FIFA's horribly flawed ranking system just produced an insane list of the best teams in the world

FIFA published its monthly world rankings for July, and it's even more inexplicable than usual.

We'll get into a full discussion about why the ranking formula is so bad in a little bit, but first check out just how weird these rankings came out:

• Wales is 10th, and has the most FIFA ranking points of any team in the world in the past 12 months (note: Germany won the World Cup 12 months ago).
• Argentina is ranked ahead of Germany, who beat them in the World Cup final.
• Romania is 8th after not qualifying for the 2014 World Cup.
• Portugal is 7th after not making it out of their group in the World Cup.
• France is 22nd, one spot ahead of Iceland.
• The US, after beating Germany, the Netherlands, Guatemala, and Honduras in the last month, dropped seven spots to No. 34.

Here's the top 10:

1. Argentina
2. Germany
3. Belgium
4. Colombia
5. Netherlands
6. Brazil
7. Portugal
8. Romania
9. England
10. Wales

So how does Wales - a country that has never qualified for a European championship and hasn't made the World Cup since 1958 - end up 10th in the world?

FIFA's ranking formula, is how. Let's explain.

To determine this ranking, FIFA assigns a point value to every game a national team plays over the previous four years, with more recent games weighted more heavily. A game's point value is made with four variables: match result, importance of match, strength of opponent, and strength of opponent's confederation. FIFA multiplies these four factors together to find a team's ranking points in a given game, then takes the average of a team's points per game over the last four years to determine their total strength.

Here's the full formula from a post we wrote last year (feel free to skip if you're not into the nitty-gritty):

Points = M (points for match result) * I (importance of match) * T (strength of opponent) * C (strength of confederation)

A breakdown of the four factors:

• M (points for match result): Teams get 3 points for a win, 1 point for a draw, 0 points for a loss.
• I (importance of match): This multiplier is fixed based on perceived importance of each competition, as follows:
• Friendly game: 1.0
• World Cup or confederation-level qualifier: 2.5
• Confederation's Cup or confederation-level competition (like the Euros): 3.0
• World Cup game: 4.0

• T (strength of opponent): T= 200 - (ranking of opponent). So if you play, 2nd-ranked Germany, T=198. And if you play 10th-ranked Wales, T=190.
• C (strength of confederation): This multiplier is fixed by the perceived strength of each continent. The mean between the two numbers is used when teams from different continents play each other:
• South America: 1.0
• Europe: 0.99
• Others: 0.85

Multiply those four numbers together, and you get your FIFA ranking points for each game. To get a team's ranking points for each year, FIFA takes the average of its points per game over all four 12-month windows and weights them.

The ranking takes the last four years of games into account, as follows:

• Four years ago: 20% weight
• Three years ago: 30% weight
• Two years ago: 50% weight
• Current year: 100% weight

So that's the entire formula.

You can see the problems here. The formula is rudimentary and lacks the ability to assess games beyond simple win/loss/draw. It doesn't take into account goal differential or home-field advantage, which is more important in soccer than most other sports, according to Nate Silver's numbers. More importantly, you get ZERO ranking points for a loss no matter what. To FIFA's eyes, Spain battling Germany and losing 2-1 in Berlin is the same as Spain getting blown out by the Faroe Islands 5-0 at home.

This system rewards teams from Europe or South America that play a low number of high-stakes games (since it takes the average of ranking points, not the raw total). In other words, this system was built for what Wales has done over the last 12 months.

Wales has played six games in the last 12 months. Here are their results:

• 1-0 win over Belgium (June 2015, Euro 2016 qualifier)
• 3-0 win over Israel (May 2015, Euro 2016 qualifier)
• 0-0 draw with Belgium (November 2014), Euro 2016 qualifier)
• 2-1 win over Cyprus (October 2014, Euro 2016 qualifier)
• 0-0 draw with Bosnia-Herzegovina (October 2014, Euro 2016 qualifier)
• 2-1 win over Andorra (September 2014, Euro 2016 qualifier)

For comparison, the US has played 12 games during that same period, and only one of them (this week's 2-1 Gold Cup win over Honduras) wasn't a friendly.

Wales had four wins, two draws, and zero losses, all in European qualifiers that come with the 2.5x multiplier. Unlike almost every other team in the world, they didn't play any friendlies. That helped them immensely because they didn't kill their points average by losing a meaningless friendly. Even if they had played a friendly and won, it would have been worth about half the FIFA ranking points at these other games and dragged down their ranking anyway.

As a result, Wales had a bonkers FIFA ranking number in the last 12 months. Their 817 points in the last 12 months is the highest in the world. Germany earned just 577 points during the same period, even though they won the World Cup during it! And all because they lost two meaningless friendlies and dropped a Euro qualifier game to Poland.

A bunch of European teams who played Euro qualifiers over the last 12 months got a huge boost, while teams that didn't have meaningful continental competitions (sorry, CONCACAF) tumbled in the rankings because the only games they played were friendlies.

It'd be great if these FIFA rankings were completely meaningless. Unfortunately, they're only mostly meaningless because this is the ranking FIFA uses to determine the eight seeded World Cup teams. When the next World Cup draw rolls around in 2017, this stuff really starts to matter.

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