NFL Fan and Brand Report 2018

Each year, I do an analysis of NFL fandom.  The analysis is grounded in economic and marketing theory, and uses statistical tools to shed light on the question of which teams have the most loyal or “best” fans.  The key point of differentiation is that this is a truly quantitative analysis.  It’s driven by data, not by emotion.

On a side note, I also regularly podcast on sports and sports analytics topics.  You can find the accompanying episode (and all sorts of other cool stuff) via the link below.

The fundamental question that guides the analysis is simple – Who has the best fans in the NFL?  For the business folks maybe we say this as – What are the best brands in the NFL? These are simple questions without simple answers.  First, we have to decide what we mean by “best”.  What makes for a great fan or brand?  Fans that show up even when the team is losing?  Fans that are willing to pay the highest prices?  Fans that are willing to follow a team on the road or social media?

Even after we agree on the question, answering it is also a challenge.  How do we adjust for the fact that one team might have gone on a miraculous run that filled the stadium?  Or perhaps another team suffered a slew of injuries?  How do we compare fan behavior in a market like New York with fans in a place like Green Bay?

My approach to evaluating fan bases is to use data to develop statistical models of fan interest (more details here).  The key is that these models are used to determine which city’s fans are more willing to spend or follow their teams after controlling for factors like market size and short-term changes in winning and losing.

I use three measures of fan engagement: Fan Equity, Social Equity and Road Equity.  Fan Equity focuses on home box office revenues (support via opening the wallet). Social Media Equity focuses on fan willingness to engage as part of a team’s online community (support exhibited by joining social media communities).  Road Equity focuses on how teams draw on the road after adjusting for team performance.   These metrics provide a balance – a measure of willingness to spend, a measure unconstrained by stadium size and a measure of national appeal.

To get at an overall ranking, I’m going to use the simplest possible method.  A simple average across the three metrics.  (similar analyses are available for the NBA and MLB).  The rankings are based on multiple years of data, use multiple performance measures and sophisticated statistical techniques.  But nothing is perfect and I’d be remiss if I didn’t discuss some of the issues and controversies surrounding the NFL.

Its an understatement, but it’s been a tumultuous last few years for the NFL.  Concussions, anthem protests and domestic abuse scandals have all “complicated” fan’s relationships with teams.  The analytics I present use historical data to provide insight into recent of fan interest.  The analytics provide a measurement of the “fandom” that has been built over decades.  So, what is the impact of the current controversies?  Its impossible to say.

The problem is that while we can measure current fandom with snapshots of spending and social media behavior, the impact of incidents or events such as the anthem protests or the concussion lawsuits may play out over years or decades.  These types of issues might have an immediate impact on some metrics but the salient question is how will they influence long-term preference levels.

There may be “signals” in the data such as changes in TV ratings or higher no-show rates, but it’s tough to tell if these are blips or trends.  In terms of the observed decline in TV ratings, there is no shortage of theories – the aforementioned controversies, key player retirements, the 2016 presidential election, too many games, and just too many entertainment options have all been mentioned as root causes.  The existence of so many theories means that an analytics based approach is going to be difficult if not impossible.  This is especially true because while fandom can dissipate faster than its built, fan loyalty and passion is more likely to fade over years rather than disappear over weeks.

My conjecture is that the concussion issue and the anthem protests are both very significant problems for teams and the NFL brand.  The issues related to concussions may lead to lawsuits and decreased youth participation.  The anthem protests are something about which I’m reluctant to write (given the unfortunate state of the modern university).  But to keep it simple – the anthem protests have inserted some ugly “politics” into what is fundamentally an entertainment category.  If the product becomes less fun, why would you expect fans to enjoy it as much?  And while the phrase “less fun” might seem to trivialize the issues, spending on sports entertainment is about as discretionary as it gets.

Nevertheless, while the NFL has challenges, it is still the preeminent US sports league.  How the league fares in the future is probably going to be based on the strength of its strongest brands.  Which brings us back to our fundamental question – What are the best brands or fan bases in the NFL?

 

The Winners

The top five fan bases (team brands if you prefer) are the Cowboys, Patriots, Eagles, Giants and Steelers.  This is unchanged from last year.  The first switch in the rankings is the number 6 and 7 positions with the Bears moving ahead of the Saints.

The Cowboys excel on all the metrics.  They win in terms of Fan Equity (a revenue premium measure of brand strength), Road Equity and finish second in social media.  The underlying data (I will spare everybody the statistical models) reveals why Dallas does so well.  The Cowboy’s average home attendance usually leads the league, fans are willing to pay high prices, and the team’s twitter following is exceptional.  The Cowboys are America’s team.

The similarity across rankings gives me faith in the results.  However, the fan in me still questions some of what I see.  In terms of full disclosure, I grew up a Steelers fan in the 1970s and lived in the Chicago during the Bear’s glory days.  As such, I bring my personal biases to the interpretation of the findings.  I can’t help but to think of the Patriots as having bandwagon fans, and the Eagles ranking above the Steelers just does not seem right.

The analyst in me understands that the value of using a statistical approach is that the data can help correct my biases.  A couple of comments.  Patriot fans may be bandwagon fans.  But they have been on the bandwagon a long time.  A couple of decades of success likely means that the Patriots will remain NFL royalty even after Tom Brady leaves the game.

The Eagles surprise me, and probably most of western Pennsylvania.  They do get a bump from playing in the NFC East in terms of the Road Equity metric.  The NFC East is a strong collection of brands that benefit each other.  The Giants also benefit.  It is not easy to disentangle these effects.  And perhaps we shouldn’t since we can make a case that the rivalries that benefit these teams are because of the interest in the individual team brands.

 

The Losers

At the bottom of the rankings, we have the Browns, Jaguars, Chiefs, Rams and Titans.  This is an interesting group.  We have the struggling Browns, but we also have some teams like the Titans, Jaguars and Chiefs that have had recent success.

The important fact is that the statistical model I use, evaluates each team’s results based on how the league works on average.  If a team wins but does not convert the wins to increased revenues or social following, then the team will suffer in the rankings.

The good news for these teams (Jags, Chiefs, Titans) is that on-field success is the best way to create brand equity and fan loyalty.  The bad news is that it takes a good amount of success to move the needle long-term.

For the Rams and the Chargers, we should probably include an asterisk. Moving markets and playing in temporary stadiums can lead to some questionable findings.

 

The List

The complete list follows.  In addition to the overall ranking of fan bases, I also report rankings on the fan equity, social equity and road equity measures.  Following the table, I provide a bit more detail regarding each of the metrics.

2018 NFL Brand Rankings

 

Further Explanations

Fan Equity

Winners: Cowboys, 49ers, Patriots

Losers: Rams*, Raiders, Jaguars

Fan Equity looks at home revenues relative to expected revenue based on team performance and market characteristics.  The goal of the metric is to measure over or under performance relative to other teams in the league.  In other words, statistical models are used to create an apples-to-apples type comparison to avoid distortions due to long-term differences in market size or short-term differences in winning rates.

Just like last year, the 49ers are the interesting winner on this metric. After the last couple of years, it is doubtful that people are thinking about the 49ers having a rabid fan base.  However, the 49ers are a prime example of how the approach works.  On the field, the 49ers have not performed well.  Despite the on-field struggles, the 49ers still pack in the fans and charge high prices.  This is evidence of a very strong brand because even while losing the 49ers fans still attend and spend.  In terms of the overall rankings the 49ers don’t do all that great because the team does not perform as well as a road or social media draw.

In terms of business concepts, the “Fan Equity” measure is similar to a “revenue premium” measure of brand equity.  It captures the differentials in fan’s willingness to financially support teams of similar quality.  From a business or marketing perspective this is a gold standard of metrics as it directly relates to how a strong brand translates to revenues and profits.

One important thing to note is that some teams may not be trying to maximize revenues.  Perhaps the team is trying to build a fan base by keeping prices low.  Or a team may price on the low side based on some notion of loyalty to its community.   In these cases, the Fan equity metric may understate the engagement of fans.  I suspect that this is the case for the Steelers.

 

Social Media Equity

Winners: Patriots, Cowboys, Steelers

Losers: Rams, Jaguars, Titans

Social Media Equity is also an example of a “premium” based measure of brand equity.  It differs from the Fan Equity in that it focuses on how many fans a team has online rather than fans’ willingness to pay higher prices.  Similar to Fan Equity, Social Media Equity is also constructed using statistical models that control for performance and market differences.

In terms of business application, the social media metric has several implications both on its own merits and in conjunction with the Fan Equity measure.  For example, the lack of local constraints, means that the Social Equity measure is more of a national level measure.  While the Fan Equity metric focuses on local box office revenues, the social metric provides insight into how a team’s fandom extends beyond a metro area.

Social Media Equity may also serve as a leading indicator of a team’s future fortunes.  For a team to grow revenues it is often necessary to implement controversial price increases.  Convincing fans to sign expensive contracts to buy season tickets can also be a challenge.  Increasing prices and acquiring season ticket holders can therefore take time, while social media communities can grow quickly.  Preliminary analysis suggests that vibrant social communities are positively correlated with future revenue growth.

A comparison of Fan Equity and Social Media can also be useful.  If Social Media equity exceeds Fan Equity it is evidence that the team has some marketing potential that is not being exploited.  For example, one issue that is common in sports is that it is difficult to estimate the price elasticity of demand because demand is often highest for the best teams and best seats.  The unconstrained nature of social media can provide an important data point for assessing whether a team has additional pricing flexibility.

 

Road Equity

Winners: The NFC East, Raiders, Patriots and Steelers

Losers: Texans, Titans and Browns

Another way to look at fan quality is how a team draws on the Road.  There was a famous case in Atlanta just a few years ago, when Steelers fans turned the Georgia dome Gold and Black.

The Road Equity measure can be interpreted in multiple ways.  If a team has great road attendance, is it because the fans are following the team or because they have a national following?  In other words, do the local fans travel or does a team with high road attendance have a national following. When the Steelers turned the Georgia Dome Gold and Black was it because Steelers fans came down from Pittsburgh or because Steelers fans are everywhere.

I suspect that we are capturing a measure of national following rather than a tendency to travel.  The Road Equity rankings are dominated by high profile teams such as the Cowboys, Patriots and Steelers.  These teams also do very well on the Social Equity measure (which also measures national following).  This correlation gives me a confidence that the Road Equity picks up a measure of national following.

 

 

 

 

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