Category: Sports
Hunting Endangered Species
Can hunting save an endangered species? Yes. In Africa hunting has been critical to the conservation of a number of species, despite the sometimes opposition of the United States which can prohibit US citizens from hunting even in foreign countries.
I was surprised to discover, however, that “some exotic animal species that are endangered in Africa are thriving on ranches in Texas, where a limited number are hunted for a high price.” Texas hunters have saved several endangered African species, unfortunately for the animals, the story does not end happily. Video from 60 Minutes below–some excellent material on incentives, ethics and conservation for classroom discussion.
Explaining the economics of the Bowl system
Over at www.grantland.com, here is my piece with Kevin Grier, on the question of bowls vs. playoffs. Here is an excerpt:
In 2007, Mark Schlabach chronicled the Chick-fil-a Bowl’s selection process. He explained that Boston College was not invited to the game in Atlanta because organizers worried that BC’s fan base wouldn’t buy enough tickets and spend enough money.
“The BC thing ate me up for a week,” Stokan (the Bowl President) said. “The factors on the field were very favorable to Boston College. But when you look at this thing, you have to take into account the players, the administrators, the relationships with the leagues and the financial commitments. The city really depends on us because we’re one of the top 10 conventions. We have an obligation to hotels, restaurants and retailers.”
Are you surprised that this bowl is run by the local Chamber of Commerce?
…Did you know that there is a “Sugar Bowl CEO”? Circa 2009, he was paid more than $600,000 a year. Is it surprising that the Sugar Bowl and Fiesta Bowl each have more than $30 million in net assets? Did you know that many of these bowls also receive government subsidies?
The piece ends thus:
In sum, we have a system where the games are not designed to produce the best on-field matchups, the competitors often lose money but fight fiercely to participate, outsiders and observers complain vehemently, and the organizers amass and waste a great deal of money with little oversight.
Welcome to capitalism, American style. Get back to us when you’ve found a better system.
Here is Art Carden on the same topic.
Richard Thaler prefers a playoff system to BCS
Even if you think the tradition of the bowl games is worth preserving, going to an eight-team playoff would help such bowls. Here is how it might work. In an eight-team playoff there are seven games. Give each of the existing bowl games one of the first-round games, played the first weekend in December. These games would attract more attention than any of the nonchampionship BCS games now because they determine who keeps playing. Then rotate the semifinal and final games among various locations, much as is done with the Super Bowl and the NCAA basketball tournament. For traditionalists, restore the championship game to New Year’s Day, thereby shortening the season by a week even for the teams that play in the championship.
This system would not only be attractive to college-football fans, it would also help curtail high-stakes conference-jumping by colleges that want a share of that BCS money. This turmoil is leaving some conferences desperately short of teams. Rumor has it that the Big East has offered a spot to the Sorbonne.
Here is more.
Assorted links
1. Private equity and jobs, setting the record straight.
3. Further notes on the new European agreement, if indeed that is what it is, and good comments here, and good tweet in Spanish.
4. The Economist picks best books of the year 2011, including TGS.
5. A professional NHL hockey player speaks to the issue of hockey helmets and collective action problems. Good, thoughtful piece, deeper than a lot of economic treatments of the same issue.
6. “our jet packs are here…”
The economics of Moneyball
At www.grantland.com, I have a new piece up with Kevin Grier, excerpt:
Here’s something funny about the Moneyball strategy: It is bringing us a world where payroll matters more and more. Spotting undervalued players boosts their salaries and makes money more important for the general manager; little did Billy Beane know that in the long run he would be strengthening the hand of the large home-market teams, such as the Yankees. From 1986 to 1993, payroll explained 2.2 percent of the variation in team winning percentage, and that meant spending more money yielded little return in terms of quality on the field. In the 2004 to 2006 seasons, after the Moneyball revolution was under way, payroll explained 27.1 percent of the variation in team winning percentage, which means a stronger reason to spend more.
One of our sources you will find here, a very good paper by Jahn Hakes and Skip Sauer.
The Coase theorem is back in the saddle
On nearly every count, the deal favors the owners, who had sought all along to overhaul the system. The players made significant concessions, including a reduction of up to $300 million year in salaries, $3 billion over the life of the agreement.
It seems there will be an NBA season. The details of the deal have not yet been released, and on minor issues are still being negotiated, but the exact revenue split will depend on revenue projections. Henry Abbott discusses winners and losers.
How best to improvise a new professional basketball season
Since a regular NBA season is looking unlikely, what are the remaining options? I don’t see why the lead players should be so keen to start up in Europe. What if Comcast (or cash-rich Google?) said to a bunch of top stars something like the following?:
We’ll take care of renting the arenas, you all just show up and play. We’ll create four teams, heavy with stars and key role players, and let them barnstorm in a multi-round tournament, twenty-four games total, with elimination games toward the end. Past stars, like Magic Johnson and Charles Barkley (no MJ!), will be the coaches and maybe sometimes the referees as well. We’re going to pay you all with equity, with the final return depending on how much the TV ads sell for. There also will be bonuses for the winners, so you don’t all mess around like in the All-Star game.
If more than four teams can be managed and coordinated, so much the better. At the end of a tournament the world champion is announced, and come September or October you can pit that team against the Dallas Mavericks.
One of the four teams can be non-American-born players only, to get the rest of the world involved.
Couldn’t this be…um…more fun, or as much fun, as the so-called regular season?
What else could we do?
Sign of the times
A major credit agency warns that Penn State University’s bond rating could be downgraded because of risks to its reputation and finances from a child sex abuse scandal.
Moody’s Investors Service said Friday it has put the university’s Aa1 bond rating under review for a possible downgrade after ex-coach Jerry Sandusky was charged with molesting eight children over a 15-year period.
Moody’s will assess the potential impact on Penn State of risks from possible lawsuits, a decline in students applying to attend the school, loss of donations from philanthropies and changes in its relationship with the state.
Here is the link, hat tip to Michael Rosenwald.
On Twitter
Follow Italian 10, yikes! Further updates here, and here come the margin calls.
Why is NBA player-owner bargaining asymmetric?
Following up on the recent NBA lock-out post, some of you have asked why losses should be asymmetric across the two sides in the bargain. Co-author Angus writes to me:
Re your commenters howling that the situation regarding losses is symmetric. It is NOT symmetric. (this is the part we didn’t do because of the basketweavers.)
First, the owners are losing net revenues, the players their gross revenues. Do we really think profits are >= labor costs?
Second and most important, owners are sacrificing SR net revenues for LR increases in franchise values from cost control. Players have no LR gains to motivate SR pain.
Owners have a LR view, players SR, so it makes much less sense for players to take a SR hit without a big offsetting gain.
In the comments, “fan” adds:
The reason the owners can hold out longer than the players is that the revenue/profits for the two sides are asymmetrical. Owners’ revenues are back-end weighted toward the second half of the season and playoffs, while the salaries are paid on a per (regular season) basis. So if the season is 40 games, player salaries are halved, but owners’ revenue drops by, say, 30%.
A commenter named Alex (not the MR Alex) writes:
While I think other commenters above are correct in the making the point that the two sides are asymmetrical, I don’t think that anyone has correctly explained the most important reason they are asymmetrical. The most important reason is the sides’ relative COSTS. It is correct that both sides are losing revenue. But while the players are avoiding a few of their costs, the owners are avoiding much more of their costs.
The bottom line: It’s not symmetric, even the basketweavers should see that.
Efficient Markets in Everything
Sabermetrics worked but “once the casino catches on to your card-counting tricks, you can’t prosper at the table for long.”
NYTimes: The A’s, meanwhile, have tumbled back to mediocrity: the team is on its way to a losing season this year, after compiling a record of 231 wins and 254 losses over the previous three seasons. Most of the innovations introduced or popularized by Beane have been freely adopted by other organizations, thus eliminating whatever stealth advantages he once enjoyed.
… He told me baseball is moving “back to an efficient market — albeit one with some random events that don’t offer perfect efficiency — where whatever you spend, that’s where you’re going to finish.” In short, the Yankees spend a lot and make the playoffs pretty much every year. The Pirates don’t, and they don’t. There are aberrations to this pattern, but the pattern itself is unmistakable.
But the more efficient baseball becomes as a market, I asked him, the worse it is for you, right?
“Oh, yeah!” he said, and laughed.
Should the NBA move to a much shorter season?
In light of the lockout, K., a loyal MR reader, poses me this question. Football, after all, gets by with a relatively small number of games, namely sixteen. Every game is an event and a ritual. So how about a 44-game season for basketball?
Fortunately for me, I don’t think this will work economically. Why not?
1. Basketball is much more star-driven than football, which I take to be team-driven (“the Dallas Cowboys,” etc.). In basketball, the goal is maximum exposure of the few top stars to as many markets as possible: “Daddy, I want to go see Kobe Bryant.” There are only five starters and you can see Kobe’s face and scowl the whole time.
2. Basketball depends partly on particular individual superlative performances, such as massive scoring nights by the top stars and signature dunks. This requires a lot of games to be run.
3. Correctly or not, a single football game is taken as a decisive test of team quality. While I would not argue that the best team always wins the Super Bowl, the game does seem to settle something in people’s minds. A single basketball game too often is very close, depends on foul calls and refereeing, and depends on what appears to be luck, such as whether or not a final shot rims in and out of the basket. In basketball, it is harder to get the single game to be so meaningful. In football, a lot of games aren’t very close at all.
4. With the “game as ritual” strategy denied, basketball resorts more to a saturation strategy, if only to remind viewers and fans that it exists.
5. The inputs which get worked hard, namely the players and the arenas, don’t always have high opportunity costs. Basketball involves less physical wear and tear than does football, which could not consider an 82-game regular season.
The funny thing is, I don’t even watch the NBA regular season, I simply like knowing that it exists and that I can read about it on ESPN and the like. That longer process, to me, makes the playoffs seem more real.
Is basketball scoring a random walk?
Not when there’s a strike on! Otherwise, maybe so, as Gabel and Redner report (pdf):
We present evidence, based on play-by-play data from all 6087 games from the 2006/07–2009/10 seasons of the National Basketball Association (NBA), that basketball scoring is well described by a weakly-biased continuous-time random walk. The time between successive scoring events follows an exponential distribution, with little memory between different scoring intervals. Using this random-walk picture that is augmented by features idiosyncratic to basketball, we account for a wide variety of statistical properties of scoring, such as the distribution of the score difference between opponents and the fraction of game time that one team is in the lead. By further including the heterogeneity of team strengths, we build a computational model that accounts for essentially all statistical features of game scoring data and season win/loss records of each team.
For the pointer I thank Michelle Dawson.
Bond markets in everything
But there is a backdoor onto Centre Court. About 2,500 seats are reserved for investors in the club’s so-called debentures, or bonds.
The club has issued these since the 1920s to finance development. But instead of paying cash coupons, like regular bonds, Wimbledon debentures pay interest in something much more valuable: tickets.
Holders get one ticket for each day of the Wimbledon tournaments during the five-year life of the bond. And here is the kicker: If you don’t feel like going on any given day, you can sell it—legally.
Such mini-bonds are a new trend in the UK, in part because the banking system is skittish about allocating credit to many small firms.
Claims about Manute Bol
As a child, he may have killed a lion; he quite possibly coined the phrase “my bad”; he certainly warned Congress about Osama bin Laden in 1993.
That is from a review of Jordan Conn’s The Defender, a new Kindle Single biography of Manute Bol. I bought my copy right away. There is an explanatory photo here.
