Book review: The Economics of Football / The Tebbit Test

Andrew Smith finds two books that mix finance and sport could aptly be described as a 'game of two halves'

Many years ago, my sports teacher threatened my misbehaving class with extra maths instead of the next football lesson. Seeing my obvious delight, he added "except for Smith, who will have extra football next maths lesson". So it was with some trepidation that I agreed to review The Economics of Football.

I need not have worried. This book is an academic treatise, much more about economics than football. Useful prior knowledge would include multivariate statistics and game theory rather than understanding the offside rule.

Football throws up many economic puzzles. Footballers in the UK work in a strange labour market of long-term contracts and a short 'transfer window', common to all players, for moving between clubs. The book relates employment arrangement to another unusual feature of football: the sub-optimality of winning games.

Clubs do not maximise gate revenue by assembling the strongest possible team, because crowds don't show up to watch a foregone conclusion. Restrictive terms on player employment can improve profitability for the league, hindering any individual club's ambitions of dominance. Why are footballers so well paid? What drives match attendance? How do bookmakers' odds relate to probabilities of winning?

Where should a player aim in a penalty shoot-out? Read this book for answers to these questions and any many more.

The disadvantage of this book is its academic rigour. Insight is the reader's reward for ploughing through pages of formulas, hypotheses and tables. Escapists from the worlds of work and sport this summer will not find this book ideal holiday reading.

A better alternative is The Tebbit Test - The Memoirs of a Cricketing Fanatic, by Icki Iqbal. The book charts Iqbal's life from his early childhood in Karachi though a distinguished actuarial career in the UK to his post-retirement experiences of Parkinson's disease. From my perspective, the passages about cricket serve well to punctuate the more engaging sections covering everything from 1960s insurance offices to religion, politics and family life.

After rising to board level at Royal Life, Iqbal became a consultant, first at Bacon & Woodrow, then at Deloitte, where I had the good fortune to work with him. The most significant event of this period was England's cricketing triumph over Australia in the 2005 Ashes, followed by Freddie Flintoff's victory parade through London. Iqbal recalls how Deloitte's entire office emptied onto Fleet Street to support our heroes, with the exception of the then senior partner who was 'more used to receiving than giving adulation'.

At times rambling, Iqbal's style is also humble, entertaining and engaging. As a long-time London resident, I find it difficult to imagine how it feels to migrate to London from somewhere else, as hundreds of thousands have done. Iqbal gives a fascinating and humorous personal account of his experiences.

In London in 2012, sport has temporarily taken over our lives. Our city might be a very different place had we heeded the final chapter of The Economics of Football, counting the costs and benefits of major sporting events to host cities. This is a good time to enjoy one of these two very different books, even if you're not a sports fan.

Andrew D Smith is a member of The Actuary's editorial advisory panel