Premier League preseason rankings 11-20

Here's the bottom half of the table.

Usually this is much harder to predict, and most likely I'll get this wrong.  But I've made it with the intention of averaging out where they could finish since one or two unpredictable games throws this out of whack.

11. Norwich City 45 points:  Adding Ricky van Wolfswinkel and Gary Hooper gives them more consistent striking options than Grant Holt, who joined Wigan in the Championship.  Their back 4 has some issues, so while you can expect them to attack a bit more, they're still prone to suffering big defeats so they'll probably finish below Fulham on goal difference.
12. West Bromwich Albion 45 points: Romelu Lukaku won't be around this time, so they could suffer a drop-off in goals scored but overall they defend pretty well, and will stay out of the relegation scrap. That being said the last two years they were mathematically assured of survival, they basically coasted to the end of the season.  
13. West Ham 44 points:  Sam Allardyce divides opinion. Some people can't stand his emphasis on long balls and physical play, while others are just happy that it works and keeps them up.  As with a lot of his previous teams he can get a couple decent signings to keep them in the Premier League but the impact wears off.  Signing Andy Carroll suits their style of play.
14. Cardiff City 42 points:  They stormed their way through the Championship, made some okay signings, certainly more than their competitors, and from what I've seen they play decent football. It may take a while to reach the magic 40 point mark, but I think they'll reach it.  Probably the most likely of the newly promoted sides to survive.
15. Aston Villa 41 points: Keeping Christian Benteke was a huge plus for Paul Lambert's young side. Lambert's unafraid to play young players and while they suffered some thrashings midway through the season, they played well towards the end of the season.  They may struggle for a bit, but should secure safety by early April.
16. Sunderland 40 points: While Paulo di Canio gave Sunderland the boost they needed towards the end, he seems most likely to suffer from second-season syndrome, despite the signings he's made.  Sunderland had a pretty poor disciplinary record too, Altidore may have a point to prove as he struggled in England when he played for Hull City, and Giaccherini might impress
17. Newcastle United 38 points: This club is in a huge mess, ranging from issues such as internal power struggles, a sporting director who can't pronounce his own players' names and is so deluded with his own managerial success, Papiss Cisse's refusal to wear the Wonga logo, etc.  They probably won't go down, but it's definitely not a situation you want to be in.
18. Stoke City 34 points (R): Mark Hughes may be a great interviewer considering how many jobs he's left or been sacked from, but the pressure will be on him immediately.
19. Crystal Palace 29 points (R):  Unless they get a couple players back from loan, they probably won't stay up.  Too many Championship players on their belt, not enough players reinvested in.  
20. Hull City 26 points (R): Sorry, Hull City Tigers that is.  Still have a team largely built with championship players, and Steve Bruce has yet to make any improvements.     

Premier League preseason favorites 1-10

2013-14 Premier League projected rankings and points earned.  Based on current squads, subject to change if players come and go.

Expect games between the top 3 to be very cagey, but also very decisive for who wins the title this season.

1. Chelsea 88 points:  I'm not just saying this because Mourinho's come back, although his previous accomplishments in the Premier League and his more attack-minded players certainly help.  They have continued to stockpile No. 10's and attacking midfielders, and they'll keep Romelu Lukaku who can offer them a more consistent striking option despite his youth.  The Ba/Torres tradeoff (clinical goalscoring vs. fluidity) can be avoided in big games. They have minor weaknesses, such as a lack of a defensive midfielder, but that might hurt them more in the Champions League.    
2. Manchester City 82 points:  Navas adds attacking width which City sorely lacked last season, and Jovetic + Negredo gives them 4 strong strikers.  While the amount of money they've spent is once again really high, they have done enough to go above United, but Manuel Pellegrini is in his first year with the team and the Premier League for that matter so he may have his own learning curve dealing with consistent compact defending and a lack of pressing.   
3. Manchester United 78 points:  David Moyes has inherited an already good team, considering how easily they won the title.  The problem though, is that the teams around them have improved more and United have not.  Despite the rumors,I'm pretty sure Wayne Rooney will stay and have a good year as he tends to, during the year before a major international tournament. Squad depth will help them only so much and a difficult start to the season may make it difficult to establish early momentum.
4. Tottenham 73 points:  They've spent a lot of money this summer in an attempt to keep Bale satisfied and it looks like Champions League or bust.  Luckily for them Arsenal haven't improved enough.  Very good starting XI, but they lack the squad depth to mount a title challenge.  AVB will likely move to his favored 4-3-3 with Paulinho and Dembele providing energetic runs from midfield.    
5. Arsenal 69 points:  Arsene Wenger usually gets the best out of his squad, but they usually take a while to hit top form.  They recorded just 1 win against teams who finished in the top 5 and that was against Spurs.  This time they may not be so lucky.  Getting a clinical striker could make the difference.
6. Liverpool  60 points: Brendan Rodgers may have added some more strikers, perhaps as insurance for Suarez, but his tactics are a bit bizarre for what he's trying to accomplish.  He likes passing and playing out of the back, but he doesn't buy mobile defenders, nor does he play a pressing game.  Big reason why they struggled against teams in the top 5, only 1 win out of 10 games. 
7. Swansea 55 points:  Laudrup found a good balance between ball retention and penetrative passing.  Very impressive finish last season and they've added smartly to the squad.  Europa League games could test squad depth if they qualify.
8. Everton 52 points: They've also got a new manager in Roberto Martinez, who will favor keeping the ball on the ground.  What may hurt them is the lack of personnel to play Martinez's way.  Still, enough talent to finish comfortably in the middle of the table. 
9. Southampton 50 points: Mauricio Pochettino is a Bielsa-esque type manager, who will get his team to press energetically and take lots of shots.  They managed to add Victor Wanyama, who was Celtic's standout player in the Champions League.  While it's tempting to say new-manager syndrome will wear off, I think Pochettino will continue to impress.  
10. Fulham 45 points:  Adding Martin Stekelenburg was a good move.  He's an experienced keeper and a good replacement for the aging Mark Schwarzer.  They tend to stop caring once they hit the 40 point mark.  Not very impressive tactically but enough experienced players to keep them out of relegation scraps.

Economics and morality of price discrimination in college tuition Part 2

...Continued from the first post
Survive or die.  Capitalism wins the day
Seems harsh, but this happens in all markets, and educated labor markets are no different: employers will only look to hire and use however much they need.  Similarly, if products fail to adapt with the times, then they must either adapt or be forgotten.  In this case, a couple of majors may not survive if they continue to be priced the same way as in-demand degrees.  This creates educational arbitrage and universities do not have to take responsibility for it since they are the only institutions that offer creditable degree programs. And thus we have huge market gaps.

One example is fields or majors that are overpopulated with qualified individuals.  If there's a shortage, like there is with programmers and engineers, then wages are going to be attractive and there will be plenty of opportunities available to those who are willing to brave the choppy waters of said fields.  However if there's an overage of qualified people in certain fields, such as in law or psychology, then there will naturally be fewer jobs available for the wages they would want.  Although there would be pressure on employers to drive down wages, they can't because education costs are high enough as is and graduates want to be compensated adequately for the heavy investments they make.

Wait, What if we....
Do away with college altogether?  It's gotta be a scam right?  All joking aside, there should be a more tangible solution.  Markets may dictate availability and wages of jobs given the demand, but universities' collective role in producing the next generation of professionals can and should be altered.  If universities treat all majors the same and charge a flat rate, they aren't maximizing their return on investment for each student in the long run.   Eventually students and future applicants will opt to apply for the more profitable degree programs and when those get overpopulated, they get turned away and take their talents into other fields away from universities.  Instead of settling for underemployment after college, they'll cut out the middle man and maximize their earnings potential without debt even if it is lower than what they hoped for.  It's a dark reality but also a possible one.
 
Universities argue that they address these disparities via financial aid and wealthy donors;  however, this strategy is inefficient because it depends on factors largely outside of most students' control (parental income, tax returns, government's willingness to fund, private sector's willingness to fund, etc.).  Most of the time, the aid students receive is akin to a loan albeit at a higher interest rate either collecting interest during school or after graduation.  In the long run, universities won't maximize their investments because they will have to do away with some of their art institutes, lose some donor funding, and see a huge flock of people being turned away because there will be too much demand for their top profiting degree programs.

So why not charge different prices for different majors? An art history major will likely not make as much as a programmer anyway, so why are they charged as though they will? This is more in line with rational investment decisions because a person who realizes that his returns on investment are the same percentage no matter what route he chooses, will opt for the one he likes the most as opposed to simply the one that makes more money.

I've mentioned return on investment a lot, but how would a university set up a price discriminating system to eliminate "educational arbitrage" and maximize their future earnings from students.  I'm not sorry about using math.

• Evaluate the mean annual starting salary for graduates from the university for every major.  I_philosophy = 30,000  I_civ.eng. = 70,000.  Numbers are hypothetical
• Evaluate the unemployment rate for each major.  Subtract this value from 1 and multiply that number by the mean salary of graduates.  u_phil =.2.  E(I_phil.) = (1-u)*I =24,000.  u_mech.eng. = .05.  E(I_civ.eng) = (1-u)*I_civ.eng = 66500.
• Multiply this expected value by some coefficient correlated with the relative rankings of the university and a discounted value of future education required.  For instance a philosophy major or a law major needs more school to get a job so the university should factor that in and create a pricing scheme.

This method is far from perfect but merely a sample of how one would go about price discriminated based on earnings potential. There are other factors associated with this which I have probably not thought about or addressed.

But why should we conform to them? We hold all the information.   
There are some ethical questions behind this.  As I pointed out earlier, universities could easily fall behind the 'we're a learning institution, not responsible for the salaries and job prospects of our students' tag. After all universities have their own interests to protect whether it's maintaining buildings, hiring top quality professors, offering tenure, or attracting generations of applicants or future donors, and protecting their prestige.  What goes on in the corporate world shouldn't bother them because they don't offer half of those things. That too, universities would even argue that they are more valuable than corporations because they're the intermediate step between young adulthood and adulthood.

There are several ethical concerns about how much higher education should be determined by what's popular in the private market since often times their interests are at odds with each other. But my argument is that from an economical point of view, universities should offer variable rates on their tuition fees based on earnings potential from the majors students choose.  Not only does this allow students to make a more informed decision on following their passion but it also gives them more liability.  Survive or die isn't going to be thrust open them, but rather presented to them so they can make a rational choice.  

Economics and morality of price discrimination in college tuition

It seems that every other day, we see a story of recent college graduates being overwhelmed by massive student loans and limited job prospects.  As a result we see plenty of critics decrying both the universities and the graduates from them for some of the following reasons. This is not an exhaustive list. 

1.) Education itself hasn't changed, but the price has skyrocketed.  

2.) Students have unrealistic expectations of what  4 year college programs will do for them and don't prepare themselves for the practicalities of the job market. (I was told I would learn to make cookies)

3.) They don't choose practical degrees or there are too many people majoring in one or two fields (Capitalism: survive or die, love it or leave it #'Merica).

But that can't be the full extent of the problem.  Not all job markets are equitable for degrees and not everyone's qualifications guarantee them an equivalent job.  Some degrees require a masters/PhD, MBA, CFA, and others don't need graduate degrees at all.  So we have to find a way to make accurate comparisons between different degrees and find a more market-friendly solution.

It's still the same apples, just twice as expensive.

This begs the question of how is what we're learning today, different from or better than what our parents learned  20-30 years ago?  In some of the more job market friendly degrees such as engineering, computer science, or medicine, we can perhaps understand the economic justification behind higher tuition.  Why?  Because these areas have benefited the most from technological growth between say, 1980-2013.  Capabilities and modernization of tasks in the job market mean roughly equitable increases in salary, without considering inflation.  Naturally a university would think that they would want to see a greater return of investment on educating these future infrastructure developers, doctors, and potential startup creators.  After all, where would these men/women be if it weren't for universities.

The same can't be said for other degrees such as those within humanities.  Despite the intellectual value and critical appreciation one could earn from studying in these fields, often times there isn't a whole lot of tangible growth or difference between what a humanities major learns today as compared to 20-30 years ago.  Because salaries and career opportunities in those fields was high and cost of education was low back then, people saw a satisfyingly high return on investment.  Not as high as some of the more technical majors, but enough to justify their passion in art history.  Now the cost of education has risen, the economy has slumped, people are more tech oriented, and thus opportunities are low.  Same apples from 20 years ago, except they've gone a bit too ripe, and they're twice as expensive

What would you say, you [can] do here?  

There's a memorable scene in Office Space in which an employee struggles to tell the consultants what exactly he does for the company.  Needless to say he gets laid off later on, but sadly this is how a lot of companies see college graduates nowadays:  Smart kids, but not necessarily valuable.

This is a big problem.  Universities have either attempted to absolve themselves of responsibility by hiding behind the tag of 'learning institution' or they have advocated a higher level thinking approach by instituting core requirements.  While students aim to learn there, that's not usually the sole purpose for them to take on $40,000+ in debt.  It's not enough for them to see how the chocolate chip cookie evolved and changed over time, they want to learn how to make it.  Should it be a university's obligation to incorporate practical elements such as how to use Excel, Salesforce, PhotoShop, Java, Python, etc or how to get the most out of that cool internship? Or is that entirely the responsibility of the students to make themselves valuable assets?  The truth, as with a lot of things, lies somewhere in between.  It's hard to gauge what students would need since universities can scarcely predict what a student wants, but it will eventually hurt those universities' future returns on investment if students recognize that these 4 year programs don't meet employer expectations anymore at some basic level.

(Continued, see next post)

  

Is Borussia Dortmund a 'Moneyball' Success story?

In the past 3 seasons, Borussia Dortmund has won the Bundesliga title twice, and has consistently gotten the better of traditional German and European powerhouse that is Bayern Munich.  So to followers of  the Bundesliga and die Borussen, it may not come as a surprise that they will be playing in the Champions League final. But to the casual football fan, Borussia Dortmund is like a lesser-known family restaurant that  has received rave reviews on Yelp, a marked change from the ultra-posh fusion restaurant that everyone is used to raving about.

What makes Dortmund different is that they are an example of financial recovery and a "model for the future" as many English pundits have now come to accept, when not 3 years ago, they were bashing Arsenal for doing something similar.  They reached the Champions League semifinals with a starting 11 that cost £29 million to assemble.  The team they beat, Real Madrid, spent close to £400 million on their team.  And let me be the first to tell you that Real Madrid is no slouch when it comes to European play.  Bayern Munich, Borussia's main title rivals, spent massive sums over the past few years to close the gap on Dortmund, and while it has resulted in an emphatic league title, they have only beaten this Dortmund team once.

So can we say Dortmund is the first successful 'Moneyball' story in European football?  In an era where filthy rich owners can sign anyone at will, exploiting indebted clubs during the process, our inclination is to hail Borussia Dortmund as the financially sound team who has found a way to outfox the "big money" clubs.

On one hand, I think it is incredible that within 8 years, Borussia Dortmund went from near bankruptcy to creating one of the best teams in Europe on a budget like the figures above state.  But on the other hand, they weren't so drastically removed from success because of bankruptcy. They never dropped out of the top flight, meaning they had a roughly constant revenue stream, they just had to settle their debts via loans and restructuring.  When they fell into debt, the club's supporters stepped in and bought shares of the club, paving the way for a new model of club ownership and sustainability.  While this left Borussia Dortmund with less money to spend, they were able to assemble a team through the unique scouting networks the Bundesliga has often had.  According to prominent football finance blogger Swiss Ramble, Borussia Dortmund didn't impact their cash flow significantly by the transfer market .  He also points out that Borussia Dortmund had a higher percentage of commercial revenue, meaning that they still had a lot of marketability and popularity, despite their lowly financial status at the time.

Compare that to the original "Moneyball" situation at the Oakland A's. Granted it's a different sport, but the original idea meant that the A's formed a team by using lesser known but much more valuable metrics such as on-base percentage, number of walks earned, etc.  Borussia Dortmund has done what a lot of German clubs do when it comes to assembling a team:  They had a good group of young academy players, found some players for very reasonable prices, and formed a team greater than the sum of its parts.

These concepts seem very foreign to the Premier League, and many Bundesliga clubs have taken pride in their lower ticket prices, fan-ownership, and exciting football.  But I still wouldn't deem Borussia Dortmund's success as Moneyball.  Is it a very smart and well-managed financial turn-around from a failed IPO?  Absolutely, but when it comes to team building, they weren't coerced into forming a team based around statistics and specialized play.