Champions League Draw: Has the market got it wrong?

Champions League / Matthew Walton / 19 December 2009 / Leave a Comment

Should AC Milan be as big as [29.0] to win a competition in which they have an outstanding record?

"A fairytale return to Old Trafford for David Beckham it might be but despite Milan’s domestic inferiority to Inter in the last few seasons, what can’t be dismissed is their European pedigree - runners-up in 2004/05, semi-finalists in 2005/06, winners in 2006/07. "

As the balls came out of the different pots, so the prices on the Betfair Champions League winner market fluctuated before finally settling. "Magical" Matthew Walton wonders whether the current prices are an accurate reflection of the teams' respective chances.

Champions League Draw - Has The Market Got It Wrong?

The knee-jerk reaction to the draw for the first knock-out round of this year's competition has been rather redictable.

With seemingly straightforward draws for the leading Spanish pair of Barcelona and Real Madrid, quite possibly Bayern Munich as well, added to more testing encounters awaiting the likes of Manchester United, Chelsea and, to a point, Arsenal, the outright winner market for this year's Champions League has experienced a few readjustments since the Nyon ceremony.

Trouble is, knee-jerk reactions, by their very nature, are spontaneous acts which often, after a period of reflection, appear misguided. And the same could very well be the case here.

Take Chelsea. A pre-draw price of [5.4] has drifted out to [6.0] about Carlo Ancelotti's side after they were paired with Inter Milan in the last 16. And that would seem to make sense, initially, as Jose Mourinho's Inter side were widely accepted to be the 'best of the rest' in the draw after the top eight seeds.

That said, the Nerazzurri lost to Manchester United 2-0 on aggregate in last season's competition at this very stage, they also lost to Liverpool (3-0) the year before at the same stage and, yet again, to Valencia the year before that, on away goals, in this very round. For all their recent exploits in Serie A, Inter Milan have proven to be far from fearsome opponents in Europe.

Chelsea's move in the market is granted due to the fact the Italians are a decent side - but will they knock out the Blues? Not on recent form.

Conversely, by turning that argument around, the market could also be said to be out of line with regards to Manchester United. Their price may have moved from [9.8] to [10.5] on account of being drawn against Inter's city rivals, AC Milan, but maybe that still isn't a big enough move.

A fairytale return to Old Trafford for David Beckham it might be but despite Milan's domestic inferiority to Inter in the last few seasons, what can't be dismissed is their European pedigree - runners-up in 2004/05, semi-finalists in 2005/06, winners in 2006/07. Nothing to report these past couple of years but this side still present a stern test for Fergie's men as they try to make the QF's and a move of little more than half a point is possibly under-estimating their threat.

Concerning the Spanish pair, Barcelona and Real Madrid, the market has been supportive of their draw against Stuttgart and Lyon respectively - but it could easily have gone further.

In facing the Bundesliga outfit, Stuttgart, there's no doubt Barca have landed a tie which is well within their capabilities.

As for Lyon, they are the perennial under-achievers of European football and now shorn of most of the stars who saw them dominate the French top flight for so many years it's difficult to see Madrid not taking care of business over two legs.

As such, Barcelona's shift from [4.9] to [4.2] and Madrid's shortening into [6.2] from [6.6] could have been more severe. Neither looks under any threat and their safe passage into the last eight looks assured.

Looking at the other ties, Arsenal's move from [11.0] to [10.5] can also be seen as understated given the market's apparent disregard for their opponents Porto - [70.0] before the draw [80.0] afterwards - and Seville [22.0] have only come in three points after being paired with rank outsiders CSKA Moscow. Bordeaux have moved most in percentage terms after a contest with Olympiacos has seen them contract to [29.0] from [42.0] and Bayern Munich [20.0] from [24.0] having just seen off one Italian side, Juventus, will need to see off another, Fiorentina, in order to progress.

No doubt before the first leg of these ties swing into view next February the markets will have moved a little more - but barring major signings/injuries and managerial upheaval these alterations will only be slight.

Quite possibly by then the markets will have started to 'see sense' because the present feeling is that the initial reaction to the draw has been understated, at best, and totally misguided, at worst.