Hello and welcome to our third installment of the Degenerates Guide to the 2014 Season. This is of course, my never-ending effort to give you an ever-so-slight advantage against the house. In this edition we’ll examine teams that drastically over or under-perform against the spread in a given week and see what happens to them in their next game.
Before we get started, let’s define what we mean by over or under-perform against the spread. Consider a hypothetical game. Team A is favored over Team B by 4 points. With the game tied in the waning minutes, Team A scores a late touchdown, kicks the extra point and wins by seven. With this result, Team A over-performed against the spread by three points, while Team B under-performed by three points. This result is not a dramatic departure from the expected result. The point spread pretty much nailed this game and whether or not you rejoiced in or cursed at the outcome had a great deal to do with randomness or luck. Now, consider a similar game where Team A is favored over Team B by 4 points. In this game, Team A takes an early lead and never looks back, winning by 30 points. In this scenario, Team A over-performed against the spread by 26 points, while Team B under-performed by 26 points. While randomness and luck played a small role in the outcome, its effect was muted thanks to the ease with which Team A dispatched Team B. This is the type of game we will be examining. Do teams that radically over-perform against the spread come crashing back to earth the next week? Do they continue their run of great play? Do teams that drastically under-perform against the spread bounce back the following week? Do they continue their listless play? Or is there performance the following week in either case unpredictable?
In attempting to answer these questions, I looked at each occurrence where a team either under or over-performed against the spread by at least 20 points in the past two regular seasons (2012 and 2013). I only considered games involving two IA opponents. It would seem that for every over-performance there would be a corresponding under-performance so the number of both instances would be the same. Here is why this is not the case. After the game with the over or under-performance, some teams played IAA opponents in their next game. These were not included. In addition, in some cases, after the game with the over or under-performance, some teams did not have a scheduled game (their regular season was over) and others did. Alright, with that housekeeping out of the way, let’s get to analyzing.
In the two year sample, 235 teams over-performed against the spread by at least 20 points and played a follow-up game that met the criteria for inclusion explained above. Those 235 teams combined for an overall record of 121-107-7 Against the Spread (ATS). This is a winning percentage of 53.1% which is slightly above the 52.4% needed to turn a profit. This result is surprising to me. I figured teams that over-performed based on the spread would provide value when betting against them in their next game. If we separate those 235 teams in their next games as favorites or underdogs, we can further isolate an advantage. 157 of the 235 teams were favorites the next week. Those teams posted an ATS mark of 84-67-6 which equates to a winning percentage of 55.6%. Conversely 76 of the 235 teams were underdogs in their next game. Those teams went just 37-38-1 ATS for a winning percentage of 49.3%. Two teams were neither favored or underdogs in their next game (pick ‘em). Neither covered. Hence, my advice is that when teams significantly over-perform against the spread, take a flyer on them in their next game if they are favored. Otherwise, stay away.
Now let’s look at the teams that under-performed against the spread by at least 20 points. 224 teams under-performed against the spread by at least 20 points and played a follow-up game that met the criteria for inclusion explained above. Those 224 teams combined for an overall record of 97-123-4 ATS. This is a winning percentage of just 44.1%. Once again, the results are surprising to me. I figured drastically under-performing against the spread would make these teams under-valued and a solid play the next week. Ah, but facts occasionally make fools of us all. Can we find more advantages if we break these down by favorites and underdogs? Glad you asked. The answer is a resounding ‘Yes’. When these teams that under-perform against the spread are favored in their next game (as was the case 88 times in the past two seasons), they managed just a 32-56 ATS mark. This winning percentage of 36.4% means going against these teams when they are favorites has typically been a great idea. However, when they are underdogs, the advantages disappear. 136 of the 224 teams were underdogs in their next game. These teams posted an ATS mark of 65-67-4 which equates to a winning percentage of 49.2%. These teams provide no value in betting either for or against them.
So, to sum things up: When teams drastically over-perform against the spread, they are a good play in their next game if they are favored. When teams radically under-perform against the spread, betting against them in their next game is a great idea if they are a favorite. If a team does not fit either of these criteria, take a pass on them, unless you enjoy coin flips.