09-25-2005, 10:31 AM
I have a friend that wants to buy USC at 47 on tradesports to win the BCS championship. For those of you who don't know tradesports, what he's saying in that bet is that he believes the odds of them winning it all are higher than 47%. I disagree with him, and I wanted to see what you guys thought. At first glance, you may look at that number like he did and think that's a lock, but when you look at all the component factors and really assess the odds, it seems overvalued to me. Here is my thinking:
if usc loses one of their 3 remaining reg season "tough games"... (at ASU, at ND, and at Cal Bears), they can still win the championship obviously. if they lose 2 of those, they're all but done. And this is assuming they win all the other regular season games, which admittedly is a fair assumption but not a lock.
In any event, you have 3 tough road games against good ranked teams there plus a tough bowl game at the end of the year.
That's four tough games. They need to win 3 of them to have a chance at winning the championship, right? In fact, they probably have to win that last bowl game to win the championship, regardless of whether they lose a game or not in the regular season. So let's just look at those 3 tough remaining road games in the regular season for now.
Based on right now, what would the line be on, say, USC at Notre Dame right now? Maybe USC by 7.5 or 8? Would it be fair to assume that the average line in each of those 4 games might be USC by 10? They're all road games against legit top 25 teams. Road games in college give a bigger discount on favorites than they do in the pros. Look at how FSU was only spotting BC 2 points last week. I can't see the trojans averaging much more than a 10 point advantage in the betting lines. A touchdown is usually a 2-1 money line roughly. Let's say the average line is 10, and so we'll assume USC is an average of 80% to win each of those 3 regular season tough road games. That is fair, right? Those aren't gimme games.
So based on that estimate, the odds of them winning all 3 of those games are 0.8 x 0.8 x 0.8 =0.512. So basically they're even money to run the table in those 3 games. Fine.
Now you have to factor in the possibility of them blowing one of their other remaining reg season games:
arizona
at wash
wash st.
stanford
fresno state
UCLA (a top 25 team)
Can we assume they have about a 93% chance of winning in each of those games? UCLA almost beat them last year and should have. Anything can happen. 93% is pretty fair. If we agree to that, that means their odds of winning all 6 are about 65%. so over a 1 in 3 shot at blowing one of those games.
Then we have whoever they get in the championship bowl game (assuming they get there). Good chance it will be the second best team in the country, right? So their odds in that game might be 80% (like those other tough games). Remember, a touchdown favorite is usually about 66% to win. So you have maybe a 1 in 5 chance of them losing that final game.
Now you have to look at the possibility of either Leinart, Bush, or any other key player of combination of players getting hurt. In a contact sport like football, injuries are not only a possibility but a reality. You have to factor that into the cost of buying USC to win the championship, and it's an important and real factor. Every football team has to deal with injuries. Often it's to replaceable linemen and special teams types, but it can just as easily be one of your studs. Just because it didn't happen last year doesn't mean it cant happen this year.
Am I saying they dont have a much better chance than any one team of winning? Of course not. Am I saying they're not a great football team? Of course not.
I just don't see how, given all these possibilities for problems, you can conclude after the 3rd game that they're basically even money to win the championship. You have a lot of obstacles to overcome to reach that (namely the possibility of injuries and getting upset more than once).
If i had to take a side on this trade, I'd be inclined to sell them at even money, not buy them. If you're long, you need virtually everything to go perfectly. All I need is one or two of a long list of potential problems to occur. The owners of those contracts are the ones sweating, not the shorts. If you sell those contracts, you're betting that any one or two out of a long list of potential low-odds problems comes to fruition. When you have 15-25 potential things that can go wrong, each of which has maybe anywhere from a 2-20% chance of actually happening, and you can only survive one at most happening, you should be getting more than even money on your wager. Right or wrong?
If you want to bet on them winning the championship, that is fine, but i can almost be certain that there are better value ways to get to that than basically only getting even money on that now. You'd be better off taking a nominal amount of money and betting it every week on USC on the money line and compounding it, wouldn't you? You'd only need to bet it on the tough games. Why even bother risking a huge amount to win tiny on those easy games? That's like bending over the train tracks to pick up a penny.
If you sold those contracts, you could hedge (and probably lock in a free option) by making a series of bets ON USC after the fact.
What are your thoughts?
if usc loses one of their 3 remaining reg season "tough games"... (at ASU, at ND, and at Cal Bears), they can still win the championship obviously. if they lose 2 of those, they're all but done. And this is assuming they win all the other regular season games, which admittedly is a fair assumption but not a lock.
In any event, you have 3 tough road games against good ranked teams there plus a tough bowl game at the end of the year.
That's four tough games. They need to win 3 of them to have a chance at winning the championship, right? In fact, they probably have to win that last bowl game to win the championship, regardless of whether they lose a game or not in the regular season. So let's just look at those 3 tough remaining road games in the regular season for now.
Based on right now, what would the line be on, say, USC at Notre Dame right now? Maybe USC by 7.5 or 8? Would it be fair to assume that the average line in each of those 4 games might be USC by 10? They're all road games against legit top 25 teams. Road games in college give a bigger discount on favorites than they do in the pros. Look at how FSU was only spotting BC 2 points last week. I can't see the trojans averaging much more than a 10 point advantage in the betting lines. A touchdown is usually a 2-1 money line roughly. Let's say the average line is 10, and so we'll assume USC is an average of 80% to win each of those 3 regular season tough road games. That is fair, right? Those aren't gimme games.
So based on that estimate, the odds of them winning all 3 of those games are 0.8 x 0.8 x 0.8 =0.512. So basically they're even money to run the table in those 3 games. Fine.
Now you have to factor in the possibility of them blowing one of their other remaining reg season games:
arizona
at wash
wash st.
stanford
fresno state
UCLA (a top 25 team)
Can we assume they have about a 93% chance of winning in each of those games? UCLA almost beat them last year and should have. Anything can happen. 93% is pretty fair. If we agree to that, that means their odds of winning all 6 are about 65%. so over a 1 in 3 shot at blowing one of those games.
Then we have whoever they get in the championship bowl game (assuming they get there). Good chance it will be the second best team in the country, right? So their odds in that game might be 80% (like those other tough games). Remember, a touchdown favorite is usually about 66% to win. So you have maybe a 1 in 5 chance of them losing that final game.
Now you have to look at the possibility of either Leinart, Bush, or any other key player of combination of players getting hurt. In a contact sport like football, injuries are not only a possibility but a reality. You have to factor that into the cost of buying USC to win the championship, and it's an important and real factor. Every football team has to deal with injuries. Often it's to replaceable linemen and special teams types, but it can just as easily be one of your studs. Just because it didn't happen last year doesn't mean it cant happen this year.
Am I saying they dont have a much better chance than any one team of winning? Of course not. Am I saying they're not a great football team? Of course not.
I just don't see how, given all these possibilities for problems, you can conclude after the 3rd game that they're basically even money to win the championship. You have a lot of obstacles to overcome to reach that (namely the possibility of injuries and getting upset more than once).
If i had to take a side on this trade, I'd be inclined to sell them at even money, not buy them. If you're long, you need virtually everything to go perfectly. All I need is one or two of a long list of potential problems to occur. The owners of those contracts are the ones sweating, not the shorts. If you sell those contracts, you're betting that any one or two out of a long list of potential low-odds problems comes to fruition. When you have 15-25 potential things that can go wrong, each of which has maybe anywhere from a 2-20% chance of actually happening, and you can only survive one at most happening, you should be getting more than even money on your wager. Right or wrong?
If you want to bet on them winning the championship, that is fine, but i can almost be certain that there are better value ways to get to that than basically only getting even money on that now. You'd be better off taking a nominal amount of money and betting it every week on USC on the money line and compounding it, wouldn't you? You'd only need to bet it on the tough games. Why even bother risking a huge amount to win tiny on those easy games? That's like bending over the train tracks to pick up a penny.
If you sold those contracts, you could hedge (and probably lock in a free option) by making a series of bets ON USC after the fact.
What are your thoughts?