Note: This is Part II 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 I, click here. For Part III, click here.
Today, we start to dive a bit deeper into our analyses of NHL fan bases. Specifically, we look at the top teams in terms of sensitivity of attendance to wins. These rankings are based on a regression model that includes team fixed effects, average prices, winning percentage and interactions between the team dummies and the winning and pricing variables. We use data from 2000 to 2014 for the analysis.
These analyses are instructive as they provide a look at the consumer behaviors that generate our fan equity rankings. But these analyses also raise questions. The best way to consider the results is that they are driven purely by the data. What we don’t have is the underlying theory. The best example of this occurs with our win sensitivity rankings. What does it mean if attendance is very sensitive to winning rates? Are the fans discerning and demanding of quality or are they bandwagon fans that abandon the team when things go bad. We leave the interpretation to the reader.
The top five teams in terms of sensitivity to winning rates are the Detroit Red Wings, Chicago Blackhawks, St. Louis Blues, Buffalo Sabres, and Dallas Stars. We suspect that this list will raise eyebrows. The Red Wings are one of the most dominant franchises in the NHL, and are a great box office draw. But, a closer look at the data reveals that this is a fan base that has perhaps become a bit spoiled. When the Red Wings went from being a 70% plus winning percentage team in the early part of the decade to a 60 something winning percentage team around 2007 to 2010, Red Wing attendance dropped below 20,000 for a few years. While this drop was small, the rate of attendance change versus winning percentage was large compared to other NHL teams.
The Blackhawks might be the best example of a fickle fan base. When the Blackhawks are winning 30% of their games they draw around 13,000 fans per home game. When they win 70%, they draw 22,000 fans. The figure below shows a scatter plot of winning percentage and home attendance for the Blackhawks.
On the flip side, we also have a list of the five fan bases that react the least to changes in winning rates. Here, again we have multiple interpretations. Are these fans completely loyal, and therefore they show up regardless of if the team is winning or losing? Or are these fans there for the fireworks and ancillary entertainment, and thus barely know that a game is going on?
The teams with the least sensitive fans bases are Arizona (Phoenix), New Jersey, Columbus, San Jose and Florida. Arizona, in fact, has a negative correlation between winning rates and attendance (see figure below). Yes, we know that there are some factors that are not in the model such as time in market, but this pattern is striking. Basically, the take away is that for these teams performance on the ice is secondary. This actually could be the right strategy in small markets, or markets where hockey doesn’t have a deep tradition. It makes sense to play up the entertainment aspects in a place like Columbus where a team may never be as consistent a winner as the across town competition.
Mike Lewis & Manish Tripathi, Emory University 2014.