Why All Blacks won't win World Cup 2011

What are the odds of the All Blacks not winning the Rugby World Cup this year? As we draw closer to the big day, both, the press and the pundits ramp up their predictions.

Many of the predictions we hear about games and the tournament itself are accompanied by a series of arcane numbers, taking the familiar form of a price, a price just like you would see on a carton of milk at your local corner store.

Amazingly, that price purports to actually indicate the probable outcome of the match or tournament! Who would have thought such a thing possible?

Where do these numbers come from? Who is it that puts out these lists of, in some cases, seeming ordained results?

Is it a small bespectacled man, locked in a back room, painstakingly going over past results, using secret formula to determine the result?

Is it rooms full of state-of-the-art computer servers, cold and calculating, running all permutations of hundreds of factors a million times before emotionlessly deciding your team’s fate?

While any of these options might seem comforting, appealing even, or perhaps appalling, the shocking truth is they just make them up.

That’s right, your national team’s chance of success in bringing the Rugby World Cup home in 2011 has been pulled right out of some bookmaker’s smelly, nether regions and slapped right up there on the interwebs for all to see.

Betting on an event, years into the future, when you cannot possibly know the team makeup or future form is largely guesswork.

A price is thrown out with low limits and the bookies sit back and let the public do their work for them. The price changes due to the weight of money being bet on each outcome.

In the early stages, most of this money is what is called ‘mug money’. It is largely people betting with their heart on their favourite team, regardless of the value that bet delivers or people with little understanding, following what they perceive to be the sure thing.

As the bookies shorten the price, this attracts even more money as the mugs chase a team being backed, into impossible favourites.

This is best demonstrated by the prices on the last Rugby World Cup. The All Blacks were $1.25 favourites, a year out from the event.

What these markets tend to deliver is terrible value on the favourite and terrific value on the likely chances. Look at the market below, if we played this Rugby World Cup 19 times, France would win only once.

According to the odds, France have probably, a one in four chance of making the final, as do England.

Let’s take a look at the current outright market to win the Rugby World Cup 2011 and see just how smelly it is and why exactly it is flat out wrong.

In looking at this, we will assume that the pools throw up no surprises and the knockout stage is reached as expected. We have, in the market:

All Blacks: $1.70
Wallabies: $3.60
Springboks: $9.00
England: $15.00
France: $19.00

Now, this market has been around for years. While creating it, the bookmakers looked at rankings at the time, form and the fact that the tournament is in New Zealand and firmly ensconced the All Blacks as favourites.

That the All Blacks are at home matters, but not as much as you would think. The Wallabies and the Boks were roughly equal second and third at around $5.

As we have neared the actual kickoff and are looking at the most recent results and team selections, the Wallabies have firmed considerably, the All Blacks have drifted out slightly and the Boks have moved way back.

To win the Rugby World Cup after the pool stage, you must win three separate, two-horse races.

In the final, you are facing a team that has progressed and beaten teams just like you have. Ultimately, with our assumption of pool progression in place, what these tournament prices represent is the multiplied value of the head-to-head match price for the quarter-final, semi-final and final.

Multiplied, not added, the odds of winning game one, times the odds of winning game two, times the odds of winning game three.

If we assume you went into each game as an equal chance this would be 2*2*2 = $8.00 or 7 to 1.

Using this process in the last Rugby World Cup market for the All Blacks ($1.25) would mean that they would have to be less than $1.10, or a 90 percent chance of winning each of the three knockout games including the final against the other best side.

A patently ridiculous situation, no side has ever been so dominant.

This time round, the All Blacks likely face Wales, the Boks and then the Wallabies in order.

What would the likely prices for these games be? I would suggest something like; $1.05 versus Pumas, $1.40 versus the Springboks and should they meet the Wallabies in the final perhaps $1.60.

The multiplier of these three games (1.1*1.4*1.65) gives us a ‘To Win the Rugby World Cup’ price of $2.35 or roughly a 40 percent chance of the All Blacks taking home Bill. At best that is, as these prices are probably somewhat generous.

Hardly the absolute lock being touted, the All Blacks chances of winning are less than a coin toss.

Putting it another way, it is therefore most likely that the All Blacks will not win the World Cup. There it is, the harsh reality.