Football and tail risks

Let's not forget the lessons here

“Tail risk is a form of portfolio risk that arises when the possibility that an investment will move more than three standard deviations from the mean is greater than what is shown by a normal distribution. Tail risks include events that have a small probability of occurring, and occur at both ends of a normal distribution curve.” -Investopedia

A dude that I’ve gone hot and cold on over the years, but someone whose writing, particularly in Antifragile, has been fairly influential on my thinking about football and life in general, is Nassim Nicholas Taleb.

This is the person who coined the popular term ‘black swan’, an event so beyond our popular understanding of the world that it fundamentally shifts our concept of the world. Taleb, however, has been loudly arguing that the current COVID-19 pandemic is NOT a black swan.

And he’s right! The film Contagion, which involves a fictional virus far worse than this one but otherwise gets the science right in almost every respect, was made in 2011! And epidemiologists have been warning us about the likelihood of a global pandemic for decades. In that sense, COVID-19 represents a true tail risk, not a black swan event. I know this personally because the large, public institution I now work for—one that is often criticized for its bureaucracy and sluggishness—had a pandemic response plan in place for years, and was quick and decisive in responding to the crisis.

The reason is that many of the epidemiologists and public health experts that have been warning us for the past two decades work there!

Now, you might think, how can I expect tail risk preparations from an institution as relatively rinky-dink as football?

Well, I would agree that a sport like football doesn’t have the resources or the flexibility to plan for a situation like the one we face today, but I don’t agree that this an excuse for not having a plan in place at all, even a plan that lacked certain specific details. What do institutions like the F.A. exist for, if not for doing some of this long-term planning, taking on some of time and resources to prepare for tail risks on behalf of the teams that play in its leagues?

People, especially politicians, love nothing more than to bloviate about the ‘lessons of 9/11,’ but it seems to me that lesson wasn’t about terrorists or airport security or invading Middle Eastern nations that had nothing to do with it, but instead that world-changing events, whether that, or the 2008 crash, the collapse of the Soviet Union, the entire 1960s, the H-bomb, or World War II, or the Great Depression, or the Spanish Flu, or the Great War and so and so forth, happen with some generational regularity!

Just like we would expect one team to do a Leicester (or, on the flip side, a Borussia Dortmund) now and again, we should maybe listen to experts on the likelihood of certain ‘unthinkable’ events taking place over the next eighty years, including the prospect that football may be unplayable in June and August in two decades time, to take one example off the dome.

So no, I’m not letting football or any other organized sport off the hook for failing to prepare and making financial and organizational decisions on the fly.

But that’s the past. Let’s talk about the present.

A few days ago, my wife sent me a BBC story on the underground caves inhabited during WW2. These weren’t government-planned projects, the result of a grand committee, but a communal enterprise in response to inadequate bomb shelter provisions from the government.

The idea here is that ingenuity tends to shine best in a crisis, and it will emerge in the next few days that some clubs are handling the current crisis better than others. So I would urge clubs, and decision-makers, to start talking to other clubs, conferencing, chatting on Zoom, to see who is doing what and how well it is working. Compare notes, talk about collective actions, don’t wait for the government to save you, because chances are they’re not coming today, or any time soon.

That’s for now…while the future is still uncertain, I would only hope that we don’t forget the lesson here, that we will now understand that the Buddhists were fundamentally correct—the world is impermanent by nature. Our glossy, commercial enterprises, our stock prices, our global economy—it’s all a house of cards. It’s a cold world out there. Don’t get frosty. Get prepared.

We need to wake up about what COVID-19 means for football

Forget debating about how to complete the season; the game will literally never be the same again

It’s been mildly absurd to witness the on-going debate about the mechanics and implications of ‘completing’ the 2019-2020 season. Though I’m sure this is of some interest to many people, it does feel slightly like we’re playing soccer with a chunk of ice on the sinking Titanic, debating whether a goal should have counted or not.

I don’t want to sow panic or play Cassandra, but if things carry on as they are (more on this later), the reality is we will likely not see another live professional football match until 2021 at the earliest. In the interim, the TV rights ‘bubble’ we have talked about for the past two decades will have imploded, taking along with it the fortunes of broadcasters across Europe and North America. Many smaller clubs will wind down and completely cease operations. Players, many of whom will have gone unpaid for a long period, will increasingly take early retirement, beginning with the precarious lower leagues and, over time, enveloping the Premier League and other big European leagues as well.

The impact on the many tertiary industries that rely on football—journalists, consultancies analysts, vendors, etc.—may be incalculable. So if and when football does return, it may resemble, for a time, that ‘Yankees’ game in Interstellar.

Things are not normal, and I think we need to look at these truths head-on and accept them as adults. As someone who suffers from anxiety, I know intimately that this is something that is easy to write, extremely difficult to do.

So the question is: what can we do?

First, I think it’s important to give yourself time to accept what is happening and to mourn. A lot of people are taking in comfort in revisiting old debates, providing data for historic seasons, ranking all-time greater headers etc., and this is good and healthy. But once the reality of what we’re going to face dawns on all of us, we will need to accept that we’re not going to go back to normal.

I would therefore urge journalists, analysts, anyone involved in football reading this to consider making plans to pivot. Perhaps that means exploring how your skills will be useful over the course of this crisis, which could mean switching careers. Or it could mean exploring how to use your connections within football to help collectively come together to devise workable strategies to help steward the game through what is probably its greatest crisis since the Second World War. We will need to think clearly about what we are going to do over the next year and a half.

Now, that said, things could change. We’re learning things about the novel coronavirus every day. Though I’m not an epidemiologist or a public health expert, I think there is a lot of promise in the notion of deploying mass testing as a kind of proto-societal vaccination, which would effectively allow us to identify people with the disease, isolate them until they recover, and keep strict restrictions on movement in place until we generate a vaccine. In this case, football may be able to eventually make some sort of early return. So there is some room for taking a wait-and-see approach.

But hope shouldn’t be the basis of planning, kind of the running theme of this newsletter! We need to accept the possibility of a worst-case scenario, and plan for it—both as organizations and as individuals. Though I have a very limited platform, I will do my best in helping in this role.

Finally, I will end on some good news—football will never die. The game will always, always be with us. It has survived the two world wars, the Spanish flu, and Margaret Thatcher. Though we may all need to temporarily walk away from the game, it will be there when we are able to return. We all need to stay strong. We ARE going to get through COVID-19. The reality is we are going to lose loved ones, neighbours, friends. No one will be unaffected. But football is immune, and that alone should give us hope.

Well this is all a bit weird, isn't it?

The lesson of COVID-19

Two weeks ago, we were all making seemingly innocent jokes about how it would be hilarious if Liverpool were denied their first title in two decades because of the coronavirus.

Well, that nearly happened! It may STILL yet happen!

Two weeks ago, we were all just sort of waiting around for someone else, the government maybe, or ‘scientists,’ to ‘sort out’ coronavirus for us. Today, nearly every sporting league in the world will have a major asterisk next to the 2019-2020 season, and in Ontario, where I live, we’re about to enter three weeks of government-mandated social distancing.

You probably know all this already.

I would say this is a black swan event, but it isn’t really. Various epidemiologists have been warning this was on its way, and—voila!—here we are, more or less unprepared. Governments the world over are giving conflicting advice. The Premier League hemmed and hawed over whether it would stop games even as it knew players were getting tested for COVID-19, and then made the call only hours after essentially telling everyone it would be more or less business as usual.

I don’t have any profound message here beyond—we all suck at contingency planning. Suck. At. It. We like to think the invisible hand of group behaviour will take care of us in these situations, but what will we do when millions aren't available to pay their rents in April? Who will compensate all of us for the massive economic loss on its way?

All of this is to say, hopefully, after the dust settles on what is going to be a couple of long, hard years, after we mourn our many dead (something we’re not even mentally prepared to deal with yet), hopefully we might take some hard lessons from all this, particularly with that other slow burn of an apocalyptic problem on its way—climate change.

This is a severe global health crisis, so I won’t diminish it in any way by bringing football into the discussion. But I will say that contingency planning costs little, takes very little of resources, and doesn’t need to be revisited over and over again. You can do it for a number of broad, closely related crises. You can do it either as a club, or, ideally, in tandem with your league and FA.

Because if we don’t learn our lessons, this will all happen again.

Finally, I would please urge you to consider supporting those you know who will likely survive the health scare but who will face grave financial hardship in the coming weeks. Throw them some money! Even if they don’t ask for it! There are many who rely on sports to make their living, and this is going to be absolutely devastating for them. Please consider helping out.

I’ll be back next week!

Data scientists in soccer need to grow a pair!

You must take power! Like Stalin! (not like Stalin)

I’m going to wind down this series on the Footballing Theory of Value this week. Before I do, I want to look at how understanding competition as the sole source of value in football can help aspiring analysts and, perhaps, the entire analytics movement.

Similar to naive, struggling clubs that throw their hands up as rich, historically competitive sides consolidate power and use threats such as the ‘super league’ to leverage their collective power, analysts often fall into the trap of taking moral umbrage at clubs that refuse to embrace the full spectrum of analytics tools as their disposal to gain an edge on their competitors.

Worse still, analysts have today come to convince themselves of some dubious solutions to this problem. Some of them believe convincing clubs to embrace analytics means ‘speaking in a way coaches understand,’ or, more diplomatically, taking the wrong-headed concerns and focus of old school managers seriously prima facie. Other analysts believe they just need to ‘prove’ to people in positions of power that analytics methods can produce tangible, lasting results, whether in recruitment, tactics, player development, etc.

In the end, these solutions all involve some form of argumentative or rhetorical skill, which, you know, isn’t what these data scientists have studied their entire lives to do (nor do I think they necessarily need these skills to succeed, but I will get to that in a moment).

The problem, instead, is that some analysts tend not to fully realize the very real, very stark power dynamics at play in most football clubs, and direct their appeals to the wrong people in the team in the wrong way.

Just as the value of football is derived solely from competition, so too are certain figures at clubs in perpetual competition to keep their job, whether it’s a manager trying to push beyond the industry average two-year tenure, players trying to land a spot in the first team, or directors of football vying to prove their methods are invaluable to the club. What this means is that analysts will appeal to a director of football, manager or player only inasmuch as the latter group thinks the analyst will help them keep their job.

Great! You might be thinking. All you need to do is to make a case for why your work as an analyst will reflect well on the person you’re trying to convince (which will differ depending on whether you’re an analyst within a club trying to exert more power, an analyst seeking to get a job with a club, or an independent consultant).

Unfitforpurpose @unfitforpurpose

There are some concerns that Man Utd will will spunk a load of money on an analytics research group and then sideline it so it has no real effect on their decision making. You know, like Arsenal.

The problem, of course, is that your work as a data scientist won’t be as effective if it is primarily there to make someone else look good. For one, data science doesn’t work that way; the work of an analyst is to tilt the odds in your team’s favour, but there is a lot of random variation in football, and positive results tend to accrue over time and are not always obvious to those in power.

A much more ideal situation, therefore, is for analysts to have more autonomous and clearly delineated decision-making power within a team. Maybe the analyst has final say in developing recruitment short-lists for example, with the manager following through in collaboration with the DoF. Or perhaps the analyst has full authority in preventing players at risk of injury of starting.

This all might sound insane! Analysts are so used to grovelling to people in power, making suggestions, coming up with attractive data viz and hinting at what a manager may or may not do to win. But the reality is, analytics must move beyond begging for power to survive and to make a lasting influence.

Working the owners

One way to secure this power would be to start by working the highest rung on the hierarchical ladder—the owners. Owners tend to come from the Magical World of Business, where data science is often already firmly established in banal fields such as market analysis and sales or whatever. They fashion themselves as smart numbers people.

Analysts have successfully taken this approach in the past (there are many examples). Still, even in these cases I believe analysts haven’t pushed for enough power, nor have they successfully worked to properly separate the sphere their work from that of the manager or the DoF. So inevitably when clubs struggle and end up cleaning house, the analyst is often the first to go, followed by articles in the Telegraph talking about the damned twenty-something nerd who had power to make decisions, it’s really their fault.

That’s why analysts shouldn’t just argue to owners why THEY are the right person for the job, but that the existence of the job and its attendant power itself is critical for team success. “Sure, I might suck, and you might need to fire me, but the team should ALWAYS have an analyst role with locked in decision-maker power over X,Y, and Z, and here’s why.”

The short of the long here is that analysts need to get some balls, they need to stop whingeing about their lack of influence and how dumb people who run clubs are, they need to understand these people aren’t dumb (or at least as dumb as you might think) but just unwilling to concede power.

Once analysts understand they must struggle to exert power in football, then they might begin to get somewhere.