Football point spreads were designed to divide the betting public in half and turn transaction costs into risk-free returns for gambling operators. Invariably, one team will be better than its opponent and, in the absence of a point spread, would naturally be the bettors' choice. By awarding a skillfully devised number of points to the inferior team (or underdog), the superior team (or favorite) becomes less attractive to bettors and, in theory, is then picked to "win" by roughly half of the bettors. Since point spreads -- like security prices -- adjust for all available information, regular betting profits would be a bona fide exception to the efficient market hypothesis.
The performance of football coaches can be appraised by their success against the point spread. If the football betting market is as efficient as researchers have generally reported, no team should experience abnormal success or failure against the spread. The purpose of this study is to appraise the performance of college football coaches in the absence of any advantages which their programs may afford them. To accomplish that goal, we investigated the performance of college football coaches with minimum tenures of seven years at their respective schools against the point spread for the 2001-2007 seasons.
Ladd Kochman and Ken Gilliam. "Performance Appraisal and Football Point Spreads: A Note." New York Economic Review. vol. 40, Fall 2009, p. 51-54
BibTeX entry download