Sports Marketing & Sponsorship - FIFA/CIES International University ...

More documents

Recommendations

Info

The value of competitionseason attendance. Laverie and Arnett (2000) studyregular season attendance for one team. Boyd andKrehbiel (2003) use attendance at home games for sixMLB teams over five seasons. O’Reilly and Nadeau(2006) and Cocco and Jones (1997) treat attendanceas a predictor of revenue generated by a franchise.Zhang et al (2003) examine fans’ likelihood to attendor watch a game.This work focuses on predictors of seasonalattendance on a league basis. The use of season-longattendance figures is a control for anomalies that mayaffect attendance at an individual contest. Data isdrawn from five leagues representing five differentsports. This presents some issues for themeasurement of attendance. Total attendance will varygreatly from league to league because of the variationin the number of teams in the league, the number ofgames played in a season, and the capacity of eachvenue (O’Reilly & Nadeau, 2006). Averageattendance, expressed as a ratio of total leagueattendance divided by total home, regular seasongames played, will also vary greatly from league toleague. Venue capacity can also influence attendance,from league to league and even from team to team. Toovercome this variable, we use the percentage of theseason-long seating capacity (ATTEND) as theindicator of attendance.ATTEND is measured as a ratio of the averageattendance for a league divided by the average venuecapacity for a league. The formula for the ATTENDdependent variable appears as:where the sum of attendance for season w is dividedby the sum of home games for season w and the sumof venue capacity for team i playing in season wdivided by the total number of teams n for season w.This measure will allow for a better comparison of twoor more leagues that have heterogeneous venue sizes,numbers of teams and season lengths.One concern with this approach is the inherent limitof the ATTEND dependent variable. No arena orstadium can have more than 100% filled capacity,possibly leaving some unsatisfied demand. For thisstudy, the data indicate that this potential issue doesnot seem to be problematic, since average attendanceis only 55%, with a standard deviation of 14%.Competitive balanceAs stated above, a key responsibility of a sports leagueis to manage the perceived value of the games playedby the league members. The league meets thisresponsibility by attempting to provide excitingcontests – those which hold the outcome in doubt foras long as possible. The league can strive to achievethis goal by placing limits on member teams’ abilitiesto hoard player talent (O’Reilly & Nadeau, 2006). Forexample, the league could impose a salary cap toforce wealthier teams to trade expensive, talentedplayers. It could also liberalise free agency rules toencourage player movement, or institute a draft thatallows the worst-performing team to select first fromthe pool of incoming player talent. If the league isunable to maintain a competitive balance, then theoutcome uncertainty of games reduces. As aconsequence of this decreased uncertainty, theperceived entertainment value of the league’s gamesmay decrease (Deighton, 1992).Hypothesis 1: League attendance will benegatively associated with the competitiveimbalance in the league.In addition to competitive balance, the impact onattendance of certain economic characteristics of thevarious markets that the league serves should beconsidered, specifically: market size, market wealthand market unemployment.RESEARCH PAPER● OCTOBER 2009 ● International Journal of Sports Marketing & Sponsorship13
The value of competitionRESEARCH PAPERMarket characteristicsAs the market population increases, the potentialcustomer base increases as well (Baade & Tiehen,1990; Fort, 2003; Hansen & Gauthier, 1989;Noll, 1974). In larger markets, therefore, it is likelythat a team will draw more fans to a game. Weoperationalise market size for a league as the totalpopulation of the metropolitan statistical areas (MSAs)served by the league’s teams.Hypothesis 2: League attendance will be positivelyassociated with the size of the population in theleague’s markets.Because entertainment is considered a luxurypurchase (not an essential purchase like food andshelter), attendance at games should be influenced bythe disposable income in the market. Therefore, weexpect that attendance will be higher in leagues thatserve wealthier markets (Baade & Tiehen, 1990; Fort,2003; Hansen & Gauthier, 1989; Noll, 1974). Weoperationalise market wealth as the average income ofthe MSAs served by the league.Hypothesis 3: League attendance will be positivelyassociated with the average income of the leaguemarkets.Hypothesis 4: League attendance will beassociated with the unemployment rate for eachrespective league.Membership volatilityAs membership of the league changes, either throughexpansion, contraction or relocation, a resultinginstability could have an impact on league attendance.Fans in new markets may be attracted to the teambecause of the novelty of a new entertainment option.Dropping a poorly performing team (presumably onewith low attendance) from the league should have animmediate impact, increasing the average leagueattendance, if at the expense of total attendancefigures. Furthermore, a team that struggles to drawfans could improve attendance by moving to a bettermarket. Overall, change is expected to have a positiveeffect on attendance. Therefore, we developed thefollowing hypothesis:Hypothesis 5: The number of new markets anddeleted markets relative to the total number ofteams in the league will have a positiveassociation with average league attendance.MethodologyAttendance at spectator sports events requires theexpenditure of both money and time. The availabilityof each will vary with unemployment, but in oppositedirections. Higher unemployment translates into moredisposable time to attend games, but unemploymentalso decreases the disposable income available to buytickets. Given these conflicting directions, it isuncertain as to what net effect, if any, unemploymentwill have on attendance. Therefore, we investigate arelationship between unemployment and attendancebut do not predict the direction of this relationship. Wedefine unemployment as an average of the annualunemployment rates of each of the league’s MSAs.This study will test the relationship of five variables:competitive imbalance (CI), market population (POP),average market income (INC), market unemployment(UNEMP), and the rate of team turnover (TURNOVER)to average attendance (ATTEND). Since the league isthe unit of analysis, all variables will be measured atleague level.Competitive balanceResearchers’ uses of different proxy variables for doubtor uncertainty of a competition’s outcome has variedby methodology. Peel and Thomas (1992, 1996) usebetting odds as a proxy. Borland and Lye (1992)employ the number of victories needed to clinch a14 International Journal of Sports Marketing & Sponsorship ● OCTOBER 2009 ●
Page 1 and 2: ● OCTOBER 2009 ● VOLUME ELEVEN
Page 3 and 4: New reports from IMRDriving Busines
Page 5 and 6: AbstractsABSTRACTSThe value of comp
Page 7 and 8: Editorial boardEditor Professor Mic
Page 9 and 10: The value of competitionRESEARCH PA
Page 13: The value of competitionRESEARCH PA
Page 19 and 20: The value of competitionTABLE 2 Alt
Page 25 and 26: The value of competitionThorne, D.,
Page 27 and 28: Sporting involvement and alcohol sp
Page 47 and 48: Examination of the causal effects b
Page 49 and 50: Causal effectsRESEARCH PAPERpercept
Page 51 and 52: Causal effectsRESEARCH PAPERservice
Page 53 and 54: Causal effectsTABLE 1 Convergent an
Page 55 and 56: Causal effectsFIGURE 1 Estimated st
Page 57 and 58: Causal effectsRESEARCH PAPERstudies
Page 59 and 60: Causal effectsRESEARCH PAPERGrönro
Page 61 and 62: The crucial ‘where’ of motorspo
Page 63 and 64: Is motorsport “a race out of plac
Page 65 and 66:
Is motorsport “a race out of plac
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Sustaining the race: a review of li
Page 83 and 84:
Sustaining the raceUsing concepts s
Page 85 and 86:
Sustaining the raceRESEARCH PAPERin
Page 87 and 88:
Sustaining the raceRESEARCH PAPERdi
Page 89 and 90:
Sustaining the raceRESEARCH PAPERli
Page 91 and 92:
Sustaining the raceRESEARCH PAPERof
Page 93 and 94:
Sustaining the raceRESEARCH PAPERTh
Page 95 and 96:
Sustaining the raceRESEARCH PAPERAn
Page 97 and 98:
Sustaining the raceRESEARCH PAPERUn
Page 99:
Editorial policyEDITORIAL POLICYFoo
show all

Sports Marketing & Sponsorship - FIFA/CIES International University ...

Create successful ePaper yourself

Delete template?

Save as template?