Conflicts of Interest at the USTA

The NY Times has an eye-opening investigation into financial conflicts of interest among the board of the US Tennis Association:

Experts on nonprofit groups said that the cozy connections at the U.S.T.A. raised concerns about conflicts of interest on the board, particularly because the organization had not clearly publicly disclosed any of the relationships.

“You begin to ask questions,” said Frances Hill, a professor at the University of Miami School of Law who has studied tax-exempt organizations. “Aren’t there any people out there who understand tennis who don’t need to have a deal and can just serve on this board and maybe get some tickets?”

The U.S.T.A. spends roughly $200 million a year on salaries, grants to tennis organizations, operating costs and outside contracts. But The Times was able to determine that at least $3.1 million of that annually goes to organizations with ties to board members.

The article also has a nice graphic showing the tangled web of relationships.

It is almost like the USTA has emerged from a time machine and is unaware of decades of corporate governance reform that has identified financial conflicts of interest as problematic.

Sports Writing Update

Most of my sports-related writing these days is taking place over at Sporting Intelligence. I just had a piece up on FIFA and the Russian sanctions.

Over the weekend, British deputy prime minister Nick Clegg told the Sunday Times that Russia should be stripped of the 2018 World Cup. Clegg joins several senior German politicians in calling for the next World Cup to be moved as a sanction against Russia for its role in the continuing conflict in the Ukraine. The renewed calls for sanctions have been prompted by the shooting down of Malaysian Airlines 17 over eastern Ukraine, allegedly by Russian-supported Ukrainian separatists.

Does FIFA have a responsibility to engage in global geopolitics? Its history and actions say yes.

I also recently had a piece in the FT on FIFA governance after the World Cup (also here in PDF):

With the final whistle of Sunday’s match between Germany and Argentina, the world’s attention will move away from football for another four years. With it will go the bright spotlight on Fifa, the global body that oversees world football including the World Cup.

Fifa has long been plagued by scandal. In the coming days, it is expected to announce the results of an investigation into bribery allegations surrounding its decision to hold the tournament in Qatar in 2022. History would tell us not to expect much. 

I do expect to be posting more regularly here at The Least Thing when fall starts, as well as continuing regular commentary and analysis at Sporting Intelligence.

Happy Summer!

World Cup Prediction Evaluation Competition

16 June UPDATE: This prediction evaluation exercise is now being updated at Sportingintelligence. See it there!

15 June UPDATED: I have updated the Infostrada predictions with a more recent version, thanks to Simon Gleave (@SimonGleave).

The World Cup starts tomorrow. Prognosticators have been hard at work generating their predictions of who will advance and who will win. But which prediction is the best? Is it the one who picks the winner? Or is it the one which best anticipates the knock-out round seedings? How can we tell?

In an ongoing exercise here at The Least Thing I am going to evaluate 10 different World Cup predictions. To do this I am going to quantify the "skill" of each forecast. It is important to understand that forecast evaluation can be done, literally, in an infinite number of ways. Methodological choices must be made and different approaches may lead to different results. Below I'll spell out the choices that I've made and provide links to all the data.

A first thing to understand is that skill is a technical term which refers to how much a forecast improves upon what is called a "naive baseline," another technical term. (I went into more detail on this at FiveThirtyEight earlier this spring.)  A naive baseline is essentially a simple prediction. For example, in forecast evaluation meteorologists use climatology as a naive baseline and mutual fund managers use the S&P 500 Index. The choice of which naive baseline to use can be the subject of debate, not least because it can set a low or a high bar for showing skill.

The naive baseline I have chosen to use in this excercise is the transfer market value of the 23-man World Cup teams from Transfermarkt.com.  In an ideal world I would use the current club team salaries of each player in the tournament, but these just aren't publicly available. So I'm using the next best thing.

So for example, Lionel Messi, who plays his club team soccer at Barcelona and his national soccer for Argentina, is the world’s most valuable player. His rights have never been sold, as he has been with Barcelona since he was a child, yet he’s estimated to have a transfer market value of more than $200 million. By contrast all 23 men on the USA World Cup squad have a combined estimated value of $100 million. (I have all these data by player and team if you have any questions about them -- they are pretty interesting on their own.)

Here then are the estimated transfer values of each World Cup team:

	Team		Transfer value
1	Spain		$      1,044,960,000
2	Germany		$         944,160,000
3	Brazil		$         803,040,000
4	France		$         691,740,000
5	Argentina		$         657,720,000
6	Belgium		$         584,640,000
7	England		$         561,120,000
8	Italy		$         542,640,000
9	Portugal		$         517,860,000
10	Uruguay		$         364,476,000
11	Netherlands		$         348,600,000
12	Croatia		$         324,660,000
13	Colombia		$         318,931,200
14	Russia		$         308,784,000
15	Switzerland		$         299,040,000
16	Chile		$         234,864,000
17	Cote D'Ivoire		$         202,389,600
18	Cameroon		$         198,072,000
19	Bosnia and Herzegovina		$         192,780,000
20	Ghana		$         183,708,000
21	Japan		$         164,640,000
22	Mexico		$         152,964,000
23	Nigeria		$         145,908,000
24	Greece		$         134,232,000
25	Ecuador		$         105,588,000
26	United States of America		$           97,104,000
27	Algeria		$           96,096,000
28	Korea Republic		$           88,074,000
29	Costa Rica		$           49,980,000
30	Iran		$           41,076,000
31	Australia		$           36,204,000
32	Honduras		$           35,952,000

In using these numbers, my naive assumption is that the higher valued team will beat a lower valued team. As a method of forecasting that leaves a lot to be desired, obviously, as fans of Moneyball will no doubt understand. There is some evidence to suggest that across sports leagues, soccer has the greatest chance for an underdog to win a match. So in principle, a forecaster using more sophisticated method should be able to beat this naive baseline.

Here is what the naive baseline (based on rosters as of June 5) predicts for the Group Stages of the tournament: The final 4 will see Brazil vs. Germany and Spain vs. Argentina. Spain wins the tournament, beating most everyone’s favorite Brazil. The USA does not get out of the group stage, but England does. All 8 of the top valued teams make it into the final 8.

While this naive baseline is just logic and assumptions, work done by “Soccernomics” authors Stefan Szymanski and Simon Kuper indicates that a football team’s payroll tends to predict where it winds up every year in the league table. Payrolls aren't the same thing as transfer fees, of course, but they are related. Unfortunately, as mentioned above individual player salaries are not available for most soccer leagues around the world (MLS is a notable exception).

I will be evaluating 10 predictions over the course of the World Cup. There are (with links to the data sources that I have used, as of 10 June unless noted otherwise):

• Goldman Sachs
• FIFA World Rankings
• Elo Rankings
• Infostrada
• Hassan and Jimenez
• Danske Bank
• Bloomberg
• Andrew Yuan via The Economist
• Betfair.com Odds (on June 5, 2014 courtesy of Roddy Campbell)
• FiveThirtyEight

The predictions are not all expressed apples to apples. So to place them on a comparable basis I have made the following choices:

• A team with a higher probability of advancing from the group is assumed to beat a team with lower probability.
• If no group stage advancement probability is given I use the probability of winning the overall tournament in the same manner.
• This means that I have converted probabilities into deterministic forecasts. (There are of course far more sophisticated approaches to probabilistic forecast evaluation.) 
• No draws are predicted, as no teams in the group stages have identical probabilities.
• The units here, in the group stage at least, will simply be games predicted correctly. No weightings. 

Other choices could of course be made. These are designed to balance simplicity and transparency with a level playing field for the evaluation. Just as is the case with respect to the value of having a diversity of predictions, having a diversity of approaches to forecast evaluation would be instructive. No claim is made here that this is the only or best approach (laying the groundwork here for identifying eventual winners and losers).

With all that as background, below then are the predictions in one table (click on it for a bigger view). The yellow cells indicate the teams that the naive baseline sees advancing to the knockout stages, and the green shows the same for each of the 10 predictions. The numbers show the team rankings according to each prediction.

I will be tracking the performance of the 10 predictions against the naive baseline as the tournament unfolds, scoring them in a league table. I'll also discuss the methods and results as well as the sensitivity of the latter to the former. When the Group Stages wind up I'll reset for a second part of the prediction evaluation.

Finally, for now, I welcome any comments on this exercise. If there are other predictions that you'd like to track in the same manner alongside these, please enter them in the comments.

Let the game within the games begin! 

FIFA has Bigger Problems than Corruption Alone

With a big investigation on FIFA being reported by The Sunday Times today (£) I thought I'd repost the commentary below, which appeared earlier this month as a guest post at Soccernomics (Thanks Simon Kuper).

FIFA has Bigger Problems than Corruption Alone

For much of the past four years FIFA, the organization which oversees global football and the World Cup, has been dogged by allegations of corruption and poor management.  In 2011, after two members of the FIFA Executive Committee had tried to sell their votes for future World Cup location to undercover reporters[R1], FIFA felt compelled to respond by setting up an internal reform committee to recommend steps to improve the organization’s governance.

That committee, chaired by Professor Mark Pieth of the Basel Institute of Governance, ended its work last year, and issued a hard-hitting, final report last month.

Like many other international sports governance bodies, the Fédération Internationale de Football Association or International Federation of Association Football, is headquartered in Switzerland. Many international organizations have long found the nation to be a favorable location due to its political neutrality, generous tax treatment and hands-off approach to oversight.

For FIFA, the hands-off oversight has arguably allowed mischief to take root. Among the many scandals that have plagued FIFA, the one getting the most attention today is alleged vote-buying and collusion associated with the awarding of the 2018 World Cup to Russia and 2022 World Cup to Qatar. The decision on who gets to host the World Cup is a consequential one. For instance, Qatar has announced $200 billion in new infrastructure projects [R2] associated with the 2022 World Cup, including 8 new stadiums.

The decision as to which country gets to host the World Cup is made by FIFA’s inner circle, its 25-member Executive Committee. In 2010 FIFA held votes on the awarding of the 2018 and 2022 World Cups at the same meeting. Later, Sepp Blatter, FIFA’s long-time president, admitted[R3]  that there was vote trading across the two votes, and that it was a mistake to have made both decisions at the same time.

But vote trading was the least of FIFA’s troubles associated with the World Cup votes. In February it was revealed that the family[R4]  of a member of FIFA’s Executive Committee in 2010 received $2 million from a Qatari company controlled by a former football official in the months following the vote. On the heels of that revelation we learned that the 10-year old daughter of another member of the FIFA Executive Committee[R5]  has $3 million deposited into a bank account in her name. The funds allegedly came from the (at the time) president of FC Barcelona (home to Lionel Messi), which is sponsored by Qatari Airlines and the Qatar Foundation.

These allegations are cited in Pieth’s final report, which says that the future integrity of the organization depends a great deal on how it responds[R6] : “If FIFA is to emerge from the scandals of recent years it must now produce a convincing and transparent answer to any issues relating to hosting decisions… if allegations are confirmed FIFA must ensure that the consequences are meaningful.“

However, FIFA’s ability to address the World Cup vote scandal may be limited by the fact that most of the recommendations of Pieth’s committee have not been implemented. Further, Pieth observes in his report that “some Members of the Executive Committee have not been sufficiently committed to change.”

In a forthcoming paper I compared the actions taken by FIFA to three reports which made recommendations for steps FIFA should take to improve its governance, as well as to a “good governance” scorecard[R7]  developed by several academics in Switzerland for evaluating international sports organizations.

What I found is in agreement with Pieth’s conclusion that “reform is not yet finished.” In fact, it has a very long way to go. Of the 59 total recommendations in the three reports FIFA is judged to have implemented 7, partially implemented 10 and failed to implement 42. With respect to the “good governance” scorecard, FIFA’s reform effort lifted their score from 55.2% of total possible points to 56.3%. Under each of these metrics, FIFA did not implement the vast majority of recommendations offered by experts in good governance.

For its part, FIFA has hired an investigator, Michael Garcia, a former US federal prosecutor, to investigate. In his report, Pieth says that this process needs to go forward, regardless where it leads: “FIFA and all involved individuals must therefore fully and unconditionally cooperate with Mr. Garcia’s investigation.” However, Pieth also refers to recent media reports of a “plot” among some on FIFA’s Executive Committee[R8]  to remove Garcia as an investigator.

For FIFA, its main problem may not lie in the specific details of the 2010 vote, or even its other scandals, but rather in that it has not yet adopted a strong program of governance reform, in the words of Pieth, in order “to truly reach the standards accepted in the corporate world.”

The stakes involved go far beyond corrupt officials who may be trading votes for money and other favors. For example, Qatar’s 2022 World Cup has faced challenges[R9]  with respect to the timing of the event, which is scheduled to take place during the hottest part of the summer. More significantly, Qatar has faced claims that workers[R10]  who are building the infrastructure for the World Cup, are dying by the hundreds, due to unsafe conditions. Similarly, Russia’s incursion into Crimea has led to international sanctions. Two US Senators are among the voices calling for FIFA [R11] to revisit its 2018 hosting decision.

Whatever actions FIFA may or may not choose to take with respect to Qatar and Russia, one thing seems clear: FIFA’s incomplete reform effort stands in the way of a stronger organization, better able to handle challenges and controversies. FIFA’s ability to effectively govern itself goes well beyond issues of corruption.

* Roger Pielke, Jr. is a professor in the environmental studies program at the University of Colorado. He has been researching sports governance since 2011.
————————————————-
[R1] http://www.baselgovernance.org/fileadmin/FIFA/Final_Report_by_IGC_to_FIFA_ExCo_EN.pdf
[R2] http://gulfnews.com/sport/football/qatar-cuts-2022-world-cup-stadia-from-12-to-eight-1.1322179
[R3] http://news.bbc.co.uk/sport2/hi/football/9387891.stm
[R4] http://www.telegraph.co.uk/sport/football/world-cup/10704290/Qatar-World-Cup-2022-investigation-former-Fifa-vice-president-Jack-Warner-and-family-paid-millions.html
[R5] http://www.telegraph.co.uk/sport/football/world-cup/10775490/Daughter-of-World-Cup-official-had-2m-put-into-account.html
[R6] http://www.baselgovernance.org/fileadmin/FIFA/Final_Report_by_IGC_to_FIFA_ExCo_EN.pdf
[R7] http://www.idheap.ch/idheap.nsf/view/D6156F1EF87ACB07C1257B3900538D87/$File/IDHEAP%20Working%20Paper%201-2013.pdf
[R8] http://www.theguardian.com/football/2014/mar/25/fifa-ethics-investigator-michael-garcia-survives-plot-overthrow-him
[R9] http://www.bbc.com/sport/0/football/25653594
[R10] http://www.theguardian.com/world/2014/feb/18/qatar-world-cup-india-migrant-worker-deaths
[R11]http://www.kirk.senate.gov/?p=press_release&id=1018

Some News

We're also bringing on Emily Oster (@ProfEmilyOster) and Roger Pielke Jr. (@RogerPielkeJr) as contributing writers at @FiveThirtyEight — Nate Silver (@NateSilver538) March 14, 2014

I'm thrilled to be joining Nate and the excellent team @FiveThirtyEight!

Two US Senators Write to FIFA, Ask for Russia to be Suspended

Two US Senators, Mark Kirk (R-IL) and Dan Coats (R-IN) have written to Sepp Blatter, FIFA president, asking for FIFA to suspend Russia . Here is the letter in full:

March 6, 2014

Joseph S. Blatter
President, Fédération Internationale de Football Association (FIFA)
FIFA-Strasse 20
P.O. Box
CH-8044 Zurich
Switzerland

Dear Mr. Blatter:

In light of Russia’s military occupation of a sovereign Ukraine, we respectfully ask that you urgently convene an emergency session of FIFA to consider suspending Russia’s membership in FIFA, stripping Russia of the right to host the 2018 World Cup, and denying the Russian National Team the right to participate in the upcoming 2014 World Cup in Brazil.

According to Article 3 of the FIFA Statutes: “[d]iscrimination of any kind against a country, private person or group of people on account of ethnic origin, gender, language, religion, politics or any other reason is strictly prohibited and punishable by suspension or expulsion.”

As you know, there is ample precedent for suspending or expelling a FIFA member, such as when FIFA denied the then-Yugoslavia the right to participate in both the 1992 European Championship and the 1994 World Cup.

Since Russia has similarly displayed a brazen disrespect for fundamental principles of FIFA and international law, I hope you will agree that it does not deserve the honor of either hosting the World Cup or participating in one. We ask that a more deserving World Cup 2018 bid should be re-considered instead.

We look forward to your timely action on this matter.

Sincerely,

Senator Mark Kirk

Senator Dan Coats

The action by FIFA in the early 1990s against Yugoslavia only took place after the UN Security Council had voted to place sanctions on the nation.

Doping in Sport from PTG 2013

Today in ETHN 3104 we'll be watching selected presentations from PTG 2013, including Pound, Bock, Perikles and Palmer, to conclude our unit on doping in sport.

You can find those presentations in the video above at about

Pound = 1:34
Bock = 1:54
Perikles = 2:43
Palmer = 3:02

Enjoy!