NHL Fan Analysis Part 1: Fan Equity

Note: This is Part I of our study of NHL Fan Quality.  This week we will be ranking NHL teams/fans on the following dimensions: Fan Equity, Social Media Equity, Fan Equity Growth, Price Elasticity, Win Elasticity, and Social Media based Personality.  For more details on our measures of quality, please click here.  For Part II, click here.  For Part III, click here.

Our goal this week is to give NHL fans something to talk about during the offseason (and by talk about, we mean an opportunity to say awful things about us via Twitter and e-mail).  We begin our review of NHL fan bases with our “Fan Equity” rankings.  This ranking looks at fans’ willingness to financially support their teams using a model that controls for winning rates, population, income, and other factors.  The basic idea is that we look at how teams over or under perform in terms of home ticket revenue to what similar (with respect to market potential and on-ice results) teams produce.  More details on the revenue premium model we use to evaluate fan equity and an overview of the various rankings to be published this week may be found here and here respectively.

So where do the best NHL fan bases live?  Sorry America, but Canada dominates these rankings.  The top six teams in terms of fan equity are Toronto, Montreal, Edmonton, Winnipeg, Vancouver, and Chicago.  The top US based teams are Chicago, Philadelphia, New York (Rangers), and Minnesota.

NHL 2014 Fan Equity

Really?  Edmonton has a better fan base than Chicago?  Pointy-headed academics should stick topics they know something about, and hockey is obviously not one of those topics. What drives these findings?  Let us highlight some of the underlying factors that drive the results.  Chicago won 46 games (107 points) and averaged over 22,000 fans last season.

This is great support for the Blackhawks, and this is why they crack the otherwise Canadian top six.  So, why does Edmonton beat Chicago?  Because Edmonton’s support is stronger once we control for market characteristics and team performance.  Last year, Edmonton averaged 16,800 fans per home game while winning only 29 games (67 points).  Both teams sell out, but Edmonton does it despite playing well below .500.  In addition, the Edmonton market is less than 1/8 the size of the Chicago market.  And despite these differences in success and market size, Edmonton is able to charge slightly higher average ticket prices.

The big winner in all this is the Toronto Maple Leafs.  The Leafs achieve amazing pricing power and consistent sell-outs despite only average on-ice performance.  Toronto is truly Hockeytown North America.

At the bottom of the rankings, we have Columbus, Tampa, Dallas, and Phoenix.  This grouping suggests that the key to having a vibrant fan base is locating somewhere where people play hockey.  We understand the desire to achieve a broad television footprint, but there is also something to locating where the fans live.  For example, last year Dallas drew an average of 14,600 fans despite charging some of the lowest prices and winning 40 games.  As a contrast, Winnipeg drew more fans despite winning fewer games.  But the kicker is that Winnipeg is able to charge more than twice the average ticket price as Dallas.  Also these results occur despite Dallas having a population of about 6.8 million compared around 700,000 in Winnipeg!

Mike Lewis & Manish Tripathi, Emory University 2014.