Early elimination for England from Euros 2016 could wipe £6 billion (Dh31.4bn) off the stock market in a single day, a finance expert from London Business School has warned.
Alex Edmans, professor of finance at the London Business School, says the effect of football results on national mood is so strong that it can cause swings of billions of pounds.
“My research shows that a loss in a major football competition can have a profoundly negative effect on investor mood. Share prices are affected not only by fundamentals, but also by emotions. Sports have huge effects on people’s emotions”, explained Edmans.
Edmans and his co-authors, from the University of Colorado and BI Norwegian Business School, investigated the link between 1,100 international football matches and stock returns in 39 countries in the paper Sports Sentiment and Stock Returns.
Their results showed that being eliminated from a regional tournament, such as the Euros, leads to the national market falling by 0.3 per cent the next day.
“When applied to the UK stock market, this translates into a single-day loss of £6 billion”, said Edmans, who alongside his co-authors found no similar effect either way of a win in any sport.
“One reason could be that sports fans are notoriously over-optimistic about their team’s prospects. If fans go into each game expecting they’ll win, there’s little effect if they do win, but they become depressed if they lose. Another is the asymmetry of the competition: winning an elimination game merely sends you into the next round, but losing leads to instant exit.”
Roy Hodgson’s match selection defied conventional logic and, true to form, it was an England performance which ended up a little muddled.
Experimenting with a three-man midfield for the opening game of a tournament you’ve had two years to prepare for was questionable. Especially when two-thirds of that area consisted of a natural defender by trade and your nation’s highest all-time goalscorer.
Admittedly, Eric Dier has been excellent for Tottenham as a defensive midfielder and fully deserved his place in the anchor role, but it still had the air of those age-old square pegs in round holes; a problem which has beset England managers since Sven Goran Eriksson’s reign.
Neither Wayne Rooney, Dier nor Dele Alli – with the latter duo also possessing zero tournament experience – play 4-3-3 at club level, yet were assigned with controlling and dictating a major international.
That all said, for approximately an hour, England were able to manipulate a leggy and limited Russia side, who it should be highlighted had lost their entire first-choice midfield to injury, and looked lost in possession, offering no coherent goalscoring threat.
But Alli grew tired, his minimal influence soon transforming his presence into an irrelevance; Rooney suffered in the new role of having to consistently track back before having to launch counterattacks, a position clearly designed to try and alleviate the distance he had to travel up and down the field; while Dier’s role as water carrier – in the city where Didier Deschamps defined that title more than 25 years ago – was always going to take its toll.
Rooney’s fatigue did lead to the introduction of Jack Wilshere, with the added intention of regaining possession in the middle of the park and there were some nice touches from the Arsenal man, but his match fitness is clearly not there and he offers precious defensive presence.
Hindsight, of course, dictates all of this criticism as for 91 minutes this was a solid tournament-opening win, a little rough around the edges but with flashes of optimism.
International football, though, has a knack of exposing a team and manager’s flaws, and it was becoming glaringly obvious in the 10 minutes before and after Dier’s opener, Hodgson’s midfield experiment was delivering mixed results.
The goal was brilliantly struck but was as unexpected as it was welcome; the 22-year-old having never taken a free-kick in his senior career.
Hodgson’s rejoice must have also been relief. For it also, initially, helped cover up the manager’s second major failing of not turning to his biggest strength away from the starting XI; his attacking options on the bench.
England – as it so came to pass – will not be a side who can defend their way to any success in this tournament. T
heir best attributes lie in the final third and on a night when Alli’s creativity and ability to find precise pockets of space at the end of the penalty area had deserted him, Harry Kane’s radar wasn’t properly calibrated and Raheem Sterling’s underwhelming conclusion to the Premier League season was carried forward, a change was there to be made.
Kane and Alli both completed 90 minutes while Sterling was sacrificed three minutes from the end for James Milner in a defensive move. At least one should have made way much earlier.
From a position of complete dominance, with some of your major attacking weapons misfiring, why were Jamie Vardy or Daniel Sturridge not deployed? A 2-0 lead is a far more manageable scoreline to defend with, in the context of having an inconsistent back-four.
Wales now await in Lens on Thursday and Hodgson may have a different plan, he may stick with the same XI, it’s almost impossible to tell because little of what eventually transpired in Marseille last night offered conclusive evidence of what would be best.
England were left disappointed in Marseille on Saturday night after conceding in stoppage time to allow Russia to share the points from their opening Pool B encounter.
Sport360 rounds-up the best of the post-match reaction from the south of France.
“It’s disappointing because we were so close to a win in our first game. I thought it would have been well deserved. Our emotions went from a high to a low pretty quickly, but we have more games to look forward to and have to pick ourselves up.
“It is one of the best moments I’ve had in football, a fantastic moment, and to celebrate with our fans who were fantastic around the stadium. I would have taken a win, though, with someone else scoring.
“I’ve seen lots of his [David Beckham’s] free-kicks. Ever since I was younger it’s something I’ve enjoyed doing and practised a lot.”
“I have the same emotions as the players. To say we are bitterly disappointed would be an understatement. We were that close to a deserved victory and to lose it with one minute of injury time remaining is a tough pill to swallow, but that happens in football.
When we analyse the game tomorrow there’ll be a lot of things we will want to take forward and hopefully we’ll be able to put the memory of this last-minute goal behind us.
I thought we were good for the first 45 minutes and the last 30 minutes of the second half. We weren’t very good for the first 15 minutes of the second half and allowed them to play too many long balls forward. For 15 minutes we didn’t establish the control we had, but we overcame that and re-established control.”
“It was a good performance, but fair play to Russia because they stayed in the game and got the goal. They stood the ball up, he has springs in his heels and has looped it into the corner.
“It is not tough to take positives, because we played well. We will build on it and get better, win more games.
“There are a lot of positives, and that is what we are going to have to draw on.”
“We played some really good football. We were creating chances for 90 minutes, so we are disappointed because the performance we felt was worthy of three points.
“We knew Russia’s danger was the big man up front, if they were going to get the goal you knew that is where it was going to come. He is a big lad, and is going to win headers at some stage. Unfortunately for us it was in a dangerous position and they got the goal from it.
“We are disappointed we didn’t get three points, but we have to move on. It is one point and there are a lot of positives in the performance.”
My players stuck at it until the end and they rescued a point, which is tricky to do. England dominated the match, but we were still able to contain them and their dangerous forwards.
We were playing against a 4-3-3 or even a diamond system, so we were prepared for those two different tactical alternatives – we were prepared to play against both systems. We focused on their movement.
As for their intensity, we tried to outdo them. That said, England are one of the quickest teams on the planet so I don’t know if we were able to succeed in what I’d planned.”