 – 627	804 – 713
Regular Season Matchup	6 wins	3 wins
Conference Series	1 win	4 wins
Runs Scored - Runs Allowed	22 – 25	25 – 22

The series only lasted 5 games, as the Yankees won the series by a 4 – 1 margin. So when it really counted, the Yankees won. But as you look at the numbers of the series, the Yankees only scored 3 more runs than the Mariners for the entire series. This series was a lot closer than the final outcome shows.

In fact, the Yankees went on to win the World Series that year and furthered the thought that the Yankees are evidence of a competitive balance problem in baseball.

By most measures, these teams were fairly evenly matched, with the edge really going to the Mariners. The main difference was that the Yankees won their games in October, and as such won, the championship. So looking at only championships as a measure of competitive balance, can skew the actually balance that exists in the league.

We are the champions, no time for losers

At the beginning of each season, fans have an honest belief that their team has a chance to win the championship. This is the year!! We will overcome the curse of the goat which Steve Bartman single handedly kept going, we will show the world that defense wins championships (i.e. we have no offense), or this is the year our prospects become superstars. Not to be the bearer of bad news, all but one of you are wrong.

Championships matter. So to argue that competitive balance exists can be an argument that every team has a chance to win the championship. And if this is true, you should see different teams win the championship each year. Using this measure which sport would you think has the most competitive balance?

Let’s look at the past 31 years and compare what percentage of teams has actually won a championship

	Won a championship	Played for Championship
MLB	63	86
NBA	28	60
NFL	47	78

My prior belief was that baseball has the least competitive balance, at least that is what I hear from my television and read on my computer. But it is clear that baseball has had a higher fraction of their teams win a championship in the past 31 years.

What about recent history. Let’s look at the past 11 years

	Won a championship	Played for Championship
MLB	30	50
NBA	19	37
NFL	25	50

Story does not change; baseball has the most competitive balance. Basketball has a much lower fraction of teams that win the championship.

While these numbers show how championships can measure competitive balance, they do not make the case that this constitutes a “problem.” Is it problematic if the Lakers, Celtics, Heat, and Spurs win the championship every year?