Category: sport

How computers have changed chess

Prior to computers, limited depth of analysis meant chess strategies were “calibrated to model”. Now they’re calibrated to actual results and that results in better strategies (unconstrained by aesthetics)

With the chess Candidates tournament starting in Moscow today (to decide World Champion Magnus Carlsen’s next challenger), I’ve been watching a few chess videos of late, and participating in discussions on why Anand has been finding it hard to play of late.

One thing that people have widely agreed is that computers have changed the way chess is played, and the “new generation” (Carlsen, Hikaru Nakamura, Fabiano Caruana, Anish Giri, etc.) have learnt the game in a completely different way from the old-timers, which dictates the way they play.

For example, these new guys play the kind of positions that earlier generations wouldn’t dream of playing. Given a position and a bunch of moves that seem similarly strong, the moves the new generation picks is different from what an older player would pick. And computer analysis is credited with this.

The basic advantage with computer analysis is that positions can now be evaluated easily to a much larger “depth” (number of moves from current position) compared to earlier manual analysis. In the manual analysis, you could evaluate the position for a few moves after which you would reach a position that you would judge manually. Judging different possible continuations this way, you would evaluate a position and figure what was a good continuation.

The problem with limited depth search was that after a certain depth, you simply had to use your judgment on what was a good position, and this judgment (the “boundary condition” that went into your model) would have a profound effect on how you evaluated different moves. Over time, all you cared about was the aesthetics of the chessboard, and not really how you could translate the position to victory (or a draw).

In other words, in the days before computers, chess players were building their strategies by calibrating them to a model rather than by calibrating them to actual results on the board. And this resulted in a bias towards “pretty strategies” and those that gave advantages that were obvious.

With computers, however, there is no such constraint on the depth of ply. You can analyse the position to far greater depth and get really close to the result in the course of your analysis. And so you don’t really care about the aesthetics of the positions you reach, as long as you know how they can translate to the result you want.

So the “new generation”, which has always been trained using computers, see the game differently. People of Anand’s generation (there’s also Veselin Topalov and Levon Aronian in the ongoing Candidates tournament) learnt the game with classic aesthetics and optimise their play to get there. Carlsen’s generation has no such biases and they play to what is the actual advantage irrespective of aesthetics.

And that’s how the battle is building up! This should be an interesting tournament!

Evolution of strategy in sports

Yesterday ended with a bedtime argument about the merits of basketball player Stephen Curry. It was a bit of a weird discussion, because the wife hadn’t heard of Curry before the discussion started, and neither of us watches the NBA (I get put off by the random ad-breaks, also known as time outs).

I happened to be reading this piece by David Henderson, and asked the wife (who had represented her college in basketball) if she knew about Curry. When she replied in the negative, I showed her this montage of his 3-pointers and how that has made him controversial in the basketball community.

https://www.youtube.com/watch?v=CVtLgRE6NPo

The wife, having greater domain knowledge (having played the game competitively) defended Curry’s critics, saying that his tactic of shooting threes had “killed the game” and made it more boring. “Basketball is a team game, and it is about penetration through passing. Three pointers is a last-ditch measure”, she said, “and Curry, by directly shooting threes, is killing the game”.

I disagreed, arguing from a game theory perspective. Every team will try to gain the maximum advantage based on the current set of rules, I argued, and that it was up to the opposition to find a response to this new way of play. While the Golden State Warriors’ three-point based play might be boring, I argued, it was effective, and being a new strategy it made the game more interesting.

She made arguments about the spirit of the game and how football would become boring and be ruined if, say, someone could shoot with high accuracy from his own goal area to the opposite goal. I responded that opponents would adapt to this, soon rendering this strategy irrelevant, and wondered why no one had figured a way yet to stop the Warriors.

I took the example of the Age of Empires, where each civilisation has a special force, and you need to adapt your strategy to that while playing against this civilisation. I pointed out about how when Stoke City came to the Premier League in 2008, they flummoxed opponents by use of their special force of “longthrowman” (also known as Rory Delap), but soon opponents adapted their strategy sufficiently to neutralise his throws.

This got me wondering whether strategy in basketball has evolved too homogeneously over time (again I must mention I hardly watch the game) – the five point zonal defence and attack, ball handling at the top, rebounds, dunks and so on – that when faced with a new strategy of using quick three-pointers, teams have struggled to react.

I was reminded of this Malcolm Gladwell piece on current Sacramento Kings owner Vivek Ranadive leading his daughter’s basketball team to success based on the “full court press” strategy which was then hardly used.

It got me thinking about football, with its diversity of playing styles (admittedly, it’s played in a larger number of countries, on a bigger court and with more players, giving more room for diverse strategies), where a team might be able to achieve short-term results with an innovative strategy or formation, but opponents soon learn to neutralise them.

Is it that basketball, dominated by a handful of teams (note that the NBA has a small number of teams and no concept of promotion and relegation unlike European leagues), hasn’t evolved diversely enough to react quickly enough to new strategies? And this is not the first time that basketball has reacted in a hostile fashion to a new strategy that is well within the rules – as this podcast on the evolution of basketball strategy explains, the NCAA (and also the NBA) actually outlawed the dunk after its effective use by Karim Abdul Jabbar.

The Yin and Yang of Basketball

The way I see it, Stephen Curry’s critics describing his and the Warriors’ tactics as unfair are no different from English footballers who described Scotland’s passing game as unfair (England was used to a dribbling-only no-passing style of football till then) after the first meeting of the two nations in 1872.

Revenue management at Liverpool Football Club

Liverpool Football Club, of which I’ve been a fan for nearly eleven years now, is in the midst of a storm with fans protesting against high ticket prices. The butt of the fans’ ire has been the new £77 ticket that will be introduced next season. Though there will be few tickets that will be sold at that price, the existence of the price point has been enough to provoke the fans, many of whom walked out in the 77th minute of the home draw against Sunderland last weekend.

For a stadium that routinely sells out its tickets, an increase in ticket prices should be a no-brainer – it is poor revenue management if either people are scrambling for tickets or if there are empty seats. The problem here has been the way the price increase has been handled and communicated to the fans, and also what the club is optimising for.

At the outset, it must be understood that from a pure watching point of view, being in a stadium is inferior to being in front of a television. In the latter case, you not only have the best view of the action at all points in time, but also replays of important events and (occasionally) expert commentary to help you understand the game. From this point of view, the reason people want to watch a game at the ground is for reasons other than just watching – to put it simply, they go for “the experience”.

Now the thing with stadium experience is that it is a function of the other people at the stadium. In other words, it displays network effects – your experience at the stadium is a function of who else is in the stadium along with you.

This can be complex to model – for this could involve modelling every possible interaction between every pair of spectators at the ground. For example, if your sworn nemesis is at the ground a few seats away from you, you are unlikely to enjoy the game much.

However, given the rather large number of spectators, these individual interactions can be ignored, and only aggregate interactions considered. In other words, we can look at the interaction term between each spectator (who wants to watch the game at the ground) and the “rest of the crowd” (we assume idiosyncrasies like your sworn enemy’s presence as getting averaged out).

Now we have different ways in which a particular spectator can influence the rest of the crowd – in the most trivial case, he just quietly takes his seat, watches the game and leaves without uttering a word, in which case he adds zero value. In another case, he could be a hooligan and be a pain to everyone around him, adding negative value. A third spectator could be a possible cheerleader getting people around him to contribute positively, organising Mexican waves and generally keeping everyone entertained. There can be several other such categories.

The question is what the stadium is aiming to optimise for – the trivial case would be to optimise for revenue from a particular game, but that might come at the cost of stadium “atmosphere”. Stadium atmosphere is important not only to galvanise the team but also to enthuse spectators and get them to want to come for the next game, too. These two objectives (revenue and atmosphere) are never perfectly correlated (in fact their correlation might be negative), and the challenge for the club is to price in a way that the chosen linear combination of these objectives is maximised.

Fundamental principles of pricing in two-sided markets (here it’s a multisided market) say that the price to be charged to a participant should be a negative function of the value he adds to the rest of the event (to the “rest of the crowd” in this case).

A spectator who adds value to the crowd by this metric should be given a discount, while one who subtracts value (by either being a hooligan or a prude) should be charged a premium. The challenge here is that it may not be possible to discriminate at the spectator level – other proxies might have to be used for price discrimination.

One way to do this could be to model the value added by a spectator class as a function of the historic revenues from that class – with some clever modelling it might be possible to come up with credible values for this one, and then taking this value into account while adjusting the prices.

Coming back to Liverpool, the problem seems to be that the ticket price increase (no doubt given by an intention to further maximise revenue takings) has badly hit fans who were otherwise adding positive value to the stadium atmosphere. With such fans potentially getting priced out (in favour of fans who are willing to pay more, but not necessarily adding as much value to the ground), they are trying to send a message to the club that their value (toward the stadium atmosphere) is being underestimated, and thus they need greater discounts. The stadium walkouts are a vehicle to get across this point.

Maximising for per-game revenue need not be sustainable in the long term – an element of “atmosphere” has to be added, too. It seems like the current worthies at Liverpool Football Club have failed to take this into account, resulting in the current unsavoury negotiations.

Now that I’ve moved to Barcelona, Liverpool FC need not look too far – I’ve done a fair bit of work on pricing and revenue management, and on two-sided markets, and can help them understand and analyse the kind of value added by different kinds of spectators, and how this can translate to actual revenues and atmosphere. So go ahead and hire me!

Watching the Clasico in a bar

No, this post doesn’t have to do with the current El Clasico between Real Madrid and FC Barcelona. When I’d watched the previous Clasico on March 22nd I’d formed a blog post in my head but I never got down to writing it (combination of travel and NED and enjoying my holiday) so I thought this is a good time to put it down.

On that occasion I was in Barcelona and briefly toyed with the idea of going to watch the game at the Camp Nou. That idea was quickly shelved given that tickets were going for about €500 each. Then there was hope that the game would be telecast on local TV (like the Barcelona-Ajax game I had watched at the Camp Nou was), but that wasn’t to be. The only option was to watch it at a pub.

While there were several bouts of NED due to which I had decided I won’t see that game, when Maxime, my wife’s flatmate, went out, I couldn’t help but join him. The first task was to find a suitable pub, especially given that it was a Sunday.

There is an interesting hierarchy of local businesses in Barcelona. Most Spanish-run supermarkets, for example, are closed on that day, though the Pakistani-run places (which are interestingly plentiful in the city) are open 24×7. A large number of Spanish-run bars are closed on Sundays, too, while the Chinese bars (again plentiful) are open all day.

Given that it was the Clasico and it was not broadcast on terrestrial television, there was no surprise that bars were full. Seating-only bars were thus out of question. And some of the standing-allowed places were choc-a-bloc. Finally it was this Chinese bar near the Entença station that Maxime and I went to.

The place was full, like most other bars in Barcelona that night, but there was some standing room with a view of one of the televisions. A sign at the entrance greeted us saying that each person was expected to order at least one beer for €2 (normal price for a beer in such a bar is €1,80). Estrella thus Dammed, it was time for the game.

I don’t remember much of that game, but the atmosphere in the bar was far from the kind I’d seen elsewhere. The crowd was partisan, of course, with anyone who wanted to support Real Madrid doing so silently (remember that this is a politically charged fixture, especially given renewed calls for Catalan secession). Loud cheers accompanied the Barcelona goals. The Madrid goal was met with silence, as you might expect (and people stepping out for a smoke). People stepping in and out created another problem – it was a rather cold spring evening, and every time the door opened it let in rather cold wind and disturbed the thermal balance of the bar!

There were a couple of other noteworthy sidelines on the evening. The first was how hard the bar staff worked. Expecting it to be a big night, they had pressed in extra staff, with possibly the entire family of the people who ran the bar involved. Children who looked as young as ten or twelve hurriedly ferried dishes from the kitchen to the tables (there were a few tables, which I’m assuming were pre-booked). Service was overall top notch, with our €2 beers arriving within two minutes despite the massive crowd at the bar. Considering that some bars were shut (given it was a Sunday), it was incredible how hard this one worked to make most of a good Barcelona night.

 

And then there were these guys at the slot machines. Like most other cheap bars in Europe, this one too had a couple of slot machines and they were all occupied, by people who couldn’t care less about what was going on around them, and whose only worry in life was to bet against the house. It could have been yet another night at the bar for them, except that the beer cost them twenty cents extra.

PS: I got distracted by the Manchester City – Liverpool game and hence took much longer to finish this post. I started writing it as soon as El Clasico started.

The many spectacles of Jurgen Klopp

I haven’t been a big fan of my last  two pairs of spectacles. The last one, especially, was chosen carefully after a rather long search across several stores. Yet, within a week or two of purchase, I knew it wasn’t a great choice. Somehow it didn’t look as good on me as I imagined it would. And it’s been hardly four months since I bought it, but I’m already looking for a new pair.

While there are several people whose spectacle frames I’ve much admired, no one comes close to new Liverpool F.C. manager Jurgen Klopp. Not realising that he has several pairs of spectacles, I’ve tweeted on many occasions that I want “Jurgen Klopp spectacle frames”. And then somehow forgotten it when at the optician’s.

With Klopp scheduled to be unveiled as the new Liverpool F.C. manager today (he signed his contract yesterday), the Guardian has put out a nice graphic called “the many faces of Jurgen Klopp”. As far as I’m concerned, though, I don’t care about the faces at all. All I care about are the spectacles! Each one better than the other.

So I present to you, “the many spectacles of Jurgen Klopp”. Watch off!

And while at it, tell me where I can procure such spectacle frames – most stores in Bangalore don’t stock good big matte-finished frames. And don’t tell me LensKart or some such online seller – buying a pair of spectacles is like buying a pair of shoes – you need to feel them, try them on and feel comfortable in them before buying.

Super-specialisation in cricket

Cricket has always been a reasonably specialised sport. You are either a batsman or a bowler or a wicketkeeper or an all-rounder. If you’re a bowler, you’re classified based on your bowling arm and the speed at which you bowl and the spin you impart the ball (last two are not independent). If you’re a batsman you’re classified based on your batting stance and whether you’re an opener or a middle-order batsman.

In Test cricket, there’s further specialisation if you’re a middle-order batsman. You have specialist Number Threes, like Rahul Dravid or Ricky Ponting. You have specialist Number Fours, like Sachin Tendulkar or Younis Khan. Five and six are fungible, but a required ability for both these positions is the ability to bat with the tail.

In One Day cricket, too, there’s some degree of specialisation within the middle order but it’s not to the same extent as in Test Cricket. In One Day cricket, batting orders are more flexible and situation-based. You do have specialist threes (Dravid and Ponting again come to mind) and sixes (usually hitters) but the super-specialisation is not as much as in Test Cricket.

A logical extension of this would be that in T20 cricket, which is played over an even shorter duration and where batting orders are even more flexible, you don’t need even as much of specialisation as in ODIs. However, Siddharth Monga argues in this piece that this lack of specialisation is why India isn’t doing as well as it could in T20s (having just lost the home series to South Africa).

In other words, what Monga is arguing is that Kohli, Raina and Sharma are all similar batsmen and effectively Number Threes for their IPL franchises, and when they are arranged 2-4 or 3-5 in the Indian national team, two of them are effectively batting out of position.

It would be interesting if Monga is indeed right and that T20s require a higher degree of specialisation than ODIs. It is also interesting that India’s number 6, MS Dhoni, bats like a typical number 5 in T20s, accumulating for a while before going bonkers. Maybe T20 will end up as a much more specialised sport than Tests? That would be interesting to watch.

What did Brendan in? Priors? The schedule? Or the cups?

So Brendan Rodgers has been sacked as Liverpool manager, after what seems like an indifferent start to the season. The club is in tenth position with 12 points after 8 games, with commentators noting that “at the same stage last season” the club had 13 points from 8 games.

Yet, the notion of “same stage last season” is wrong, as I’d explained in this post I’d written two years back (during Liverpool’s last title chase), since the fixture list changes year on year. As I’ve explained in that post, a better way to compare a club’s performance is to compare its performance this season to corresponding fixtures from last season.

Looking at this season from such a lens (and ignoring games against promoted teams Bournemouth and Norwich), this is what Liverpool’s season so far looks like:

Fixture This season Last season Difference
Stoke away Win Loss +3
Arsenal away Draw Loss +1
West Ham home Loss Win -3
Manchester United Away Loss Loss 0
Aston Villa home Win Loss +3
Everton away Draw Draw 0

In other words, compared to similar fixtures last season, Liverpool is on a +4 (winning two games and drawing one among last season’s losses, and losing one of last season’s wins). In fact, if we look at the fixture schedule, apart from the games against promoted sides (which Liverpool didn’t do wonderfully in, scraping through with an offside goal against Bournemouth and drawing with Norwich), Liverpool have had a pretty tough start to the season in terms of fixtures.

So the question is what led to Brendan Rodgers’ dismissal last night? Surely it can’t be the draw at Everton, for that has become a “standard result” of late? Maybe the fact that Liverpool didn’t win allowed the management to make the announcement last evening, but surely the decision had been made earlier?

The first possibility is that the priors had been stacked against Rodgers. Considering the indifferent performance last season in both the league (except for one brilliant spell) and the cups, and the sacking of Rodgers’ assistants, it’s likely that the benefit of the doubt before the season began was against Rodgers, and only a spectacular performance could have turned it around.

The other possibility is indifferent performances in the cups, with 1-1 home draws against FC Sion and Carlisle United being the absolute low points, in fixtures that one would have expected Liverpool to win easily (albeit with weakened sides). While Liverpool is yet to exit any cup, indifferent performances so far meant that there hasn’t been much improvement in the squad since last season.

Leaving aside a “bad prior” at the beginning of the season and cup performances (no pun intended), there’s no other reason to sack Rodgers. As my analysis above shows, his performance in the league hasn’t been particularly bad in terms of results, with only the defeat to West Ham and possibly the draw to Norwich being bad. If Fenway Sports Group (the owners of Liverpool FC) have indeed sacked Rodgers on his league performance, it simply means that they don’t fully get the “Moneyball” philosophy that they supposedly follow, and could do with some quant consulting.

And if they’re reading this, they should know who to approach for such consulting services!

In appreciation of Dustin Brown

As a kid, I used to watch a fair bit of tennis. This “fair bit” must be qualified, though, since it was limited by what Doordarshan, India’s state broadcaster, would show. So this would typically mean the second weeks of the French Open and Wimbledon (US Open and Australian Open were in “wrong” time zones, and DD seldom telecast non-Slams), and the odd Davis Cup tie.

I don’t remember much of the Davis Cup ties (apart from Leander Paes and Ramesh Krishnan’s run to the semifinals of the Davis Cup one year (where they got roundly thrashed by a Wally Masur-led Australia) ), but some of the French Open and Wimbledon memories still stay, the high point being that I still remember the full scorecard of the 1992 Wimbledon finals when Andre Agassi beat Goran Ivanisevic in an epic 5-setter (6-7 6-4 6-4 1-6 6-4; checksum being that both players won 25 games each).

Over the last decade or so, though, I’ve steadily lost interest in tennis. I surely watched the two European slams (which are telecast in prime time in India) most years during the Sampras era, but remember very little of the Federer-Nadal era. The last Grand Slam final I remember watching was in 2009 when Federer beat Roddick at Wimbledon. That final I remember as one I wasn’t particularly interested in, as I polished off Aakash Chopra’s Beyond the Blues as I watched it.

In the last few years, I’ve tried watching tennis (mostly out of Twitter peer pressure; yes such a thing exists), but have found it very hard. Rallies are way too long. It’s too much of a power game nowadays than one of guile. You get bored watching players hitting it across from baseline to baseline endlessly.

And then there is Rohit Brijnath. This is one journalist most people on my Twitter timeline worship, but I think he has ruined tennis for me. His endless articles about Nadal’s “grit” (which get a page all for themselves in Mint Lounge) have resulted in my over-analysing the playing styles of anyone playing, not able to enjoy the game for what it is. And with endless baseline battles (which I didn’t really mind back in the era of Courier and Agassi and Bruguera) there is not that much to enjoy either!

Living alone has meant that I watch more TV nowadays than I used to earlier (but strictly restricted to live sport), and that has meant that Wimbledon has been the “default background process” during the last few evenings. That hasn’t necessarily meant that I’ve watched much – it’s just a “background process”, except for one game.

I started watching Dustin Brown’s game against Rafael Nadal sometime in the second set simply out of sheer curiosity given the way Brown looks. Noticing that Nadal was a set down, it seemed like it might be an interesting game, but I had my laptop out for good measure. Soon, it became evident that this Brown guy is different, and it wasn’t too long before I was heavily rooting for him.

The way he was playing was refreshingly different. A really big first serve. A quick rush to the net immediately after. Great net play. Innovative shots. And he was erratic as hell. Within a game or two of my switching on, it was certain that this was going to be one of those legendary games.

Nadal is one of those guys who is intelligent and accurate. If you are erratic, he will make sure he will take advantage of you. And advantage of Brown’s errors he took as he wrapped up the second set without much ado. But it was from the third set onwards that it seemed that this wasn’t going to be as straightforward after all.

Brown was erratic for sure, and played some absolutely strange shots (like this double handed shot with the racquet in front of his face), but his playing style surely unsettled Nadal. He simply didn’t let Nadal get into a rhythm, and his frequent rushes to the net meant that Nadal simply wasn’t able to play his usual waiting game where he breaks down the opponent (has anyone written a piece yet drawing parallels between Nadal and Magnus Carlsen?) slowly. This was a kind of opponent one doesn’t come across too often nowadays, and Nadal failed to adapt. By now, I was strongly rooting for Brown.

But life wasn’t easy then, given Brown’s propensity for errors. You would think he had all but wrapped up a game, when he would make an outrageous move and lose the point. And then make up for it a minute later with some spectacular brilliance. It was a brilliant roller-coaster ride, but the best part for me was that after a long time I was watching a brand of tennis I had grown up on!

Watching that game, I was reminded of some of the tennis vocabulary that I had grown up with, and never come across later on. “Passing shot”. “Down the line”. “Cross-court”. The dominant style of tennis nowadays make all these terms moot. And it was exhilarating to be reminded, albeit for one match, of what tennis used to be like a couple of decades back!

There was no surprise in Brown’s loss in the next round to Troicki. His style is too erratic to take him too far, and his ranking around 100 is probably deserved. But he has surely left his mark on the world of tennis, and on me for sure! Kudos to him.

Update

I just came across this other piece I’d once written about Wimbledon, and it’s not funny how much these two posts have in common. I seem to be repeating myself way too much. Maybe I should just retire from blogging.

Testing the counterfactual: footballers eating pizza edition

Five German under-21 footballers, including Liverpool midfielder Emre Çan, went out for pizza before their U-21 European Championship semifinal against Portugal, in which they got walloped 5-0.

https://instagram.com/p/4XTrUxHcHy/embed/captioned/?v=4

Following the wallop, these players have been pilloried for going out before an important knockout game, for not having taken it seriously enough.

To understand whether people are right or not in pillorying these players, and whether the players were wrong in going out for pizza before a game, we need to test the counterfactual (we had done this here once before with Moeen Ali’s wristbands).

What if Germany had won the game against Portugal? Had they won it, would people have still noticed that these players were out on the eve  of the game (it was public information. One of them posted it to Instagram) ? Would players have still been accused of not taking the game seriously enough?

Note that I’m not defending the German players here. I’m only questioning the timing of the attack – on the back of defeat, which to me seems to be a case of correlation (players go out for pizza; lose game) being mistaken for causation (pizza caused loss, approximately).

On Sony Six telecasting Pacquiao-Mayweather

Summarising the blog post:

1. Having paid for the rights to the fight, the incremental cost of showing the fight to a customer is negligible, making this a great case for “revenue management”.
2. Each television market is independent, and in each the holder of the rights indulges in “monopoly pricing”. The monopoly price for the US is $~100. For India, it is close to zero. 
3. Television is a two sided market, and by offering the content at Zero rupees in India, the rights holders are maximising the sum total of what they can earn from viewers (subscription fees) and what they can earn from advertisers. 

Now for the harikathe:

So the much-awaited bout between Manny Pacquiao and Floyd Mayweather is going to be telecast on Sony Six tomorrow, as per this tweet:

Some people are surprised that this fight is being telecast on a “normal” sports channel in India, considering that elsewhere in the world it is being mostly telecast on pay-per-view channels, with the payment for one connection running close to a hundred dollars. Yet, in India, we will get to see this without shelling out any incremental cost over what we have already shelled out to receive Sony Six (and most people who are interested in the fight are likely to have already subscribed to the channel since it telecasts the ongoing IPL. The difference between {people who want to watch Pacquiao-Mayweather} and {people who want to watch IPL} is infinitesimal and can be ignored).

So why is it that a fight that is being sold at an exorbitant premium in most places in the world, and billed as the most sought after boxing bout in over twenty years, is being shown at a throwaway price (close to zero) in India? The answer is simple – revenue management.

For the holder of the telecast rights of this fight, having paid for global telecast rights, any further costs of telecasting to an additional television set are marginal. In that sense, any marginal revenue that they make from the further sale of these rights goes directly to their bottom line. Hence, this is a classic case for “revenue management”, where they will try to maximise the revenues from the rights they hold.

Given that they hold monopoly rights over telecast of the bout, we can expect them to follow “monopoly pricing” to price their product. Monopoly pricing, as the name says, is how a monopoly would price a product, which is literally true in this case. For every price point, there is a certain demand, and monopoly pricing prices the product at a level that maximises revenue (price x quantity). And considering that television rights are usually at a national (or even sub-national) level, monopoly pricing can mean that there are different prices in different markets.

The US, for example, is a market that has an established model of pay-per-view, and the price they’ve arrived at there (of USD 90 per connection, or whatever) is a function of this history. Based on historical responses to such events, and what people have indicated as their willingness to pay, this rate has been arrived, and from what I notice on social media, it has probably been successful in terms of raising revenues.

In a market like India, however, firstly there is no established pay per view model, and no “channels” for exhibitors to show pay per view content (Tata Sky Showcase might be an exception but it’s too niche). Moreover, boxing is also not that big in India – while Indians (like me) might be interested in big fights like this one, it is not as big for us to actually pay money to watch. In that sense, even if the channels had offered this fight at a low (but non-zero) price, the uptake would have been small.

In other words, for an event like this one, the “monopoly price” that the owner of the content could charge in India would be extremely small, and even at that price, the number of people watching would have been small, leading to small revenues.

But then television is a “two-sided market”. The content is simply a platform to bring together the advertiser and the viewer, and the amount that an advertiser will be willing to pay for an advertisement can be considered to be proportional to the viewership. In India, where the volumes for a non-zero price will be low, the price that the broadcaster can command from the advertiser will also be similarly low, leading to low revenues all along.

Instead, by offering the rights to Sony Six, which will offer the content for “free” for all its currently existing viewers, the owners of the rights are ensuring that a significantly positive section of the population is going to watch the fight. Which in turn means that a significant premium can be extracted from advertisers, which will form strictly positive revenues for Sony Six, a part of which will go to the global rights holders. And these revenues are significantly greater than what the rights holders would have achieved in case the content had not been offered at all in India.