Odds are there to be broken
The odds of Leicester City winning the English Premier League this year were less likely than Donald Trump winning the Nobel Peace Prize, writes Manager and Actuary at Deloitte, Marc Mer.
We all know actuaries love a good stat. So here’s one for the record books.
Leicester City have just won the English Premier League (soccer) title to complete probably one of the greatest upsets in the HISTORY of sport at a whopping 5000-1 odds. These were the longest odds that some bookies had on their market at the time.
This is more than twice as unlikely as your chances of fatally slipping in the bath or shower (2232-1), and ten times as unlikely as being born with 11 fingers or toes (500-1).
To put this into perspective, at the Rugby World Cup last year the Cherry Blossoms (Japan) beat the mighty Springboks (South Africa), defying odds of 80-1, in what was considered one of the greatest upsets in sporting history at the time.
Here are some other punts you could have taken at the time the EPL started (August 2015) that were MORE LIKELY to happen than Leicester’s triumph:
80-1 – Finding documented evidence of alien life in 2017
100-1 – Donald Trump to win the Noble Peace Prize
100-1 – Kevin Rudd to be the next Labor leader
1000-1 – Robert Mugabe to win the Noble Peace Prize
1000-1 – Hugh Hefner to admit he’s a virgin
2000-1 – Kim Kardashian to become the US president
2000-1 – Elvis Presley showing up alive
2500-1 – Vinnie Jones to win best actor
2500-1 – David Cameron to replace Tim Sherwood as Aston Villa (soccer) manager
The graph below shows how the betting market’s assessment of Leicester City’s title chances changed during the season, and especially as their feat started becoming a real possibility from February.
This is Leicester’s implied probability of winning the league, based on Ladbroke’s match-by-match title odds.
It is truly remarkable how this (relatively) small team from the East Midlands of England, in a league dominated by huge spending and billionaire backers, were able to pull off this feat. The total cost of their squad was £50m. This sounds like a lot of money spent on a bunch of supposedly “average” mere mortals, but it is nearly ten times less than the likes of Manchester United and Manchester City who have near half-a-billion pound squads!
Using the pre-season odds, if Leicester were to play in the Premier League for the next 4999 years, we would not expect them to repeat this feat!
What’s that I hear you say about being able to withstand a 1 in 200 year loss event and still remain solvent? Surely 1 in 200 is so unlikely it will never happen? I intend this article to be more light-heartened than an analysis of Regulatory Capital requirements, but it does make one think…
Nonetheless, it is remarkable for the game, and certainly keeps us statistically-oriented folk on our toes.
Sources: Ladbrokes, Paddy Power, William Hill
CPD: Actuaries Institute Members can claim two CPD points for every hour of reading articles on Actuaries Digital.
