Soccernomics: A Chat with Simon Kuper

Back in 2009 we had a brief chat with Soccernomics author Simon Kuper.  The book was first published in October, 2009 and continues to cited in soccer circles.    Soccernomics combines economics and soccer to provide an interesting look into the use of data in sports and takes direct aim at some of the longest held beliefs of fans and soccer managers about the evaluation of players.  The book also looks at a number of financial “myths” that surround the game, including the financial benefits of hosting big soccer events and the profitability of sports franchises.   Mr. Kuper is a sports columnist for the Financial Time sand his book, “Football Against the Enemy” won the William Hill Sports Book of the Year Award in 1994.  Given the recent excellent guest post from Dave Laidig about Opta, we thought that Kuper’s thoughts on stats in soccer were especially interesting.  Here are some excerpts from that interview.

Footiebusiness.com: You make a compelling case that big sporting events (e.g. the World Cup), do not provide the financial benefits that are so often touted when efforts are made to secure financing for such events.  Does that analysis change when the U.S. is the prospective host country?  Given the size of U.S. stadiums (and thus larger crowds), and the existence of sufficient infrastructure, do American communities have a better chance of deriving a financial benefit from hosting such a big event?

Simon Kuper: I think the financial benefit would not be very big in any case. I mean, with tourists, conferences and business travelers, the main American cities get a lot of custom most of the time. A world cup probably wouldn’t boost their numbers hugely. Also, during a world cup “normal” travel usually falls off, as business people and tourists don’t go to the country for fear of higher hotel prices and of soccer hooligans (there’s always lots of publicity about soccer hooligans, even though they tend not to appear much in reality at big tournaments). So I think the boost would be limited.

But it is true that because the US already has the infrastructure and the stadiums, its cost would be minimal too. It wouldn’t have to build loads of new stadiums with expensive hotels and access roads etc, like Japan did in 2002 or Germany and South Africa since. That’s a big advantage. I suspect the world cup 1994 cost very little and boosted the US economy by very little. It wouldn’t be a bonanza for any American town, but it probably wouldn’t hurt. In South Africa, by contrast, taxpayers are paying billions desperately needed for other things to build world cup stadiums that after 2010 will be empty almost forever.

FB: The book discusses the increased use of statistical data among managers/scouts in the game of soccer and in addition to figures such as Arsene Wenger, you reference familiar baseball names such as Bill James and Billy Beane.  Statistics and numbers are integral to the enjoyment of many baseball fans.  Does soccer lend itself to a similar “numbers culture”?  Are there statistics that casual soccer fans can embrace as a way to further understand and enjoy the game?

SK: There are fewer stats in soccer than in baseball or cricket, but the number of stats is growing. In the past we only really had goals. Now companies like Opta and Prozone produce measures for each game of how many kilometers each player ran, how many tackles and passes he made, etc. This info is proprietary and they sell it for lots of money, but sometimes newspapers buy it so fans get to see it. There’s interesting stuff there, even though those stats don’t tell you much about a player’s worth. Clubs have been trying to mine these stats for knowledge, and as far as I can see, they have discovered that running more kms than the opposition does not correlate with winning matches, possession doesn’t correlate with winning matches, tackles are not a good indicator of a good defender as e.g. Paolo Maldini rarely made any tackles, and so on. Some data are useful: e.g. how many of a striker’s shots are on target is very telling (I think Eto’o does best on this measure) and if your team sprints greater distances than an opponent during a match, that does correlate with winning.

But definitely soccer stats are at an early stage. There’s nothing like in baseball or cricket. What we found very interesting in our book was the off-the-field stats: e.g. correlating players’ wages with league position, and finding that wages explained almost entirely where a club finishes in the league. In other words: high wages win matches; the rest is just noise. By contrast, a club’s transfer spending doesn’t predict where it will finish in the league, because so many transfers go wrong. That was fascinating to me. This was data that Stefan, my co-writer, had assembled. I loved it because as you know, in soccer people generally just talk and spout opinions, but nobody has data. Stefan does.

FB: You effectively argue that owning a professional sports franchise is not a profit making enterprise.  Do team owners make money through appreciation value?  If they hold their teams for a number of years, can they make money?

SK: I think the best analogy is with the art market. Buying a soccer club is like buying a painting. It gives you status among your rich peers, and though it won’t give you an annual return, there’s a fair chance that after a few years you’ll be able to sell it at a profit to another rich man in search of status. That’s the best business model in soccer, because the model of annual profits hasn’t worked for anyone except Man United. Of course you’re betting on the price of soccer clubs rising like the price of art, but in both cases that has largely happened as both markets go global: just as there are more Indian and Russian billionaires buying art now, there are more Arab and Russian billionaires buying soccer clubs. (OK, the art market took a massive hit last year, but leaving that aside for the moment.)

FB: Finally, given the amount of money brought in through television rights, has match attendance stopped being a primary revenue source for teams?

SK: You’d have to look at the numbers, and it differs per club and per league, but I think that for many clubs that is now true. I think Barcelona and Real Madrid each get somewhere over $200 million a year from selling TV rights. I very much doubt that they get that from match attendance, despite their giant stadiums. And it’s easier to grow the TV market than the live attendance market, because in TV your potential audience is the world – people in LA or Shanghai watching on the sofa or in bars – whereas there’s a limit to the amount of people you can pack into a stadium. More than about 100,000, and the people in the top tiers can’t really see anything. So the future of profit growth in soccer is most probably TV. But our book isn’t so much about profits, because the vast majority of clubs don’t make any. What interests us is what data can tell you about the game itself, and the silly decisions that clubs make.

Thanks to Simon Kuper for some great insight and responses.  While we don’t agree with everything in the book, we do believe it makes for a great read and great gift for soccer fans and fans of all sports.  For more about the book, click here for an interview that Mr. Kuper did with the New York Times.

Soccer Business Bits: BMO Triples Down, Re-brand for Fox & More

The Montreal Impact and BMO Financial Group have announced that BMO will become the presenting sponsor of the Montreal Impact when the team kicks off its inagural MLS campagin in 2012.  Already the presenting sponsor of TFC and with a stadium naming rights deal in Toronto, BMO is continuing its significant investment in MLS.  Recall that Vancouver announced BMO as its initial founding partner.  The four year deal focuses  on the Whitecaps youth soccer initiatives.  The five year deal with the Impact will include the BMO name on Impact jerseys, on game tickets and throughout Saputo Stadium.  BMO customers will also have special privileges at the park.  BMO will also have a strong role in Montreal area youth soccer programs.  The 2012 Impact jerseys with the new BMO logo will be unveiled during the upcoming Summer. According to the team’s website, “BMO’s partnership with the Impact fits perfectly with the institution’s grassroots support of more than 900 girls’ and boys’ teams across Canada. To make this commitment to young people even more tangible, BMO will introduce the BMO Team Up with the Impact program that will enable young players from local clubs to attend the Impact’s home matches in a dedicated BMO seating area.”

Elsewhere, Fox Soccer Channel has announced a complete rebrand of its identity, including a name change to Fox Soccer. The new look, on-line presence and graphics will be unveiled on August 13.  According to the press release accompanying the announcement, FOX Soccer’s makeover includes new studio sets and improved on-air graphics packages.   The new identity will include re-designed logos, upgraded studio sets and a high-tech on-air graphics package.

Finally, Eric Hassli’s recent wonder goal bears mentioning, as the strike has become something of a national and international sensation.  The goal featured on multiple ESPN platforms, been viewed by millions on YouTube and been featured on broadcasts around the world.

Guest Post: Improving MLS Quality by Leveraging its Partnership with Opta

We are once again fortunate to have a guest post from Dave Laidig.  Dave is a corporate contracts attorney who occasionally submits posts about soccer.  He resides in Minnesota, and laments the Panama result.  Once again, thanks to Dave for his great insights. 

Soccer is known as the beautiful game, an implicit acknowledgment of the art underlying the sport.  And art frequently defies objective evaluation.  Can we describe Picasso with numbers, or affirm that Hemingway is 20% better than John Grisham?  We know such descriptions are futile.  And we carry that sense of futility over to the art of soccer.  We all appreciate a no-look heel pass, but how do we value the consistent vision of a midfielder?  And this is, quite literally, the million-dollar question. 

However, soccer has an objective end product – wins.  And wins are the result of objective events, goals scored or allowed.  The events of the game are defined, and their contribution to the ultimate result can be measured through performance metrics.  This data is valuable, as demonstrated by the recent partnership between Opta and MLS.  And as discussed in earlier commentary, some of this value is derived from the marketing benefits of advanced game information.[1]  But a large part of the value of better performance data is in the area of labor management.  Specifically, advanced performance metrics can adds accurate, objective information that can supplement talent evaluation, increase cost efficiencies and support pricing for transfer sales

Importantly, the performance metrics are valuable if they intrinsically describe the game; such as data of the fundamental elements of soccer like touches, runs, passes, player location, time, and goalie actions.  Further data can describe a pass (square, cross, forward lob) or a defensive touch (tackle, deflection, header) or similar actions. 

Using the elements of game action, derivative statistics can also be developed that convey more complex concepts in soccer.  For instance, upon merely counting the types of passes and whether they are successful, one can report the number and percentage of completed passes, or compare square passes and advancing passes.  Additionally, one can track linking “creative” passes, or advancing passes that allows the recipient to complete their pass (or score).  Thus, this creativity can be defined as putting the recipient in a position to advance the possession.  A measure such as “creative passes” allows a person to quickly understand the context of a game, and how a player impacted the result.  

And these measurements are just the initial, first-tier types of measurements.  With further analysis of a season’s worth of data, one can determine which game elements affect the game outcome, and by how much.  Additionally, this same analysis can be used to determine which game elements affect player salaries, and by how much.  Thus, by comparing the game data with the salary data, then one can identify inefficiencies in the labor market.[2]  Ultimately, a savvy manager would use the data to exploit the labor market.

Most businesses evaluate the performance of its employees with metrics.  A company may measure production rate, sales, or even customer service.  As a business, Major League Soccer is no different in this regard.  MLS can determine the value of its players through scouting players, film study, or evaluating some of the few objective statistics available, all labor-intensive methods.  Some MLS employees – the players – perform their job in a very public way, and success is easier to understand.  Consequently, MLS can identify the best players available (and evaluate their relative value) on the field, perhaps even determine which position on the field leads to the greatest success for a player by using performance metrics. 

As a pub mate recently explained to me, some are able to evaluate the players just by watching the match and feel that objective data is unnecessary.  And it’s certainly true that expert observers can meaningfully evaluate a game and its participants.  However, it takes staff time to watch every single game, which becomes a daunting task if one considers evaluating talent in numerous leagues overseas.  Using metrics can allow the same staff to cast a wider net.  And even in the video presence of a stellar 90 minutes, one cannot tell if the game was an aberration, or a representative display.  And for players with some weaknesses – which makes up almost all players not named Messi – how do we decide the relative value of strengths and weaknesses?  How will results in a different league translate to a current one?  While trained experts can provide answers, in the current environment it becomes increasingly difficult to offer more than mere speculation.

In deference to my drinking buddy, advanced metrics will not replace professional evaluation, made through training time or scouting, but should supplement professional evaluation with objective, relevant information.  Of course, no method of predicting future value is perfect – indeed, an injury can derail the best laid plans – but adding information can make the evaluation process incrementally better.  And with the size of contracts increasing, and the total number of evaluations made across the league, an increase is evaluation efficiency can yield strong dividends.

As nothing in life occurs without cost, advanced performance metrics need to be compared to other talent evaluation methods, such as extra scouting, team trials and additional film study.  Compared to the costs associated with other talent evaluation methods, the return on investment for advanced metrics is favorable.  For example, MLS had more than 70 contracts over $150,000 in 2010.  A certain percentage of these contracts will be “busts”; or players who do not perform to their expected contribution level.  Advanced performance metrics may pay for itself – independent of any marketing benefits – if the costs of advanced metrics are less than the reduction in “busts.”  In other words, the league may come out ahead if it spent $200,000 for its advanced metrics, and avoided 2-3 busts with top-heavy contracts.  Additional revenue may also be generated by identifying undervalued talent which can lead to a profit in the transfer market.  Further, more specific, objective information also can support the value of MLS players on the transfer market.

Fully incorporating data analysis into the labor management function, using data provided by Opta or within each team’s scouting apparatus, can lead to many benefits for MLS.  As early adopters, MLS will be in a better position to determine the value associated with a performance measure and exploit inefficiencies in the market.  Also, as a league with comprehensive statistics, MLS players will have the potential for higher demand as more information leads to more accurate predictions of performance – and serves as an equalizer for players that get less media attention.  And while in-depth analysis, repeated again and again, can indentify higher performing players, the development of objective performance data can only benefit decision-makers as they evaluate talent.  Further, because the metrics are objective and consistently applied, the empirical value to the MLS can be demonstrated and lead to even better performance metrics.  Investing in the quantitative analysis of advanced in performance metrics is in the league’s interests.  Ultimately, standardized, meaningful measurements of performance can lead to an improved product at a better value. 

 


[2] The same process was followed by the Oakland A’s, described in Moneyball, where the A’s management determined that on-base percentage (and walks) were important to wins but were undervalued in the market. 

The Monday After

Another busy soccer weekend here in the States, with MLS, WPS and Gold Cup action.  Before we take a look at attendance, there are a couple of other stories worth noting.  We’ll start in Portland, where the Timbers have cut a great pair of commercials with their presenting sponsor Alaska Airlines.  The commercials are entertaining and the priority bording offered to fans wearing a Timbers jersey further cements the relationship between the team and the sponsor.  The airline is the first domestic carrier to sponsor an MLS team.   The arrangement includes multi level digital advertising at the renovated PGE Park and a role in the Timbers’ youth set-up.  Alaska Airlines employs approximately 2,300  employees in the Portland area.

On the attendance front, Red Bull Arena saw a solid crowd of just over 21k as the Red Bulls edged New England.  This followed more than 18k at LiveStrong Sporting Park for the stadium opener.  Philly had another great crowd a PPL Park, with more than 18,500 in attendance. 14k plus were at RFK for a DCU loss, while more than 19k were in Houston for the Dynamo.  Portland saw more than 18k, while the Galaxy managed to top 20,000 at the Home Depot Center.  Columbus was the only drag on attendance, with another sub-10k crowd mid-week.  However, the team rebounded nicely with more than 13k on Sunday.    Seattle saw its ususal big number, with more than 36k at Qwest.

The US Men were upset by Panama on Saturday night.  More than 27,700 were at Raymond James in Tampa to see the match.

Soccer Business Bits: LiveStrong Opens, Citi Field Hosts & More

The curtain went up at LiveStrong Sporting Park on Thursday night just after 10:00.  Almost 18, 500 were in attendance at the inagural match providing a lively atmosphere.  ESPN2 did an adequate job showing the new stadium, including shots of the locker rom, concourses, player entry tunnel and cheering crowds.  The stadium looked and sounded great on television (although crowd mics seemed rather limited) and the outside images of the facility looked inviting.  ESPN included Lance Armstong and Chad Ochocinco pictures as part of their opening.  The broadcast team did a solid job of pointing out  features of the stadium at the start of the broadcast.  LiveStrong Sporting Park will be a great addition to the Soccer Specific Stadium universe in the United States.

There has been plenty of talk about the prospects of an MLS expansion team in New York.  Among the suggested ownership candidates is Fred Wilpon, the patriarch of the Mets ownership group.  While the Wilpons’ financial troubles are well known, the family has finally dipped the toe of their new stadium, Citi Field, into the soccer waters.  Now a second game is on the way.  Almost 40k were at Citi mid-week for an international friendly.  Other than the Mets home opener, it was the biggest crowd of the season at Citi. Now the Mets have announced a second soccer event this Summer.  Citi will play host to Club America and Juventus in July.

One final expansion note.  In the wake of the US Gold Cup match at Ford Field this week, there have been a number of stories about the possibility of MLS expanding to Detroit.  The recently purchased Pontiac Silverdome has been proposed as a venue, although with some significant modifications.  For more on this proposal, click here.

 

 

The Gold Cup v. MLS: One Man’s View

In July of 2009, one of my good friends from Philly came with me to Foxboro for a Gold Cup/MLS tripleheader.  I relayed his thoughts about that Saturday afternoon here.  His experience drew a fair amount of comments.  With the Gold Cup now drawing crowds to stadiums around the country, we thought it worth revisiting what he thought then and thinking about what is happening now.

I made the trip up to Foxboro this weekend for the Gold Cup Tripleheader.  It was a night of perfect weather, a great US/Hati match and a stinker of an MLS game.  I made the trip with a buddy with whom I played soccer in college.  While I have immersed myself in MLS and US soccer over the past decade, he had been neither to an MLS game nor a US game.  He drove up from the City of Brotherly Love and is a big Philadelphia sports fan.  He has expressed some lukewarm interest in the Union, but wanted to “see the product” before he buys.

His experience was unfortunately instructive.  The US game was scintillating.  Fans of both teams were into the game, the soccer was back and forth and there was tension throughout.  The Revs/Wizards game was a different animal.  The soccer was of poor quality, the crowd quiet and the match lacked drama.  On the way back (sorry Grenada, we didn’t catch the third game), my buddy expressed how entertaining the US match was, while noting that he almost fell asleep during the Revs game.

In defense of MLS, both teams were missing many of their best players both to injury and the Gold Cup, and every league, all over the world, puts up stinkers. Yet a common issue on this blog is the big question facing MLS; how does the league bring the multitudes of American soccer fans into the fold?  Displays like Saturday night are not the answer.

The new franchises (TFC, Seattle, RSL) have managed to bridge this divide.  The Revs, Red Bulls, etc… have not.  Behind me at the game was a teenage youth player of an apparently high level.  He was at the game with a relative who knew little about soccer, yet this youth player regaled his relative with the biography and history of all of the US players.  This youth knew nothing about the MLS teams involved, knew none of the players and was dismissive of their skill. “Individually they are ok, but they can’t play in tight spaces.”  Of course the player that commented was directed at was two time Argentinian World Cup veteran Claudio Lopez.  This youth player had no idea that athletes of that caliber were plying their trade in MLS.

The league is making strides; we’ve documented those repeatedly.  Yet it was remarkable how many fans came to the triple header after the Revs game was over because they had zero interest in MLS.  I’m not describing anything new; we’ve certainly posted about this issue many times.  However, I thought the anecdotes were instructive.  My friend? He promised to give the Union a try, but has decided against season tickets.

LiveStrong Park Set to Open

The opening of LiveStrong Park is set for Sunday.  With this exciting event just days away, we thought it appropriate to set the stage for Major League Soccer’s newest SSS.  In September, 2006, On-Goal, LLC purchased the Kansas City Wizards from Hunt Sports Group.  Led by Neal Patterson and Cliff Illig, the purchase brought a local ownership group to MLS and started a new wave of MLS franchise sales that included Houston and DC United.  At the time, Kansas City was playing to small crowds in massive Arrowhead Stadium and was one of three MLS teams in the Hunt stable.  OnGoal brought limited sports expertise to the transaction, but expressed its desire to build a “world class” soccer specific stadium by April, 2009 and a refreshing enthusiasm to the League.

The team didn’t make 2009, but they did make 20011.   Kansas and the local county offered $230 million in incentives to lure Cerner and the team to Kansas. According to this article from the AP, the Cerner-Sporting deal may create 9,000 jobs in Kansas and politicians on both sides of the aisle are eager to make the deal happen. The 18,500 seat, natural grass stadium will feature 36 suites, 300 HD televisions and fully covered seating.   There will also be 6 locker rooms, an 1800 square foot video board and 6 locker rooms.  The stadium web cam (complete with a presenting sponsor), can be found here.   The June 9 home opener will be one of 3 home games for the team in June.  The match against the Fire will be nationally televised on ESPN2.

In what Sports Business Daily termed “one of the most surprising deals of the year, Livestrong was announced as the naming rights sponsor for the new stadium.   The deal will cost Livestrong nothing, and will tie Sporting’s name with the well known cancer charity in return for the gift.  Moreover, for the duration of the agreement, a portion of stadium revenues, including ticket sales, will go to the charity. The deal is estimated at $8 million dollars over 6 years (with the money running from the team to the charity).

American soccer fans will be watching on Thursday when LiveStrong Park opens for business.  This is an exciting time for Sporting and another great moment for MLS.

The Monday After

Full slate of games from a weekend that included both National Teams in action and Major League Soccer games starting in mid-week.  Before we get to attendance, here are a couple of other business stories from the last couple of days.  We’ll start in WPS, where the league has announced a partnership with A3 Sports Consulting.  According to the WPS press release, the Texas based company will “collaborate with WPS to develop new and innovative marketing and ticketing initiatives for the duration of the 2011 season.”

In Philly, the Union have started taking deposits for 2012 season tickets. A place on the list requires a $50 non-refundable deposit.  The waiting list entitles fans to get in line behind current partial season ticket holders in gaining access 2012 season seats.  The team is still offering 9 game packs to 2011 games.

In MLS attendance news, Chivas hosted a mid-week tilt against Vancouver with almost 12k in attendance.  On Friday night, more than 20k were at the Home Depot Center for a Galaxy home game.  On Saturday, more than 20k were in attendance at Red Bull Arena, almost 20k were in Toronto and almost 14k in Chicago.  Dallas saw just over 10k for their defeat of the Revs, 15k in Salt Lake City and just under 13k at Dick’s Sporting Goods Park.  Chivas had more than 14k for their Saturday night game while San Jose had just over 9k for their 2-0 win.

In National Team games, more than 64k were in attendance for Spain’s trouncing of the US Men at Foxboro, a record for Gillette Stadium.  At Red Bull Arena, just under 6k saw the US Women defeat Mexico in a World Cup tune-up match.

Soccer Business Bits: Champions League Ratings, LiveStrong Park & More

As we have discussed over the last two weeks FOX broadcast the Champions League Final for the second straight year.  The Nielsen ratings are out and the network scored a 1.8 overnight.  This represents a significant increase over the final from last year.  The 2010 Final achieved were not nearly as good as expected, with the match scoring a 1.1.  The 2011 Final compares favorably with the 2009 Final on ESPN which was seen by more than 1 million households.  As we said last week, the 2011 match-up brings the teams with the best cache to network television.  Barcelona and Manchester United have enormous followings in the United States and the dramatic rise in ratings shows the power of those two brands.

The opening of LiveStrong Park is just days away and the Sporting PR machine has provided a detailed breakdown of some of the events surrounding the big event.  From the press release, here are some of the events:

All ticket holders may then enter LIVESTRONGSporting Park, beginning at 5:30 p.m. CT when gates open to to the Sprint Plaza for Live at LSP presented by INK, the first of a season-long concert series…

“The pre-game ceremony will also include a special video on each of the stadium’s HD video boards – 2,016 square foot in the south end and 550 square feet in the north end – and a stealth flyover. The National Anthem will be sung by local blues and jazz singer Ida McBeth, and military members from Whiteman Airforce Base will sing God Bless America. Numerous special guests are expected to be in attendance for the match, including Major League Soccer commissioner Don Garber, honorary Sporting Kansas City member Chad Ochocinco and Kansas City, Kansas Mayor Joe Reardon. The club’s first manager, Ron Newman, will be in attendance, and will meet with fans in the Members’ Club prior to the match.”

Finally, the Spain/USA match is a few days away and according to multiple reports, it will bring the biggest crowd ever to see a soccer match in Foxboro

 

 

 

The FIFA Mess: A Look at the Numbers

Soccer fans around the world are well aware of the current ethics crisis haunting FIFA.  The soccer governing body is beset by allegations of bribery, graft and vote selling.  Fans hoping for change from within are severely disappointed with Sepp Blatter posied to continue leading the organization.  Lately, fans and journalists have been calling on FIFA sponsors to take a stand against the organization, but the response had been (at best) lukewarm.  We thought it worth taking a look at some of those sponsors and the money at play in their FIFA relationship.

Tier-One FIFA World Cup sponsors pay almost $125 million for the right to reach 30 billion sets of TV eyeballs and almost 3 million stadium attendees.  Add in the enormous investment necessary to leverage the FIFA relationship (through ad materials, hospitality events, commercials, etc…) and only a serious company can join the elite group of eight World Cup partnerships offered by FIFA.  It was therefore surprising when it was announced that little known Chinese renewable energy company, Yingli Green Energy,  had joined titans such as Budweiser and McDonalds in the upper echelon of sports sponsorship.  The deal entitles Yingli to stadium advertising, the use of the FIFA mark, prime real estate in fan zones and much more.

These sponsors certainly have the financial horsepower and brand recognition to be agents for change, but based on recent statements, they appear to have little incentive to do so.  Brian Strauss of The Sporting News has done an outstanding job covering this issue.  We recommend checking this piece of the reaction of Coke and Visa to the breaking scandal.  This recent piece in the Independent suggests that the sponsors are starting to take action.

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