Economics is the soul of everything, including big-ticket sports. Now that football is the number one sport in the world, the growth might look obvious. But it took more than a few decades for the game to attain this cult. Was it chance that we reached here to a billion-audience, was it smart visionaries that made it happen or was it social behaviour?
Robert Prechter’s Socionomics challenges the standard presumption that social mood is buffeted by economic, political, cultural trends and events. What it proposed was that social mood was patterned and a natural product of human interaction. It’s the social moods’ trend that determines the character of every social action, including the sport we watch and make popular. Measuring the popularity of sport may be tricky.
A recent study by MLBAmerica.com showed that baseball did not rank number one on the list of favourite sports in the 13-17 age group. It ranked fifth. Baseball is slowly but surely falling behind in the ranks.
Prechter’s pioneering studies had repeated forecasts of selling baseball clubs, taking profits on baseball cards, signing long-term contracts for players and the crash of salaries and celebrity values. Prechter saw it coming and he was right on target.
On the other side, 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. Despite how it sounds, football was classified as a bear market sport and baseball a sport for bull markets. This may all look so subjective, but violence in sports can be measured.
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 and yellow cards are a violence check. Baseball’s positive correlation to the Dow and football’s negative correlation are easy to prove, when you see the Dow at 10,000 for more than a decade, all when football was thriving. It’s the cyclicality of the whole thing which seems hard to counter.
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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. What can be seen on the big picture as a growth in football came at the expense of baseball. This can be understood at the level of performance of Germany vs Brazil or Italy vs France.
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 nine, 10 and seven times, respectively, since the 1930s. This makes them the top rankers. Performance cycles suggest that top rankers disappoint and worst rankers surprise as performance reverses. This is why Argentina, with a four-time rank in the top 3 and England with just one win since the 1930s makes them good potential for best value pick. Social behaviour, like everything, is mathematical, but then mathematics cannot give as much pleasure as a world cup final. It’s sometimes good to just enjoy.
The author is CMT and CEO, Orpheus CAPITALS, a global alternative research firm