|Abstract:International Journal of Sport Finance, Volume 16, No.3, August 2021.
|Are Sports Betting Markets Semi-Strong Efficient? Evidence From the COVID-19 Pandemic
Authors: Pascal Flurin Meier, Raphael Flepp, and Egon Franck
|Abstract:This paper examines whether sports betting markets are semi-strong form efficient—i.e., whether new information is rapidly and completely incorporated into betting prices. We use news on ghost games in the top European football leagues due to the COVID-19 pandemic as a clean arrival of new public information. Because spectators are absent during ghost games, the home advantage is reduced, and we test whether this information is fully reflected in betting prices. Our results show that bookmakers and betting exchanges systematically overestimated a home team’s winning probability during the first period of the ghost games, which suggests that betting markets are, at least temporally, not semi-strong form efficient. Examining different leagues, we find that our main results are driven by the German Bundesliga, which was the first league to resume operations. We exploit a betting strategy that yields a positive net payoff over more than one month.
|Soccer Clubs and Diminishing Returns: The Case of Paris Saint-Germain
Authors: Vincent Hogan and Patrick Massey
|Abstract:Paris Saint-Germain (PSG), one of France’s top soccer clubs, was bought by Qatar Sports Investments (QSI) in 2011. Since then, the club’s expenditure has risen precipitously, as have its victories. In this paper, we ask whether this represents value for money. We find that the efficiency of PSG did not deteriorate following the takeover. However, while PSG operated close to the production frontier in terms of converting resources to points, it scored vastly more points than was necessary to win the league. We estimate that PSG spent €140m more than was necessary to win the French league in 2016/2017. Since 2011, PSG is estimated to have overspent by up to €600m. This expenditure could be thought of as being merely the price of creditable performance at a European level, but we show that it has brought less success than would be expected.
|Impacts of International Sports Events on the Stock Market: Evidence from the Announcement of the 18th Asian Games and 30th Southeast Asian Games
Authors: Dwipraptono Agus Harjito, Md. Mahmudul Alam, and Rani Ayu Kusuma Dewi
|Abstract:This paper assesses the influence of hosting major international sporting competitions on the host countries’ stock market performance before and after the announcement of such events. Specifically, this study explores whether stock markets of hosting countries experience cumulative average abnormal return (CAAR) during the aforementioned period. For the purposes of investigation, the study considers announcements of the 18th Asian Games and 30th Southeast Asian Games hosted by Indonesia and the Philippines, respectively. The LQ45 index of the Indonesia Stock Exchange (IDX) and PSEi index of the Philippines Stock Exchange (PSE) were chosen to test the significance of these events. It is found that only PSE experienced a significantly positive CAAR for the event. Findings of this study can make a significant contribution to helping national governments and investors understand the significance of sports to the economies of developing countries and how major sports events can improve stock market efficiency.
|Baseball Home Field Advantage Without Fans in the Stands
Authors: Jeremy M. Losak and Joseph Sabel
|Abstract:Home field advantage is universally accepted across most major sports and levels of competition. However, exact causes of home field advantage have been difficult to disentangle. The COVID-19 pandemic offers a unique, natural experiment to isolate elements related to home field advantage since all 2020 regular season Major League Baseball games were played without fans. Results provide no statistically significant evidence of a difference in home field advantage between the 2019 and 2020 seasons, evidence that home crowd support is not a driver of home field advantage.There does appear to be a statistical advantage by the home team batting second in the inning. Travel fatigue seems to have no impact on home field advantage, and while home field advantage seems to increase throughout the 2020 season, we chalk that up to small sample noise. Despite lacking historical precedence, betting markets seemingly respond efficiently to the new home conditions.