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Long football, short baseball

Posted By Mukul PAL On June 14, 2010 @ 11:23 PM In Sports | 3 Comments

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Just like everything else even big ticket sports outperform and underperform each other cyclicality, owing to time cycles.

Economics is at the soul of everything including big ticket sports. Now that football is the number 1 sport in the world, the growth might look obvious. But it has taken more than a few decades for football to attain this cult. Was it chance that we reached here to a 1 billion audience, was it smart visionaries that made it happen or was it social behavior?

Robert Prechter’s Socionomics challenges the standard presumption that social mood is buffeted by economic, political, cultural trends and events. News of such events affects the social mood, which in turn affects people’s penchant for investing, spending and the sports that they enjoy. What Socionomics proposed was that social mood was patterned and was a natural product of human interaction. It’s the social moods trend that determines the character of every social action including the sports that we watch and make popular. Measuring popularity of sport may be tricky. What could be the measure of success for any sport? Is it attendance, ratings, salaries of players, records? It’s all of them and more.

A recent study conducted by MLBAmerica.com showed that baseball did not rank number one on the list of favorite sports for 13 to 17 year olds. It didn’t rank second, third or fourth. It was ranked fifth. behind basketball, football, soccer, and hockey. Baseball is slowly but surely falling behind in the ranks of other sports. Sixty-eight percent of youth said that the main reason they don’t like baseball was because it was boring. This is not what the future is made off. The attendance growth relatively or absolutely is bound to drop. Now one may say, in retrospect it all looks fine. You should read Prechter’s pioneering studies in Socionomics and you will read repeated forecasts of selling baseball clubs, taking profits on baseball cards, signing long term contracts for players and crash of salaries and celebrity values. Prechter saw it coming and he was right on target.

Baseball was on one side and on the other we now have Pele, Zidane and Maradona featured in the Louis Vuitton ad with “three exceptional journeys. One historic game”. One can really see the value shifting from baseball to football. Socionomics explains how sports can provide a background for extreme emotions. Despite how it sounds, football was classified as a bear market sport and baseball a sport for bull markets. In the bull market good guys are the good guys while in bear markets bad guys are the good guys. This may all look so subjective, but violence in sports can be measured. Boxing is more violent than say a match of basketball, it’s clear.

Sports can also be judged for the level of contact. How many red cards did you see in the first few matches? All of them according to me were reasonable. Red cards and yellow cards is a violence check. Baseballs’ positive correlation to Dow and footballs’ negative correlation are easy to prove, when you see Dow 10,000 for more than a decade, all when football was thriving. The characterization seems reasonable.

More than the characterization, it’s the cyclicality of the whole thing which seems hard to counter. FIFA is trying to come out clear after a history of corruption. This was a similar story with baseball as it was reinventing itself in its hay days. Now the records are more in football than baseball. Consistent new records are an expression of exponentiality. Socionomics refers to this exponentiality as the wave theory. We plotted the rankings for the top winners Germany, Italy, Brazil, England, Argentina and Spain over the history of world cups. Exponential growth in points in favor and against was a standard norm.

Exponentiality just like everywhere else in nature also drives cyclicality in sports. A growth in performance of one team is at the expense of less relative growth or decay of the other. What can be seen on the big picture as a growth in football came at the expense of baseball. And this can be understood at the level of performance of Germany vs. Brazil or Italy vs. France. Unfortunately sports data is not as comprehensive as stock market data. This makes ranking processes and workings to prove performance cyclicality shallow.

We don’t want to make it all work and no play. So on a lighter note, here goes the sports bet. Brazil, Germany, Italy have been in the top 3 positions, 9, 10 and 7 times respectively since 1930s. This makes them the top rankers. Performance cycles suggest that top rankers disappoint and worst rankers surprise as performance reverses. The question of value for money does not come from picking a previous winner but one who has more odds against it. This why Argentina with a 4 time rank in top 3 and England with just 1 win since 1930′s makes them good potential best value pick. Social behavior like everything is mathematical, but then mathematics cannot give as much pleasure as a world cup final. It’s sometime good to just enjoy.

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Inputs from Ben and Euan from Socionomics [2]

Mukul, we’re going to tentatively label Soccer, or Futbol, a bull market sport unless evidence shows otherwise. Read below to see our analysis. If you come across any evidence supporting the case that it is a bear market sport, please let us know.

We first toyed with the idea that attendance figures of the World Cup might give us a clue as to determine if Soccer is a bull or bear market sport. The only correlation we found is that attendance size is relative to the host country. For example, attendance in England (1966) is much higher than Chile (1962).

Next, we followed the history of soccer, from its primitive conception to the present and found that the game was allowed by authorities and official rules were adopted during bull markets. On the flip-side, England banned the sport during the bear market of 1314. But to make things more confusing, Queen Elizabeth I banned the sport in 1517, but it was not rigorously enforced.

Soccer Stars: Pele is heralded as the best soccer player on the planet and his career was during the bull market from  1957-1971.

Conclusion: Soccer is a bull market sport but no more than basketball, baseball or golf. There is physical contact in soccer but not to the same degree as compared to American football, Hockey or Rugby.

Considerations for further study: Attendance figures of English soccer leagues adjusted by population.

Sources: World Cup: http://www.fifa.com/worldcup/archive/index.html [3]
Timeline: http://www.my-youth-soccer-guide.com/soccer-history-timeline.html [4]
Pele: http://en.wikipedia.org/wiki/Pel%C3%A9 [5]

Thanks,
Ben and Euan

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URLs in this post:

[1] Image: http://timetriads.com/wp-content/tt_files/2010/06/zidane-pele-maradona-louis-vuitton.jpg

[2] Socionomics: http://www.socionomics.net

[3] http://www.fifa.com/worldcup/archive/index.html: http://www.fifa.com/worldcup/archive/index.html

[4] http://www.my-youth-soccer-guide.com/soccer-history-timeline.html: http://www.my-youth-soccer-guide.com/soccer-history-timeline.html

[5] http://en.wikipedia.org/wiki/Pel%C3%A9 : http://en.wikipedia.org/wiki/Pel%C3%A9

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[7] Orpheus Research at Reuters - United Kingdom: https://commerce.uk.reuters.com/purchase/advancedSearch.do?providerList=38902

[8] Orpheus Research at Reuters - United States: https://commerce.us.reuters.com/purchase/advancedSearch.do?providerList=38902

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