The GAIN LINE Report #12 July 2015
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Competition Trade Policy vs Cohesion

A significant driver of how cohesion is developed and maintained in a competition is the Trade Policy that the teams need to work under. Most notably there is a different cohesion acquisition dynamic between high trade and low trade competitions. As a general rule trade policies are put in place to restrict and control player movements. There is a natural desire for teams to work to obtain high skilled players and for players to seek out higher remuneration. However, before the modern free-market economy philosophy was adopted, players tended to play for their respect local teams which naturally resulted in low trade competitions.

Low Trade results in high cohesion within a competition. In the 1950s Australian Rugby League tended to be very low trade. Between 1956 and 1966 the St George Dragons won 11 premierships in a row. A feat which is virtually impossible in the modern era. These premierships were reliant on the team staying together over a long period of time. High cohesion, caused by low trade, creates a better quality competition per dollar spent because of the perceived team and player quality. A trait of high cohesion teams is that the players within the team seem better than they actually; a mirage of skill. Teams within high cohesion competition tend to play at capacity and perform within a band season-by-season. If a team makes decisions that significantly reduce cohesion they can fall down the competition very quickly, and take a significant amount of time to rebuild.

High trade competitions result in low cohesionSince the beginning of the English Premier League and the increase in trade from both inside and outside of the EPL, cohesion (as measured by GAIN LINE's TWI metric) has dropped 35%. When Super Rugby started in 1996 the teams were essentially made up of existing provincial teams with the average TWI% in the high 80's. In 2007, when the competition expanded to 14 teams, the average TWI% has dropped to the high 60's. When the competition expanded again in 2011 the average TWI% had dropped again to the high 50's. As trade increase within a competition the cohesion naturally decreases. A trait within high trade, low cohesion competitions is that results can be very volatile both in-season and season-by-season.

Low cohesion within a competition results in the ability for teams to "re-build" faster and for expansion teams to start to win faster (across numerous sports the average first year winning percentage of an expansion team is only 28%). The reason why teams can develop higher performance quicker in a low cohesion competition is counter-intuitive. It is not because skilled players are more easily accessible, it is because it doesn't take as long to develop enough cohesion to become competitive because of the low base cohesion within the competition. To the opposite extreme, expansion teams within high cohesion competitions require a significant time to become competitive. 
The National Football League (NFL) moved to unrestricted free-agency in the 1992.
"The dynasties of old started to crumble during the '90s, and the NFL draft took center stage as a make-or-break moment in each team's future. NFL coaches were tasked with recruiting players just like their peers at the college level"  Michael Schottey, Bleacher Report
NFL Expansion teams pre-1992 Free Agency – First Season
  • 1976: Seattle Seahawks: Won 2 - Lost 12
  • 1976: Tampa Bay Buccaneers: Won 0 - Lost 14
NFL Expansion teams post-1992 Free Agency – First Season
  • 1993: Jacksonville Jaguars: Won 4 - Lost 16
  • 1995: Carolina Panthers: Won 7 - Lost 9
  • 2002: Houston Texans: Won 4 - Lost 12
The Australian Football League (AFL) has gradually moved toward a less fluid player market and is now one of the most regulated sporting leagues in the world. The AFL in one of the highest cohesive competitions globally.
AFL Expansion Clubs 1987 to 1997 First Season – High Trade Player Market:
  • Brisbane Bears: Won 6 – Lost 16
  • West Coast Eagles: Won 11 – Lost 11
  • Adelaide Crows: Won 10 - Lost 12
  • Fremantle Dockers: Won 8 - Lost 14
  • Port Adelaide: Won 10 - Lost 11
AFL Expansion Clubs 2011 to 2012 First Season – Low Trade Player Market:
  • Gold Coast Suns: Won 3 - Lost 19
  • Greater Western Sydney: Won 2 - Lost 20
Even taking into account the expansion of the later teams into non-traditional regions the different is significant.

In the last 10 years the AFL Premiership has been spread across five teams with Hawthorn, Geelong and Sydney winning 3,3 and 2 premierships respectively. During the same time in the NFL 8 different teams have won the Super Bowl with the New York Giants and Pittsburgh Steelers winning twice each.

While the AFL's restrictive trade policies are aimed at creating competitive balance within the competition, they are in actual fact creating a high cohesive competition which intern makes it more difficult for low performing teams the "re-build" or expansions teams to become genuinely competitive.
GAIN LINE's Ben Darwin was a guest on RadioSport in New Zealand. He talks to Daniel McHardy about cohesion theory in sport: The impact of cohesion, how money effects performance, who is getting right and lots more.

Click here to Listen

GAIN LINE is an operations and management consultancy with a unique perspective on success in professional sports. We believe great teams are more than just the sum of their parts; we believe great teams are the product of the linkages and connections within their playing group. As such, we help clubs build these linkages and connections with a view to sustainable, long-term success both on and off the field. As distinct from other firms in the industry, GAIN LINE places a strong focus on data analysis and quantitative research. This means we offer our clients solutions that are grounded in evidence and real-world experience.

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