## Thursday, May 12, 2016

### How did Leicester City do it?

At the start of the season, you could get 5000:1 odds on Leicester City F.C. winning the 2015-16 English Premier League Championship. Of course, Leicester did win, in what one writer called "the unlikeliest feat in sports history".

A friend wrote me that Leicester City is often said to have "defied the odds" to finish on top. That's a metaphor, of course; odds aren't something you can literally "defy," like a bad law or your supervisor's instructions. What does the metaphor mean? To me, it implies that the odds actually *were* 5000:1, that the team did actually hit the longshot outcome, that they were the "1" instead of one of the "5000".

Let's suppose, for whatever reason, I offer you 5000:1 odds that a fair coin will land heads. You bet \$10, the coin does land heads, and I pay you \$50,000. Did you really "defy" the 5000:1 odds? That doesn't sound right. At best, you "defied" odds of 1:1.

So, the question is: at the start of the year, was Leicester City's expectation really a 1 in 5,001 chance? Were the Foxes really that bad a team, in terms of talent? The evidence suggests not.

After 17 of the season's 38 matches, Leicester City sat at the top of the table (I think "top of the table" is English for "first in the standings"), two points up on second-place Arsenal, and fourth overall in goal differential (+13, behind teams at +17, +14, and +14).

Suppose Leicester were truly a bad team, and had just had a run of good luck. In that case, what would their chance be of hanging on to win the championship? Still pretty poor, right? They're only two points up, with several superior teams right on their tail.

But, the bookmakers had them solidly in the mix. Here are the revised odds on December 21, after 17 matches:

Odds  Pts
--------------------------------
1.  Leicester          10:1   38
2.  Arsenal            10:11  36
3.  Manchester City    15:8   32
4.  Tottenham          20:1   29
5.  Manchester United  18:1   29
--------------------------------
9.  Liverpool          22:1   24
--------------------------------
15. Chelsea            66:1   18

Clearly, Leicester City is still considered a lower-quality team than its rivals. Despite Arsenal trailing by two points, bookmakers still give it ten times as much chance of winning as Leicester.

But ... the odds against Leicester hanging on were only 10:1. If the Foxes were really as gawd-awful a team as was thought at the beginning, their odds would be much worse.

After every Premier League season, the bottom three teams are "relegated" to the lower-tier Championship League, while that lower league's best three teams are promoted to replace them. At the beginning of the season, Leicester City was thought to have a 25 percent chance of relegation -- you could get 3:1 odds that they'd be in the bottom three. If they were still thought to be that bad, wouldn't they be much worse than 10:1 to win it all?

For a mirror-image comparison, look at Chelsea, one of the league's elite teams. After those first 17 matches, Chelsea sat 20 points behind Leicester, in fifteenth place out of twenty teams. Despite the poor start, they were still given a 1-in-67 chance (66:1 against) of coming all the way back to take first place. That's because Chelsea was understood to be a very skilled team -- they were the 13:8 favorite when the season started.

Now: if Leicester were as bad as Chelsea were good, you'd think the chance of them dropping to relegation would be about the same as the odds of Chelsea rising to the top. Right? It's kind of symmetrical. Not completely, because Leicester is at the top and Chelsea is only *near* the bottom. But, that's mitigated by Chelsea needing to be *the* top team, and Leicester City needing only to be in the bottom four.

Not perfectly symmetrical, but reasonable.

But: the symmetry doesn't extend to those mid-season odds. A Chelsea comeback was pegged at 66-1. But a Leicester collapse was 3500:1.

Clearly, by December 21, the betting market evaluated that Leicester was a pretty good team. Not a great team, but a good team. For more evidence of that, they're pegged at around 25:1 to repeat next year. The bookmakers clearly don't think Leicester City was a bad team that just got very, very, very lucky.

So, I'd argue that Leicester didn't "defy the odds."  They were just a better team than 5000:1 from the beginning.

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Well, that might not be strictly true. Maybe as the season started, they were an awful team, but they got better quickly. Maybe in week 2, they signed the soccer equivalent of Babe Ruth and Wayne Gretzky and Peyton Manning and Michael Jordan and Pele. (Sorry, I don't know anything about soccer ... "Pele" was the best I could do.)  Or maybe the coach figured out a strategy to take a bunch of mediocre players and make them great (or make the team able to win despite the players' mediocrity).

But, it seems more likely to me that the team was just good from the beginning, and the oddsmakers got it wrong. Well, more importantly, the community of betting soccer fans got it wrong. Because, you'd think, if even a few sharp bettors figured out that Leicester was a pretty good team, they would have moved the odds -- not just by betting on a championship, but probably on available side bets too.

So, what happened? That's a huge question. I think this is the biggest betting market inefficiency I've ever seen. It's not like the 1969 Mets, who probably *did* just get lucky ... or the 1980 "Miracle on Ice" team, who, when you watch the game, you can tell were very much inferior but very much lucky. This is a case where a legitimately very good team got evaluated as very bad -- by *everyone*, even the best sabermetric soccer types and bettors.

Of course, Leicester City isn't actually the most talented team in the Premier League -- at least, not according to betting markets. For next season, the Foxes' 25:1 odds rank only seventh -- the favorite, Manchester City, is at 3:2. Ignoring vigorish, the oddsmakers think Man City has ten times the chance than Leicester does.

Assuming that Leicester should have been that same 25:1 this season instead of 5000:1 ... well, that still seems like an exploitable opportunity that, in theory, never should have happened in an efficient betting market.

So, what did happen? How did everyone miss that Leicester City was a good, if not great, team? That's not a question about oddsmaking. It's a question about soccer. What happened? What made Leicester so good, that nobody had seen coming? How did they build such a successful team on their very low budget? Is there a "Moneyball" secret?

I've seen some articles that broke down some stats, about passing and shots on goal and such. But this is a situation where we need more than that. It's like, if an expansion MLB team goes 105-57 with castoff players, it doesn't help much to say, "well, they won because they had a high OPS and their pitchers struck out a lot of guys."  The question is -- how did they get those replacement-level players to have that high OPS and strike out a lot of guys? Was it something they saw in those players? Was it coaching? Was it sign stealing?

-----

OK, after wondering about all this, I figured, hey, the internet exists, maybe I should do some research. (Which consisted of Googling, and getting advice from my friends.)

And, yes, there seems to be an explanation. Apparently there is indeed a bit of a Moneyball story here. My friend John steered me to an article by Leicester City fan John Micklethwait (who this year neglected to make his annual 20 pound bet on Leicester, and missed out on what would have been a 100,000 pound win).

Leicester City made three major acquisitions in the off-season, all with "Moneyball" overtones of underappreciated players. First, N’Golo Kanté, who was number one in France last year in the (apparently overlooked) statistic of interceptions made. Second, Jamie Vardy, who is known for speed (which Leicester used to strategic advantage, as we will see). And, third, Riyad Mahrez, who is known for "a rare ability to dribble past people."*

(* Correction: two of the three were actually signed by Leicester in earlier seasons. See note at end of post.)

They got those guys really cheap.

Then, they analyzed video, and came up with this:

"Leicester players even seem to foul scientifically, slowing down their opponents by taking turns to obstruct them, so that few of the Leicester players get booked or sent off."

And, finally, the most interesting strategic twist: the rapid counterattack.

"This in itself is another innovation. All teams have always counterattacked, but few have based their game so completely around it. In most matches, the team that keeps control of the ball more scores more goals. Teams like Barcelona and Arsenal are famous for never letting their opponents touch it. Not Leicester. Last weekend, Swansea had possession 62 percent of the time, but they still lost 4-0. Leicester’s tactic is to let their opponents have the ball, wait until they make a mistake and then attack at remarkable speed: Hence all those quick players and the unusual disciplined approach."

Well, I love that theory! Because, it's what I argued the Toronto Maple Leafs might have been doing a couple of years ago, when they made the playoffs despite possession stats near the bottom of the league.

Not only do I like that theory the best, but I also believe it's the most plausible. Because, when the Foxes bought those three players, it was public knowledge. It was no secret that Kanté is a great tackler, and Vardy is crazy fast, and Mahrez has dribbling skills (videos are easily found on Google). So, the odds should have accurately reflected those acquisitions.

On the other hand, the counterattacking strategy? Probably, nobody knew manager Claudio Ranieri was going to try that tactic until the season was underway. Even then, it would take a while before it became apparent how well it worked. So, that *could* explain why even the most knowledgeable soccer experts didn't see it coming at all.

For what it's worth, here's an article about Leicester's counterattacking strategy, with accompanying video of some of their quick transition goals. And, something my friend Bob wrote me, from observation:

"They used the counterattack as their primary mode of offense. They had several wins early in the year with possession below 30%. Manager Claudio Ranieri would frequently position one or two players close to midfield on opponents' corner kicks and free kicks in order to better exploit his team's speed advantage. As the season progressed, teams adapted to this and Leicester's possession totals increased. Leicester adapted by tightening up its defense, winning a string of 1-0 games (4 out of 5 in one stretch)."

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From all this, here's my wild-ass bottom line, the working hypothesis that my imperfect Bayesian brain is pulling out of its metaphorical butt:

1. Leicester City improved over the off-season by pulling a Moneyball, by acquiring underappreciated players at bargain prices.

2. They implemented a novel strategy emphasizing speedy counterattacking, and it worked, but became less effective as the opposition recognized it and learned to adapt to it.

3. They did play unexpectedly well, in the traditional sense, apart from the strategy.

4. That unexpectedly good play might have been playing over their heads. They were significantly luckier than their talent, judging by the odds during and after the season.**

(**Any championship team is, in retrospect, likely to have played better than its talent, but I'm arguing in this case for even more luck than for a usual champion.)

It's kind of a vague hypothesis, I know, a little bit of everything. But my best guess is ... it *was* a little bit of everything. Because: (a) can you really turn a bad team into a champion with just three players? (b) the odds insist Leicester was luckier than its talent; and (c) even if you discount the opinions of observers, the stats show the Leicester did repeatedly win with very low possession time.

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So, what does that mean for next year?

The improvement in players (#1) will remain, if the club doesn't sell them off. And, of course, we know luck doesn't persist (#3 and #4).

That leaves #2, the counterattack. Will the strategy continue to work, or will the opposition adapt to it enough that the advantage will dwindle? Normally, I'd just check the betting market, but I'm not sure what the odds are telling us. As mentioned, Leicester is only the seventh favorite to win next year, at 25:1. That's much smaller than 5000:1, for sure. But how much of the difference is from the skill of their new players, and how much is from an expectation that a less traditionally-skilled team can still win by implementing a disruptive counterattack strategy?

-------

In any case, I think the big story here isn't that Leicester City beat 5000:1 odds. I think the big story here is how Leicester City found a "Moneyball" way to beat the system on a low budget.

I'd argue that this is the "real" Moneyball story, the one we were theoeretically waiting for.

The original story, about the 2002 Oakland A's, isn't that impressive to me. Sure, the 2002 Oakland A's won 103 games on a low budget, but we kind of know how they did it. Yes, they used sabermetrics, but those gains were marginal. Most of their advantage was having a supply of excellent, pre-free-agent players who came cheap, as well as a large dose of luck. (I don't have public luck estimates handy for 2002, but I once figured the A's were lucky by 12 wins that year. Seven of those were from beating their Pythagorean Projection.)

This Leicester City story is different. This is a legitimately bad team, picking up three "free agents" who were legitimately undervalued and overlooked, and then implementing a system that effectively overcame the skill advantage of some of the best and most expensive football talent on the planet.

Even if only half of Leicester City's improvement was Moneyball, and the other half was luck ... well, even then, the Foxes of Leicester City created millions of pounds worth of wins out of basically nothing.

Could that really be what happened?

-----
UPDATE: James Yorke on Twitter has pointed out that two of the three players I mentioned have been with Leicester more than one season. Jamie Vardy was actually signed in 2012, and Mahrez in 2014. Only Kanté was new for 2015-16.

Mr. Yorke also points out that other, lesser players were signed over the past few years, too.

So, Kanté was the main signing in the most recent off-season.  This suggests that most of Leicester's success is #2-#4, with less of it being #1 (being mostly Kanté).

At Thursday, May 12, 2016 3:27:00 PM,  Guy said...

"So, I'd argue that Leicester didn't "defy the odds." They were just a better team than 5000:1 from the beginning."

Phil, I think you are taking the statement a bit too literally. When people say that Leicester beat the odds, or represents the biggest upset in sports history, they mean to include the idea that the team was badly underestimated. Underestimated by oddsmakers, by fans, by the market place (in terms of player salaries) -- by everyone whose job it was to evaluate their chances of success. And conversely, what makes the story fun and interesting is that they proved the world wrong, precisely by being a much better team than anyone understood.

Consider the reverse: your careful analysis reveals that they really were a vastly inferior team, one that would win the title only once in 5,000 tries if we could replay the season a million times. That would be a story of *injustice*, of a crappy team getting a title it didn't deserve through dumb luck. That wouldn't be a charming story at all!

Now, understanding *why* they were so underestimated is certainly a valid and important inquiry. But I think demonstrating that they were a much stronger team than was understood at the start of the season does more to confirm than refute the "defying the odds" story.

At Thursday, May 12, 2016 3:35:00 PM,  Rob Pitzer said...

Even with a win in the final game, Leicester also finished with a point total that would not have won the league about 90% of the time since the inception of the EPL. If they lose, their 80 point total wouldn't have been good enough in any of the preceding ~25 years. (More or less -- I'm going from memory.)

At Thursday, May 12, 2016 3:59:00 PM,  sam said...

Hi Phil! A few thoughts, from this casual-to-moderate soccer fan:

- One major British bookmaker (Coral) posted their thoughts on the odds, both pre-season and mid-season, and even if you haven't followed soccer in the past, he raises a couple useful points. One is that they generally don't see as much 'sharp' money on long-term bets (those bettors prefer shorter-term propositions), and so underdogs (favored by casual bettors) get over-bet.

- Counter-attacking underdogs have achieved plenty of successes over the years (e.g. Greece winning Euro 2004, Atletico Madrid winning La Liga in 2014 and in the Champions League finals 2014 and '16). Although I suppose you could argue nobody had won the Premier League with that style before, counter-attacking is a common strategy for smaller PL teams facing bigger ones (in the hopes of eking out a draw or 1-0 win). It's more unusual (and remarked-upon) for an underdog team to try to play possession-based attacking football, like Swansea did when they got promoted into the league a couple seasons ago.

- Ranieri is a very good manager. Earlier in his career, he carried the nickname "Tinkerman" for constantly changing his lineups and tactics, which supposedly destabilized some of the teams he had managed before. This year at Leicester, he used the fewest different starters of any team in the league -- which may be a mix of learning from past mistakes and good luck with health.

That all said, I do think the specialist-vs-generalist talent argument for soccer is in a different place than it is for, say, baseball. It may be that 'undervalued' players weren't ignored because their particular skills were not appreciated, but because they were only good at a few things, when big-money teams favor players who can do everything well (e.g. defenders who are skilled on the ball, like Boateng at Bayern or Sergio Ramos at Real Madrid).

At Thursday, May 12, 2016 5:56:00 PM,  Phil Birnbaum said...

Guy: Hmmmm ... can we compromise? Maybe "defying the odds" means "finding a way to win despite the long odds by finding a different path." So, if they would have been 5000:1 by normal means, but won because of an unexpected strategy, I'd be comfortable saying they "defied the odds" by finding a way to make them irrelevant.

How's that?

At Thursday, May 12, 2016 5:58:00 PM,  Phil Birnbaum said...

Rob: Interesting, thanks. Maybe it's that Leicester City was 500:1 to get to 80 points, and it was 10:1 that 80 points would be enough given that Leicester City got there. Let me think about that ...

At Thursday, May 12, 2016 6:04:00 PM,  Phil Birnbaum said...

Sam, Thanks, appreciate those observations!

1. If I saw a 100:1 shot going at 5000:1, I'd seriously consider throwing a couple of hundred bucks in. Just sayin'.

2. Has Ranieri achieved unexpected success with his other teams?

3. The author's followup post to the link you sent, "What price SHOULD Leicester have been?" looks really interesting too.

4. Would you say Leicester's counterattacking strategy was fairly usual, then, or did they do it to a larger or weirder extent than the other teams you mention?

At Thursday, May 12, 2016 6:08:00 PM,  Phil Birnbaum said...

Guy: Now that I think about it: if it had been "defied the oddsmakers" instead of "defied the odds," I'd agree with you 100%.

At Friday, May 13, 2016 2:22:00 PM,  Anonymous said...

Does anyone know what the longest pre-season odds were for an EPL champion, previous to this last season?

At Saturday, May 14, 2016 5:54:00 AM,  Standaman60 said...

Phil

Just caught up this and as a rational explanation for the rise of Leicester City it is as good as many that has been put forward by pundits steeped in soccer. The interesting thing is this is a triumph of dumb money over smart money. Outsiders in the EPL Championship betting are only backed by "fans" nearly all of those bettors scooping thousands from the bookies are die hard Leicester fans. There are plenty of savvy sports bettors who seek out +EV propositions and back them but they all missed what might be the greatest sports betting coup of all time.

So the question what did the smart money miss and why? Or maybe while we shouldn't completely ignore the crazy outlier we shouldn't read too much into it either. Obviously odds makers will adjust their prices accordingly but Leicester will be the recruiting sergeant for a million "fan"bettors in pursuit of the next Leicester but sadly at odds that offer nothing like the value of 5000/1

At Saturday, May 14, 2016 11:31:00 PM,  Anonymous said...

A few comments. If indeed they were a true 5000-1 team, over many years of "sports history" and the many sports, leagues and championships around the world, that doesn't seem like "the greatest feat in sports history,." Seems like something like that should happen relatively often like every 30 years or so (just a very rough guess).

Any team that overperforms that much is almost guaranteed to have gotten considerably lucky AND to have been considerably better than estimated originally. If we had an estimate of the uncertainty of the original odds, we could estimate both knowing nothing else about the team but their pre-season odds and the final result. But you surely don't need to compile evidence that the pre-season odds undervalued the team. That is almost for sure.

I don't know how much their mid-season odds are a good criteria for how talented the team really was at the beginning of the season. When a good team does really poorly mid-season or a terrible team does really well, fans, bettors, and oddsmakers will usually greatly over or understate their mid-season true talent. For example, if the Phillies were a pre-season .400 team and were 46-35 at mid-season, even if their updated estimated true talent based on the pre-season odds and their current record were only .420, most fans/bettors/oddsmakers would probably consider them - incorrectly - to be something like a .450 or .475 team. Baseball is a bad example because over the last few years baseball odds have become incredibly efficient because of the many smart bettors who use sabermetric principles and models. But my guess is that in soccer (even though there are many sharp soccer bettors especially in Europe), inefficient mid-season odds would not be that uncommon.

MGL

At Sunday, May 15, 2016 9:51:00 PM,  Eduardo Sauceda said...

There is a good reason for sharp bettors to eschew such future bets. First, the bookies take a large hold on a 20-way market, sometimes 50% (on 2-way bets it is usually under 5%). So, top teams odds are too juiced to have a +EV (positive expected value), and the only values are on lower teams when the sportsbook underrates them. You can see Coral having Chelsea as 3.57 fair value, and being "generous" offering 15/8.

But then, the larger odds on lower teams have bad bankroll growth profile, even with "great" +EV. A true 1000 team getting 5000 odds, a +400%EV would get only a 0.08% bankroll bet on a Full Kelly bettor, a \$8 bet on a \$10,000 bankroll (full Kelly is considered too risky, most bettors use 1/2 or lower fraction). So, sharp bettors often pass on these longshot values, as they are interested on growing the bankroll steadily, not hoping for a one-in-a-decade win.

In top of that, those futures imply tying the money for many months. That further discourages taking favorite bets. If you can lay 100-1 against Southampton or Everton winning the league (while they are offered 300), it would be a bad bet even if you know for sure they would not win. In 9 months your money would grow more invested than the 1% you "won" on the "safe" bet.