Obstacles to level playing field

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Art Modell, former owner of the Baltimore Ravens, once described America’s National Football League, whose new season kicked off this week, as sporting socialism. The league holds almost all revenues in common: crowd money is shared 60:40 with the visiting team, broadcast and merchandising income is divided equally.

The purpose of socialism is equality and in sport this is deemed desirable – not on moral grounds but because it makes for a more attractive contest. Writers and academics, including myself, have held up the NFL as a shining example of a balanced contest, so it comes as a shock to examine the pre-season betting odds on the winner of this year’s Super Bowl.

Bookmakers’ odds are important since they must reflect the balance of opinion of the gamblers who, as fans, decide on whether the contest is attractive enough to command their interest. If the league were perfectly balanced, we should expect each of the NFL’s 32 teams to be offered at odds of 31/1, implying a 3 per cent probability of winning.

But in fact three teams, the Indianapolis Colts (11/2), the New England Patriots (13/2) and the Philadelphia Eagles (7/1), dominate the odds. The implied probability that one of these teams wins the Super Bowl is 37 per cent. The top 10 teams account for two-thirds of the probability. Five teams are such no-hopers as to be given less than a 1 per cent chance of winning and the bottom two, the Cleveland Browns and the San Francisco 49ers, are 200/1 longshots.

More striking still is the fact that this year’s Uefa Champions League, European soccer’s premier club competition, looks no more unbalanced in the eyes of the bookmakers than the NFL.

The competition, which also began this week, has long been considered an unequal contest. Even Lennart Johansen, president of Uefa, European soccer’s governing body, was driven last year to lament that “Uefa created this fantastic competition in 1992, but that it has now become a monster that has produced this unequal struggle between haves and have-nots in countries across Europe”.

But in fact the top three teams (also out of 32) have almost identical odds to the top three teams in the NFL, and while teams such as FC Thun from Switzerland and Artmedia Bratislava of Slovakia are rank outsiders at 500/1, this is scarcely much worse than the Browns and the 49ers. One could even argue from these odds that it is the Champions League that is more balanced. Beyond the top three teams, the odds tail off quite dramatically in the NFL, but in the Champions League there are a further five teams whose odds suggest they are contenders.

It is tempting to conclude that socialism is not working, even if financial resources are evenly distributed in the NFL. According to Forbes magazine, the ratio of the largest income (Washington Redskins) to smallest (Arizona Cardinals) was less than 2:1. By contrast, FC Thun’s annual budget is less than $5m, compared with $310m reported by Manchester United last year. In soccer, teams use money to buy success and this accounts for most of the inequality in Europe. In the NFL, inequality on the field survives despite financial equality.

There are two likely explanations. First, the Champions League is inherently more random because the teams play fewer games (13 to win the Champions League against 19 or 20 to win the Super Bowl).

Second, the “technology” of soccer is more conducive to unexpected events – even very weak teams can sometimes win by scoring a lucky goal and then putting 11 men behind the ball. This explains how Roman Abramovich, the Russian billionaire owner of Chelsea, is estimated to have spent more than £200m ($360m) assembling a squad so large that the reserve team could match anyone in Europe, and yet the team’s probability of winning the Champions League is rated no better than 17 per cent.

In gridiron, there is less luck because small differences in skill, particularly in key positions such as the quarterback, lead to huge differences in scoring. Also, given the reliance on physical power, it would not be safe for weak teams to take the field if resources were as unequally distributed as in soccer.

But even if the NFL’s political philosophy does not bring about much more balance within a season, the effect between the seasons is highly visible. Financial resources combined with the draft system, which allocates the best new playing talent coming into the league each season to last year’s losers, quickly turns weak teams into strong teams, and vice versa.

Indianapolis managed only three wins in 16 games as recently as 1998, while the Patriots were no-hopers in the early 1990s. By contrast, the 49ers were a dominant team of the 80s and 90s, winning five Super Bowls.

The names in the European soccer top 10, such as Real Madrid, AC Milan and Bayern Munich, stay at the top year after year, while Artmedia and FC Thun have never made an impact on European football and probably never will.

Uefa has expressed concern about the financial dominance of Abramovich and his Chelsea team, but perhaps its officials should be more sanguine. Not only has his spending failed to upset this season’s competitive balance that much, but he has also managed to bring a new name to the top table of European football, something that does not happen very often.

Stefan Szymanski is professor of economics at Tanaka Business School, Imperial College London and the author of ‘National Pastime: How Americans Play Baseball and the Rest of the World Plays Soccer’

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