IJSF 16:4

Abstract:International Journal of Sport Finance, Volume 16, No.4, November 2021.

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The Effects of (Un)Expected Match Outcomes on Stock Return: A Case Study of Borussia Dortmund
Authors: Bernd Frick and Dirk Semmelroth
Abstract:We analyze the nature of stock price reactions of Borussia Dortmund, the only publicly traded soccer club in Germany, following domestic league and international matches over an extended period of time. Our results suggest that abnormal returns vary with the match result, the match venue, the competition type, bookmakers’ expectations, and the importance of the Bundesliga match. Although our results confirm the evidence presented in previous studies, they are surprising insofar as the legal form of Borussia Dortmund GmbH & Co. KGaA—a mixture of a stock company (AG) and a limited partnership (KG)—is quite different from that of traditional stock companies. From a theoretical perspective, diluted property rights and a lack of managerial monitoring are the main characteristics of this legal form. However, the club managers’ career concerns and the competitive pressures of the football industry seem to compensate for these deficits in the organizational architecture.

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Sports Betting and The Black-Litterman Model: A New Portfolio-Management Perspective
Authors: Isabel Abinzano, Maria Jesus Campion, Luis Muga, and Armajac Raventos-PujolIf
Abstract:This paper transfers and adapts the Black-Litterman portfolio management model and its subsequent generalizations to the characteristics and specificities of assets quoted on sports betting markets. The results show that these assets are suitable for the application of portfolio management models with the possible inclusion of investors’ opinions. Information based on the variability of market prices and the attention received by NBA teams in Google Trends is successfully used to simulate the opinions expressed by a hypothetical portfolio manager. Furthermore, the assets are suitable for inclusion in portfolios in which managers are seeking returns uncorrelated with other assets.

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Domestic League Competitive Balance and UEFA Performance
Authors: Craig A. Depken and Tomislav Globan
Abstract:This paper investigates the relationship between European football league competitive balance and the performance of that league’s participants in UEFA competitions. The evidence suggests that competitive balance measured using performance points fits the performance coefficients of countries participating in the Champions League and Europa League and that a reciprocal model fits the data best. The evidence suggests that marginal improvements in competitive balance can lead to increase of one-third a win for a league’s participants in the Champions League. The increased rewards for UEFA success suggest policies that promote competitive balance have both public and private benefits for clubs.

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Player Pricing Mechanisms and the Daily Fantasy Sport Chance Versus Skill Debate
Authors: Jeremy M. Losak
Abstract:Differentiating and defining games of skill versus chance have major legal implications when classifying gambling, especially in relation to daily fantasy sports in the United States. This paper provides a theoretical discussion and introduces an empirical approach to analyzing game player pricing mechanisms. If game pricing mechanisms are fully efficient—player prices fully reflect the expected contributions from players—then that game is one of chance since there is no opportunity for skill to play a role in outcomes. This paper examines player prices from DraftKings’ daily fantasy football product. Empirical results show that there are strategies deriving from the pricing mechanism that can be incorporated by skilled participants to increase their expected performance and improve their chances of winning. This provides evidence that daily fantasy sports are skill-based—a necessary condition for skill to be a predominant factor in game outcomes as part of the legal debate.

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