NFL Fandom Report 2019

 

Time for our yearly look at NFL fandom.

Each year, I do a quantitative 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 fundamental question that guides the analysis is simple – Who has the best fans in the NFL?  For the business folks, maybe we phrase this as – What are the best brands in the NFL? It’s a simple question that requires some complicated analyses.  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 social media? Fans that show up to see the team play in other markets? All good options.

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 uses data on attendance, revenues, social media following and road attendance to develop statistical models of fan interest (more details here).  The key is that the 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.

Similar to past years, 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 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 balanced analyses of fandom – 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 use a statistical tool that looks at the correlation across the three metrics to create a “Brand Equity Factor”.  Similar analyses are available for the NBA and MLB.

The Winners

 

The top five fan bases (team brands if you prefer) are the Cowboys, Patriots, Eagles, Giants and Steelers.  This is unchanged from the last two years – leaving me with little to say. The Cowboys have long been NFL royalty and the Patriots are now firmly established at the top of the league. It remains to be seen if the Patriots will remain near the top when Brady and Belichick move on.

In past years I have noted that the Eagles are a bit of a surprise.  But the strong social and road scores keep the Eagles near the top. The Steelers could probably be a bit higher on the list. The Steelers tend to price near the middle of the league and this limits their Fan Equity score.

The Giants are an interesting case. They do well on Fan Equity (especially compared to the Jets) and the Road Equity score is impressive.  The Social Equity score suggests that the Giants are more of a regional brand but when your region is NYC it’s not a major problem. The Road Equity score is an interesting one to debate. The teams in the NFC East all do well on this measure. I could adjust for divisional affiliation but the NFC East is, for whatever reason, the glamour division of the NFL. My feeling (like I said it’s debatable) is that the teams in that division should be given credit for the divisions appeal.

The next group of five includes the Packers, Broncos, Bears, 49ers and Saints.  A lot of face validity to these results. The 49ers might raise some eyebrows, but it is a team that does very well in terms of attendance and pricing power. The Bears, Packers and Broncos are all strong brands with impressive histories. The Saints are the relative newcomer in the top ten. Like the Patriots, it will be interesting to see how Saints fandom responds when Drew Brees retires.

 

The Losers

At the bottom of the rankings, we have the Bengals, Jaguars, Titans, Chiefs and Rams. Only minor changes from last year. The Browns have edged out of the bottom 5. These teams all suffer from the same issues – relatively weak pricing power and limited social followings.

The Chiefs are the team that will generate push back. The Chiefs have had some success and they have significant star power. The problem is that the Chiefs lack pricing power and do not have much of a social following (I use Twitter). However, the Chiefs and Browns are probably the best positioned teams to make moves up the charts the next few years.

For the Rams (and the Chargers), we should probably include an asterisk. Moving markets and playing in temporary stadiums can lead to questionable data. The Rams – like the Chiefs and Browns – are well positioned for on-field success over the next few years.  The good news for these teams 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.

 

The Business Implications: Why does this Matter?

This study is about measuring fandom intensity or engagement. The logical foundation is that we attribute over or under performance in revenues or social following to fan engagement. To do this, we have to control for factors like market size and winning. This is the key point. Fan engagement is a little different from brand equity (the value of a brand) because we are controlling for market differences. The preceding results are more about intensity or passion of a fan base rather than the value of the fan base.

Fandom intensity is an important and often overlooked part of brand equity. In a full brand equity analysis, I would want to combine structural elements of a market (population, income, arena, etc…) with a fan engagement factor to assess a team’s brand equity. The value of the fan base is probably best thought of as a product of the passion (or intensity or engagement) and the size of the fan base.

Why do we care about fan intensity?

A standard approach to value sports assets (teams, players and sponsorship deals) is to use comparables. The idea is that you evaluate a future deal based on the characteristics of similar past deals. It’s the same concept used in real estate where housing prices are usually dictated by factors such as square footage, number of bathrooms and the previous sales in the neighborhood.

In the world of sports, there are many deals that are valued based on the fans. Stadium naming rights and sponsorships are two prime examples.

But in the case of sports deals, it’s important to consider the passion of the fan base. Let’s consider a non-NFL example to illustrate the point. How might an analyst value similar deals (naming rights, sponsorships, etc…) related to the Clippers and Lakers. Both teams play in the same city so there is little difference in market related factors. If we tried to rely on current winning rates then the Clippers would appear to be the more valuable deal. The missing factor is that the Lakers have a fan base (created through a history of All Star Players and Championships) that is incredibly engaged with and attached to the Lakers brand. If we were valuing competing deals across the two clubs, it is critical that we also consider the passion (and staying power) of each team.

While I present my results as rankings, behind the scenes there are a set of numerical scores for each metric. These numerical scores provide a tool for valuing promotions and sponsorships. The numerical scores provide a basis for valuing the passion of fans across teams. The use of multiple metrics is again useful because each metric has a different behavioral interpretation.

Two quick examples.

The Fan Equity metric is a measure of willingness to spend. Critically, it is a measure of willingness to spend that controls for differences in market characteristics (population, income levels, etc…) and current team performance. In this year’s results, the Cowboys rank number 1 in Fan Equity and the Texans finish number 21. The (behind the scenes) analyses suggest that Dallas’ spend premium relative to the league average is positive 7.79% while Houston’s premium is .39%. This suggests that in a sponsorship deal where all things are equal (number of impressions, median income, etc…) that the sponsorship of the Cowboys would merit a 7.4% premium versus an identical partnership with the Texans. In some ways, this seems like a conservative estimate given the prominence of the Cowboys. But, NFL fandom is intense everywhere and the Fan Equity metric is geared towards local markets.

The Social Equity metric is a measure of transmission or amplification. In terms of Social Equity, the Cowboys rank 3rd and the Texans rank 12th. For this metric, the differences across teams are much more substantial. Relative to the league average the Cowboys have a social media equity index score of 87% (the Cowboys social amplification factor is 87% greater than the average team). The Texan’s index is 1% above the league average. The results suggest that the Cowboys would merit an 86% premium for a nationwide or social media oriented promotion versus the Texans. Again, these results are based on models that adjust or control for differences in team performance and market characteristics.

The Complete List

Click on the logo below to listen to this podcast episode:

 

 

 

Major League Baseball Fandom Report 2019: The “Best” Fans in Baseball

Major League Baseball seems to be perennially in crisis in terms of its relationship with its fan base.  Free agency, strikes, steroids, competitive imbalances, short attention spans of millennials, a lack of stars, an aging fan base, and other factors have been cited to explain why baseball has either lost or is in danger of losing its position as the national pastime.

On the other hand, the league keeps setting revenue records. This article from Forbes reports that baseball has set revenue records for 16 straight years.

When thinking about baseball and its fans, it is safest to say it is a mixed bag of positives and warning signs.  Record revenues show that baseball has been able to develop innovative revenue streams and attract high value sponsors. But there does seem to be trouble on the horizon in terms of the next generation of fans.

In terms of demographics, MLB has one of the oldest fan bases (up there with golf). It is also largely viewed as the most family oriented sport. This is an interesting pattern. An aging fan base is a concern for the future if fans are aging out of attending games.  Of course, an aging fan base is also potentially an increasingly wealthy fan base.  The family orientation is an enormous positive. Sports fandom is largely transmitted through the family and the nature of the game helps bring the next generation into the fold (summer schedule, 81 home games, relatively cheap tickets, etc…).

There is also the issue of “tanking.” Tanking has been most frequently mentioned in the context of the NBA but it’s also a concern for baseball. Losing 100 games has long been considered epic futility. In 2018, the Orioles lost 115 games, the Royals lost 104, and the White Sox lost 100. The Marlins and Tigers lost 98.  Tanking is a fan issue because it speaks to the quality of the product that fans (in certain markets) are asked to buy.

Tanking brings us to the issue of the Collective Bargaining Agreement. While the Collective Bargaining Agreement is usually discussed in terms of the labor relationship between owners and players, the CBA is a critical issue for fandom because this agreement essentially defines how the league operates. For example, the CBA largely defines the rules related to revenue sharing, luxury taxes, and salary caps. These rules directly impact fans by creating the structures that influence player movements and competitive balance.

Baseball is notable for having relatively little revenue sharing and no salary cap. Controlling the distribution of spending by teams matters because there is a significant correlation between spending and winning in baseball.   The Red Sox won the World Series and also led the league with a payroll of about $240 million. At the bottom, The White Sox had a payroll of around $80 million. Remember, the White Sox lost 100 games.

The CBA matters because teams will find strategies that work for their circumstances.  There is some speculation that small market teams like the Royals are using business models that involve developing low cost homegrown talent, trying to win for a few years and then dumping payroll to pursue draft picks. The Royals reduced payroll from $185 million in 2017 to $135 million in 2018. The Royals lost 104 games in 2018 after making the playoffs in 2014 and 2015. In 2018 the Dodgers had the 4th highest payroll at about $195 million.  But that payroll was $59 million less than the previous season’s amount.  This decline allowed the team to drop below the luxury tax threshold. Are these strategies designed to maximize fan enjoyment?

The run-up to the 2019 MLB season has also included a “glacially” slow free agent market.  Eventually, the big name stars signed with teams outside of the major markets. Manny Machado signed with the Padres for $300 million for ten years and Bryce Harper signed with the Phillies for $330 million over 13 years. “Stars” matter to fans. Fans like winners but they also like stars.  While the NBA is and has been for a long time all about stars – Larry, Magic, Michael, Kobe, LeBron, Steph…. – MLB doesn’t seem to produce household names anymore. This article states that ESPN’s annual ranking of the most famous athletes includes 13 basketball players, 2 table tennis stars and no baseball players.  This lack of “media” stars matters.  Maybe not in the short-term where winning mostly drives attendance but likely in the long-term. When I have looked at the factors that build brand equity in sports, two items really jump out. Winning championships and having a history of Hall of Famers and All Stars.

 

The Best Baseball Brands

My last statement about how brands are built is based on logic and by running numbers on fandom in MLB and other sports leagues. As we enter the 2019 season, it’s time for my annual data based look at MLB fandom across the MLB brands. This analysis starts from questions like “Who has the best fans in Major League Baseball?” and “What are the best brands in MLB?”

These are simple questions without simple answers.  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 most?  Fans that are willing to follow a team on the road or social media?  Even after we agree on the question(s), 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 Milwaukee?  What if a team just opened a new stadium?  Did the fans stream in to see the building or to see the team?

For the past few years, I have been studying fandom across professional and college sports.  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 cities fans are more willing to spend or follow their teams after controlling for factors like market size and short-term variations in performance.

The “Overall” rankings are based on three sub-rankings – Fan Equity, Social Equity and Road Equity.  Fan Equity is a revenue premium based metric that compares the team’s box office results with league standards.  In other words, Fan Equity assesses how much fans are willing to “attend and spend” relative to fans across the league.  The KEY idea is that we measure this while controlling for team success and market characteristics like incomes and populations.

  • Fan Equity is a great metric for assessing the CURRENT level of passion or engagement in a local fan base.

Social Equity is focused on the team’s social media followings (Facebook and Twitter).  Again, the rankings are based on how a team’s social media results compare across the league after controlling for team success.

  • The Social Equity metric provides insight into the team’s POTENTIAL fan passion.

The third metric is Road Equity.  This metric is based on a statistical model that looks at how teams draw incremental fans when on the road.  The KEY idea is that draw outside of the home market reveals something about a club’s national appeal.

  • Road Equity provides a metric of passion beyond the local market. This passion can be positive (love the Cubs) or negative (hate the Yankees).

I could go on.  In the past I have developed additional metrics related to win sensitivity or price sensitivity.  Willingness to attend even when the team loses probably says something about loyalty.  Fans that don’t watch a loser might be termed bandwagon fans.  Willingness to pay is a great marketing metric.  Willingness to pay to see a team that isn’t winning is another great indication of loyalty.  These metrics are available upon request (mike [dot] lewis [at] emory [dot] edu – FYI, I don’t look at the comments) but I want to keep this article brief.

So, we have three metrics with different pluses and minuses.  In the quest to find an overall winner, I use a weighted average of the three metrics (more weight on the Fan Equity metric).  This may not be the right weighting but it’s usually a good idea to emphasize how customers actually spend.

 

The Winners

Overall, the group of clubs that comprise the Top 6 contains little in the way of surprises.  The Red Sox rank number one and are followed by the Yankees, Giants, Dodgers, Cubs and Cardinals.  The Red Sox are perennially strong and finished first last year.  They also won the world series.  Boston is probably the best sports town in America.

In general, the clubs at the top of the list share these same traits.  They are all able to motivate fans to attend and spend as they all possess great attendance numbers and relatively high prices.  More to the point, these teams are even able to draw well and command price premiums when they are not winning.  Historically, the Cubs are the best example of this.

The list of winners probably raises an issue of “large” market bias.  However, keep in mind that the methodology is designed to control for home market effects.  The method is explicitly designed to control for differences in market demographics (and team performance).  While the “winners” tend to come from the bigger and more lucrative markets, other major market teams do not fair particularly well (White Sox, A’s).  There is also a more subtle point.  The large market teams likely have the best fan bases because they often have significant histories of success and are often featured in the media.

The topic of how these brands are built over time is another one of my favorite things to talk about.  I think it’s mostly two (highly correlated) things – championships and stars. Building brand equity is a fascinating sports topic and I think it’s a difficult one for teams (in small markets) to manage.  Will the current popular strategy of cycles of tanking and competing yield enough winning and “temporary” star to build brands?

 

The Bottom

The bottom of the list features the Marlins, White Sox, Indians, Athletics and Rays.  It is interesting that the bottom also includes teams from major markets such as the Bay Area, Chicago and Miami. The markets with two teams seem to yield dramatically different results within each market. I think this reveals something fundamental about fandom.  Fan bases are communities and many fans want to be a part of the most popular group. It is a simple theory but the end result is that the second team in a market will struggle to compete. Many fans are drawn to the bigger and more dominant community – Yankees, Cubs, Giants or Dodgers rather than the Mets, White Sox, A’s or Angels.

The case of the Marlins reveals another common problem for franchises. The Marlins finish is a reflection of how the team struggles on multiple dimensions. Attendance is often in the bottom 5 of the league despite being located in a major metro area.  Pricing is also below average for MLB.  Why do the Marlins struggle?  Lots of reasons.  Florida weather, a short history (fandom is often generational), a history of small payrolls and bad teams, and Miami being a transient city.

The Indians is an interesting case as well.  Cleveland is a passionate sports town.  But when you look at the numbers there is not a lot of support. An open question is how much of the problem is the Indian’s branding? The Indians have made moves to shift from the Native American imagery but have retained the team name.  I suspect that half measures might be the worst approach.

 

The Movers

In terms of year over year comparisons, there is a good amount of stability on the list.  This is a good sign since sports brands should evolve slowly.  Some notable movers on the list were the Blue Jays and Phillies moving up and the Diamondbacks and Indians dropping down. The Blue Jays illustrate an important feature of the model. When I calculate the brand “premiums” I use the most recent three seasons. This is intended to provide stable but evolving measures of brand equity. In the case of the Blue Jays, the improvement in ranking was mostly driven by attendance growth in 2016 and 2017. In the case of the Phillies the improvement was about growing attendance coupled with relatively high prices.

 

The 2019 Complete List

Click the logo below to listen to this Fanalytics podcast episode:

ACC College Football Fandom Report: The Importance of Culture

Culture and fandom are connected.  The culture of a city or a university often includes a significant sports fandom sub-culture.  Because culture itself is largely driven by the shared knowledge and interests of a population.  The Cubs and the Bears are a big part of the city of Chicago.  The Cardinals might be the most universal shared passion in the city of Saint Louis.

At the college level, many universities with big time sports refer to themselves as the “blank” nation.  I worked at the University of Florida for a few years and this place was clearly the Gator nation.  In other words, the mascot or team name essentially became the focal point for the university community.  It makes sense.  The football team provides a good chunk of the common experiences and knowledge that creates a common University of Florida culture.

Why am I talking about the SEC in an article about the ACC?  “Fandom” is interesting because it goes beyond “consumer loyalty” and becomes a cultural force.  I think the SEC is probably the best example of where football fandom drives university culture.  Maybe this doesn’t happen as much in the ACC.  In other words, maybe the ACC institutions just don’t have the same football culture as the other Power 5 leagues.  The ACC might be the inverse of the Big 12.  The Big 12 has a strong football culture but a lousy media foot print.  The ACC has great media markets but far less football culture.

The economic analysis of college football brands highlights the relative weakness of the ACC (versus other leagues).  The rankings are based on relative economic performance relative to winning rates and investment.  The analysis gets beyond fair-weather fandom and schools buying their way into winning on field.

The ACC results are “interesting” and I think revealing.  The best football brands in the ACC are Georgia Tech, NC State, Syracuse, and Florida State.  Let me say that again – the best brands.  Not the best teams.

The ACC might be best viewed in terms of where the league has potential.  Georgia Tech is a clear number 2 in Atlanta, but Tech may have more potential as a brand than the rest of the ACC.  It’s in a football mad major metro area in a football mad state.  NC State is interesting because its local competitors are elite basketball schools.  NC State could be the premier football brand in North Carolina.  Syracuse is also all about potential.  New York is a pro market.  But if there is room for a college brand then Syracuse has a lot going for it.  Florida State is, historically, probably the class of the league.  They do well in terms of revenues but they invest heavily in their program.  FSU’s investment dwarfs what Georgia Tech or NC State invests.

The next group features Virginia Tech, Louisville, UNC, Duke and Pitt.  Louisville is one of the most interesting college sports brands.  Louisville is innovative and almost seems to operate with more of a pro model (in terms of marketing).  It’s also located in an almost pro like market.  But Louisville, also lacks some of the tradition that the best football brands possess.  It will be interesting to see how the Louisville brand develops over time.

The lower part of the league includes Wake Forest, Boston College, Clemson, Miami and Virginia.  I’ll admit that I’m mystified by Clemson.  Brand equity moves slowly and there is a bit of a lag in the department of education data.  The key to building brand equity is high level success.  Clemson might be the ACC’s best hope for a premium football brand.  Or maybe Clemson is just an outlier and doesn’t charge high enough prices.  Clemson might be the one school on the list that deserves a deeper dive (but I’m not getting paid for this so…). Then there is Miami.  Over the years, I have done rankings across all the pro leagues and the college ranks. Florida teams often lag the field.  Maybe it’s the weather.  Maybe it’s the demographics.  Whatever it is, Miami just doesn’t generate the economic returns of a premier college football brand.

While I expect to take some heat for these rankings (GaTech over Clemson), the ACC illustrates how the model works.  We are evaluating brands while controlling for on-field success and investment.  This means that schools can rank high if the support they enjoy exceeds the support they might reasonably expect based on performance.

Ranking the SEC Football Fan Bases

The SEC is the dominate college football league at the moment.  Okay for the last 20-25 years.

The rankings prove the point with 5 of the top 10 teams coming from the SEC.  If we go farther down the list, the SEC has 7 of the top 12 or 9 of the top 18.  In terms of the league itself, Tennessee is the winner followed by LSU, Georgia, Auburn, Florida, Arkansas and Alabama.

The middle group of the league includes Texas AM, Ole Miss, and South Carolina.  The bottom group features Kentucky, Mississippi State, Missouri and Vanderbilt.

The best way to look at the SEC is in terms of these groupings.  Seven truly elite college football brands and a second tier that includes a very solid group of brands.

That’s all fine.  But after all these years I know what readers are thinking…  Especially readers in Alabama.

These rankings are crap!  The methodology is flawed!  You are looking at the wrong metrics.  What about applications and alumni engagement?! Professors don’t know anything about sports!  Emory should be embarrassed to have this guy on faculty!

Fair enough.

I will happily accept the statement that Alabama currently has the best college football program in the nation.  So why doesn’t Alabama lead these rankings?  One way to look at this is through a thought experiment.  What if we could transfer Alabama’s recent success to another team – What would happen?  What if Notre Dame or Texas or Tennessee had Alabama’s level of success?  How about Ole Miss or Oklahoma State?  It’s tough to say but that’s what I’m trying to get at by throwing a bunch of theory, data and statistical analysis at this topic.

I’d also like to add that there is no criticism of Alabama.  The “football” strategy might be optimal given Alabama’s position in the educational marketplace.  The football team is a great marketing asset and brings a lot of attention to the school.  Much is made of Nick Saban’s salary but if the investment was redirected away from the football program, where would it go?  Alabama has a great asset in its football brand.  It has the brand equity that comes from having a winning tradition.  And it makes sense for Alabama to use this asset.

At its core is this equity any greater than a lot of schools?  If the next coach at Alabama starts to have 7 or 6 win seasons is the passion still there?

The PAC 12 CFB Fan Rankings & Fair Weather Fandom

Sports and Weather?

Why is fandom a regional phenomenon?  I spend a lot of time analyzing fandom across leagues and cities.  I can’t help but to observe patterns (discovering patterns is actually kind of the point).  For example, if you ask me to compare the fan bases in Boston versus Tampa or Chicago versus Atlanta, I can tell you the better team brand without even knowing the sport.

Why some regions have better fan support than others, is a question for another day. Is it about team histories?  I’m sympathetic to this idea as I do believe that sports brands are built on a generational time frame?  Is it the demographics?  Maybe. I don’t want to touch the racial angle but we know that a city full of transplants is likely to have less intense fandom.  How about the weather?   Does Florida or Southern California weather deter fandom?  It probably doesn’t help. It’s the why go to the game when you can go to the beach explanation.  Fair weather fandom is more prevalent when the weather is, well, fair.

It is a tough problem because all of these factors matter.  And these factors probably interact (having a short history and nice weather is probably a double whammy).

The PAC 12 is the league that makes sense if it’s about the weather.  We have Oregon at the top followed by Washington, Utah, Washington State and Oregon State.  This seems to be the colder half of the league.  It might not be the best known of the football programs but it seems to be the best customer bases.

Oregon is interesting because it’s mostly known for innovative uniforms and Phil Knight.  Sort of classic branding.  Also some (relatively) recent success despite a few tough recent years.  It’s interesting because sports brands are usually built based on long-term success.  Washington is a solid program across the board.  The next three teams’ programs suggest that the league is a bit skewed.  It appears that the programs with the most potential tend to be the least prominent.

At the other end of the scale we have Colorado, Arizona, Arizona State, USC and UCLA as the bottom 5.  These schools are also located in the most appealing tourist destinations in the conference.

USC is the head turner.  An amazing tradition.  Championships and Heisman trophies.  But when you crunch the numbers the fans don’t show up like they do at places like Ohio State, Alabama and Texas.

College Football Brands and Fans – 2018 Edition

College sports inspires amazing passion and loyalty.  But which team has the most passion and loyalty?  There are lots of ways to look at this question.  Who has the most fans?  The loudest fans?  The fans most willing to travel?  It’s a debate where the participants can’t agree on the criteria for success.

One way to proceed is to flip the question.  When we talk about fandom, we are really talking about the relationship between teams and fans.  If we focus on the team side the way forward becomes a bit clearer.  On some level, college (and pro) teams are brands just like Apple or Coca-Cola.  If we cast the question of fandom in terms of brand strength, then we can turn a bar room debate into a marketing science based analysis.

Today we are going to take a look at college football brand strength.  We will start with an overall look at FBS schools and then dig into each conference in later entries.  The highlight of today is a Top Ten list and a Bottom Five list.

Interestingly (a good wishy washy academic word), it’s the top ten list that’s going to cause the trouble. I can already hear the hatred coming.  Shockingly, I can also predict the zip code for the hate (35401).

In a futile attempt to limit the hate, I’m going to start with some comments about the methodology.  The basic idea is to rate the college football brands using some ideas from the field of marketing analytics.  In most categories, we can look directly at the market place and come up with judgments of the strongest or best brands.  It gets a little tricky in sports because there is so much variability in team quality over years.  This is the key point – if we want to assess brand strength then we need to look beyond the simple metrics.  A full stadium for a winning team means less than full stadium for a team that is struggling.

The way I get to the final rankings is too boring for most fans so I’ll just give a broad outline.  I start from the notion that college sports teams can be viewed as brands.  While sports fandom is intense, conceptually it isn’t that different from consumer loyalty to brands in categories ranging from cars to soft drinks.  When we think of the team as a brand, we can use theory and methods used in industry and academia to take an analytical look at fandom across schools.

For this year’s study, I rely on three different measures of brand strength.  The first measure is based on the idea of a “revenue premium”.  One way to look at brand strength is to compare the revenues produced by two brands with similar quality.  The idea is that if we control for quality differences then the difference in the revenue can be attributed to differences in preferences for each brand.  In other words, we want to rate marketing place performance while “controlling’ for variations in team performance and other factors such as size of the alumni base or stadium capacity.  I calculate these revenue premiums by comparing each school’s reported football revenues with the revenues predicted by a statistical model that includes factors such as stadium capacity, alumni base, won-loss record and other school level attributes.

The second metric is a measure of ROI (return on investment).  ROI is related to brand strength because a stronger brand yields many benefits in the market.  For example, in the case of college basketball (I want to avoid using college football examples for a moment), we might expect the blue blood programs to be more efficient operations in terms of recruiting investments.  A less prestigious program might spend years building a relationship with a prospect to lose out if a last minute offer arrives from a Kentucky or Kansas.

The third metric is simply the relative football revenues reported by each school. We can probably think of this as a measure of pure market share.  I like to include a top level estimate of revenue because this measure says something about the scale of each brand.  The revenue premium metric is more focused on the intensity of fandom and the ROI measure captures some notion of brand efficiency. Top level revenue is a nice compliment to these measures.

To generate a single ranking, I use a statistical technique that identifies a single latent variable that drives the three brand equity rankings.  I’m happy to discuss the method in depth.  But the results are likely of more interest.  So who are the winners and losers?

 

The Winners

There is a lot of passion across a lot of campuses.  But when you crunch the numbers, one brand stands out.  The University of Texas Longhorns dominate the rankings.  Texas reports the highest revenues, achieves the best ROI and wins the revenue premium competition.  Even when Texas struggles on the field the football program delivers amazing economic results.

Texas is followed by Tennessee, Notre Dame, LSU and Oklahoma to round out the top 5.  These are all solid programs.  Programs that regularly appear on national TV and in major bowl games.  Tennessee has struggled in recent years but they deliver financial results and amazing attendance.  Notre Dame is a true national brand and might “still” be the team that most fans associate with college football.  The LSU ranking might surprise some folks outside of the SEC but LSU is a program with crazy passionate fans.  Oklahoma like Notre Dame is college football royalty.

In positions 6 through 10, we have Georgia, Michigan, Oregon, Auburn and Florida.  This is almost a good list. But, as I noted above, one program, in particular, seems to be missing.  Alabama finishes 12th.  Auburn at 9 and no Alabama?!?!  The methodology is flawed!  Why does Emory pay you?  Have you ever been to an Alabama game?  And now I have probably insulted Ohio State.

I’ll get back to Alabama in a later entry.  But, the key point is that we are looking at market place performance after controlling for team success.  I think the omission of Alabama is particularly brutal because Auburn finishes in the top ten in position 9.  The question that needs to be asked (and we will keep this in the SEC) is what would happen if Tennessee had a run like Alabama’s.  Would the Volunteer fan base be as intense as the Crimson Tide?  How about LSU?  Or Georgia?  As someone who has lived in SEC territory for the better part of the last twenty years I think the answer is yes.

 

The Bottom of the Power 5

At the bottom of the Power 5 we have Purdue!  Working upwards we then have West Virginia, Rutgers, Virginia, and University of Miami.  It’s an interesting list.  Probably not too many objections to teams like Purdue and Rutgers.  Purdue is in a tough sport for a football program.  It’s located in a small state that has multiple college programs.  It is also more of a basketball school.

Miami?  Miami is a storied program but Miami’s reported football revenues are nowhere what would be expected based solely on the team’s history of major bowl games.  And this is the key. We are not looking at team success.  We are focused on market place metrics relative to team success and investment.

The bottom of the list does raise some interesting questions.  Why do these schools fail to perform on the fan metrics?  Is it winning?  Miami has been an elite program at times.  Is it a lack of stars?  Purdue has a history of great quarterbacks from Bob Griese to Drew Brees.  Is it something about campus culture?  But Virginia and Rutgers would seem to be very different places?

It’s complicated and while winning is probably the key to developing a fan base, the factors that result in a less engaged fan base can vary.  Too much competition?  The weather is too nice?  It’s a pro town?

In some ways this whole fan base analysis is a great marketing case study.  One obvious path to success but many potential ways to fail.  And even if you do the right thing and win, sometimes it’s just not enough.

 

The Top Non-Power 5

The non-power 5 rankings are interesting in a variety of ways.  A lot of conference expansion and realignment was driven by access to TV markets (the Big Ten adding Rutgers).  But brand strength is another critical aspect (the Big Ten adding Nebraska).  The non-Power 5 rankings can help identify potential additions to the elite conferences.  I could almost imagine an approach similar to the relegation system used in European soccer – but the movement in and out of the top leagues would be based on brand strength.

At the top of the non-Power 5 list we have Boise State.  Boise is followed by University of Central Florida, North Texas, Wyoming and BYU.  North Texas is the eye-opener for myself.  But this is the beauty of taking a quantitative approach.  We are able to identify possibilities that our intuition might miss.

To listen to the 2018 College Football Fan Rankings podcast episode – click on the logo below.

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.

 

 

 

 

MLB Fan Marketing Report 2018

As we enter the 2018 season, it’s time to take a look at MLB from a marketing perspective.  Specifically, the goal today is to evaluate MLB teams in terms of fan loyalty and engagement.  Who has the best fans in Major League Baseball?  What are the best brands in MLB? These are simple questions without simple answers.  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 most?  Fans that are willing to follow a team on the road or via social media?

Even after we agree on the question(s), 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?   An analysis of fandom should account for short-term variations in on-field performance.  There is also the matter of differences across markets.  How do we compare fan behavior in a market like New York with fans in a place like Milwaukee?  What if a team just opened a new stadium?  Did the fans stream in to see the building or to see the team.

For the past few years, I have been studying fandom across professional and college sports.  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 cities fans are more willing to spend or follow their teams after controlling for factors like market size and short-term variations in performance.  The goal is to provide as much of an “apples” to “apples” comparison as possible.

 

The Best Fans?

It is possible to rank fans on many different dimensions. And different dimensions can have different meanings and nuances.  For today – I’m going to develop an “overall” ranking of fans based on three sub-rankings – Fan Equity, Social Equity and Road Equity.  Fan Equity is a revenue premium based metric that compares team’s box office results with league standards.  In other words, Fan Equity assesses how much fans are willing to spend relative to fans across the league.  I think of this metric as about “attend and spend.”  The KEY idea is that we measure “attend and spend” while controlling for team success and market characteristics like income and population.

  • Fan Equity is a great metric for assessing the CURRENT level of passion or engagement in a local fan base.

Social Equity is focused on the team’s social media followings (Facebook and Twitter).  Again, the rankings are based on how a team’s social media results compare across the league after controlling for team success and market.  Social Equity is also attractive in that the metric does not require fans to spend or to live in a local market.

  • The Social Equity metric provides insight into the team’s POTENTIAL fan passion.

The third metric is Road Equity.  This metric is based on a statistical model that looks at how teams draw incremental fans when on the road.  The KEY idea is that draw outside of the home market reveals something about a clubs national appeal. This passion can be positive (love the Cubs) or negative (hate the Yankees).

  • Road Equity provides a metric of passion beyond the local market.  A measure of NATIONAL brand equity.

I could go on.  In the past I have developed additional metrics related to win sensitivity or price sensitivity.  Willingness to attend even when the team loses probably says something about loyalty.  Fans that don’t watch a loser might be termed bandwagon fans.  Willingness to pay is a great marketing metric.  Willingness to pay to see a team that isn’t winning is another great indication of loyalty.  These metrics are available upon request (FYI, I don’t look at the comments so please email) but I want to keep this article brief.

So, we have three metrics with different pluses and minuses.  In the quest to find an overall winner – I’m going to take the simplest approach and average the rankings.  I don’t think this is the ideal approach, but it is simple. Simple is a great default.

 

The Winners

Overall, the group of clubs that comprise the Top 6 contains little in the way of surprises.  The Red Sox rank number one and are followed by the Yankees Giants, Dodgers, Cubs and Cardinals.  The Red Sox are perennially strong and finished third last year.  I sort of hate to say it, but Boston is probably the best sports town in America.

 

In general, the clubs at the top of the list share several traits.  They are all able to motivate fans to “attend and spend” as they all possess great attendance numbers and are able to charge relatively high prices.  More to the point, these teams are able to draw well and command price premiums when they are not winning.  The last few years excepted, Cubs are the best example of this.

The list of winners probably raises an issue of “large” market bias.  However, keep in mind that the methodology is designed to control for home market effects.  The method is explicitly designed to control for differences in market demographics (and team performance).  While the “winners” tend to come from the bigger and more lucrative markets, other major market teams do not fair particularly well (White Sox, Mets, A’s).  There is also a more subtle point.  The large market teams likely have the best fan bases because they often have significant histories of success and are often featured in the media. The topic of how these brands are built over time is another of my favorite things to talk about.  But, it’s a topic for another day.

 

The Laggards

The bottom of the list features the Marlins, Athletics and White Sox.  It is interesting that the bottom of the rankings includes teams from major markets such as the SF Bay Area, Chicago and Miami.  Being in a major market might be a double edged sword.  There are natural advantages in terms of building brand equity but there are also dangers.  Failing to succeed in a “large” market might be the worst possible situation (fan expectations?)

The Marlins finish is a reflection of how the team struggles on multiple dimensions. Attendance is often in the bottom 5 of the league despite being located in a major metro area.  Pricing is also below average for MLB.

From a branding perspective it is not surprising that we see one dominant brand in the cities with two clubs.  Being a sports fan is about being part of a community.  Many fans are drawn to the bigger and more dominant community – Yankees, Cubs, Giants or Dodgers rather than the Mets, White Sox, A’s or Angels.

There is also likely a story about consistency.  I chose an old school logo for the Sox.  I grew up in Chicago and the Cubs were always the same classic stadium and classic uniforms.  The Sox seemed to change things every season – new colors and logos.  I even have faint memories of the team wearing shorts on occasion.

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. Enjoy!

Listen to the full podcast episode here: https://soundcloud.com/user-444461821-683834833/major-league-baseball-fandom-episode-1

NFL Fan Base and Brand Rankings 2017

NFL Fandom Report 2017: The “Best” NFL Fans

Who has the best fans in the NFL?  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.

In past years, two measures of engagement have been featured: Fan Equity and Social Media Equity.  Fan Equity focuses on home box office revenues (support via opening the wallet) and Social Media Equity focuses on fan willingness to engage as part of a team’s community (support exhibited by joining social media communities).  This year I am adding a third measure Road Equity.  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.  We are just going to average the across the three metrics.  (similar analyses are available for the NBA and MLB).

The Winners

The top five fan bases (team brands if you prefer) are the Cowboys, Patriots, Eagles, Giants and Steelers.  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 (reported by ESPN) is more than 10,000 higher than the next team.  The Cowboys average ticket price is also well above average and they have the second most Twitter followers after the Patriots.  The other thing to note is that the Cowboys achieve these year in and year out , even in years when the team is not great.  

There are likely some objections to the list.  Patriot fans are bandwagon fans!  The Steelers are too low!  The Eagles above the Packers or Bears?!   Way too much to get into in a short blog post but a couple of comments.

First, Patriot fans may be bandwagon fans.  But at this point it is tough to tell.  The team has been excellent and the fans have been supportive for a long time.  And even when things tend to go wrong for the Patriots they come out ahead.  I believe that the deflate gate controversy had a significant positive impact on the Patriots’ social media following.

The Steelers are low in Fan Equity and higher on the other metrics.  We can trace this to the Steelers pricing.  The Steelers seem to price on the low side of what is possible.

The Eagle do surprise me.  They do get a bump from playing in the NFC East interms of the Road Equity metric.  The NFC East is a strong collection of brands that benefit each other.  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 brands.

The Losers

At the other extreme we have the Bengals, Jaguars, Titans, Rams and Chiefs.  Some of these are no surprises.  At the top of the list we have the NFL’s royalty.  No one has ever placed the Bengals, Jaguars or titans in that category.

The teams at the bottom of the rankings all suffer from relatively low attendance, have below average pricing power and have limited social followings.  The Rams are a special case.  While not a great brand in past years, the move to LA tends to punish the Rams because their results have not kept pace with the higher income and population levels in LA.

The Chiefs are the tough one on this list.  The Chiefs fill their stadium but at relatively low price.  Keep in mind that the analysis includes factors such as population and median income.  In addition, Kansas City was ranked 29th in terms of Road Attendance last year and the social media following (Twitter) is middle of the road.  The fundamental issue is that that the Chiefs produce these below average fan-based results while performing well above average on the field.

The Complete List

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

Three metrics are used to get a complete picture of fans.  But there are other ways to look at fan behavior and brand strength.  For example, we could look at pricing power (which teams are able to extract significant price premiums) or bandwagon fan behavior (which fans are most sensitive to winning).  I’m happy to provide these additional rankings if there is interest.

Fan Equity

Winners: Cowboys, Patriots and 49ers

Losers: Rams, Raiders, Jags

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.

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 great example of how the approach works.  On the field the 49ers have been terrible.  But 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, this “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 my 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.

Social Media Equity

Winners: Patriots, Cowboys and Broncos

Losers: Chiefs, Rams and Cardinals

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.  so 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.  Some 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: Cowboys, Eagles and Raiders

Losers: Texans, Titans and Seahawks

Another way to look at fan quality is to look at how a team draws on the Road.  In the NBA these effects are pronounced.  Lebron or a retiring Kobe coming to town can often lead to sell outs.  At the college level some teams are known to travel very well.  A fan base that travels is almost by definition incredible passionate.

This one has a bit of a muddled interpretation.  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 Yellow and Black was it because Steelers fans came down from Pittsburg or because the Steelers have fans everywhere.

Furthermore, if it is a national following is it because the team is popular across the country or because a lot of folks have moved from places like Pittsburgh or Buffalo to the Sun Belt.  A national following is a great characteristic that might suggest that a team’s brand is on an upswing.  Or it might be that the city itself is on a downward trajectory.

 

 

MLB Fan Base and Brand Rankings 2017

MLB Fandom Report 2017: The “Best” Fans in Baseball – Rough Draft

Who has the best fans in Major League Baseball?  What are the best brands in MLB? These are simple questions without simple answers.  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 most?  Fans that are willing to follow a team on the road or social media?

Even after we agree on the question(s), 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 Milwaukee?  What if a team just opened a new stadium?

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 variations in performance.

This year’s overall rankings are based on three sub-rankings.  In past years, two measures of engagement have been featured: Fan Equity and Social Media Equity.  Fan Equity focuses on home box office revenues (support via opening the wallet) and Social Media Equity focuses on fan willingness to engage as part of a team’s community (support exhibited by joining social media communities).  This year I am adding a third measure – Road Equity.  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 method possible.  We are just going to average the across the three metrics.

Today’s post is focused on MLB but if you are interested you can see last year’s NBA fan rankings here and this year’s  NFL rankings will be posted soon.

The Winners

Overall, the group of clubs that comprise the Top 5 contains little in the way of surprises.  The Yankees rank number one and are followed by the Cubs, Red Sox, Giants and Dodgers.  The Yankees “win” because they draw fans (usually top 5) and charge high prices even when on-field results dip.  The Yankees are also a great attraction on the road and have an enormous social media following.

In general, the clubs at the top of the list share these same traits.  They are all able to motivate fans to attend and spend as they all possess great attendance numbers and relatively high prices.  More to the point, these teams are even able to draw well and command price premiums when they are not winning.  The Cubs are the best example of this.

The list of winners probably raises an issue of “large” market bias.  However, keep in mind that the methodology is designed to control for home market effects.  The method is explicitly designed to control for differences in market demographics (and team performance).  While the “winners” tend to come from the bigger and more lucrative markets, other major market teams do not fair particularly well (see below).

The Laggards

The bottom of the list features the Marlins, Indians, Athletics, Angels and White Sox.  It is interesting that the bottom also includes teams from major markets such as LA, Chicago and Miami.

The Marlins finish is a reflection of how the team struggles on multiple dimensions. Attendance is often in the bottom 5 of the league despite being located in a major metro area.  Pricing is also below average for MLB.  Cleveland also struggles on these metrics but given the advantages of the Miami market, the Marlins relative performance is just a bit worse.

From a branding perspective it is not surprising that we see one dominant brand in the cities with two clubs.  Being a sports fan is about being part of a community.  Many fans are drawn to the bigger and more dominant community – Yankees, Cubs or Dodgers rather than the Mets, White Sox or Angels.  The A’s probably also suffer a similar set of problems as they compete against the Giants in the Bay area.

The Complete List

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

The Details

Fan Equity

The Winners: Red Sox, Yankees and Cardinals

The Losers: Mets, Indians and Marlins

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.

In terms of business concepts, this measure is similar to a “revenue premium” measure of brand equity.  It captures the differentials in fans 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.

However, the context is sports, and that does make things different.  At a basic level sports organizations have dual objectives.  They care about winning and profit.  That is important because some teams may not be trying to maximize revenues.  Perhaps the team is trying to build a fan base by keeping prices low.   If this is the case the Fan equity metric understates the engagement of fans.

The Cardinals are the big story in terms of fan equity.  St. Louis is a unique baseball town.  Amazingly supportive fans for a market the size of St. Louis.  The Cardinals just fall short on the other more national metrics.

Social Media Equity

Winners: Blue Jays, Braves, and Yankees

Losers: Mariners, A’s and Nationals

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 the Fan Equity metric, Social Media Equity is also constructed using statistical models that control for performance and market differences.  Social Media Equity is more about potential.  I think that social equity is an indicator of what can be built.  but teams still have to win to make the conversion.

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.  The Fan Equity metric focuses on local box office revenues.  In contrast, 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 take time while social media communities can grow quickly.  Social community size has been found to be positively correlated with future revenue growth.

A comparison of Fan Equity and Social Media can 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 teams have additional pricing flexibility.

This is an interesting list of winners.  My guess is that the Braves and Blue Jays are on the upswing as brands.  For the teams at the bottom – it’s a concerning situation.  These teams don’t seem to be capturing the next generation.

Road Equity

Winners: Yankees, Dodgers and Cubs

Losers: Marlins, White Sox and Indians

This is a new metric for the blog. One way to look at fan quality is to look at how a team draws on the Road.  In the NBA these effects are pronounced.  Lebron or a retiring Kobe coming to town can often lead to sell outs.  At the college level some teams are known to travel very well.  A fan base that travels is almost by definition incredibly passionate.

This one has a bit of a muddled interpretation.  If a team has great road attendance is it because the fans are following the team or because they have a national following?  If the Yankees play the Rays and attendance spikes is it because Yankees fans travel or because Tampa  residents come out to see the Yankees?

The winners on this list are no surprise.  One reason I like this metric is that it is consistent with the conventional wisdom.  It has tons of face validity.

At the bottom of the rankings we have the Marlins, Indians and White Sox.  These seem to be struggling brands that lack local and national appeal.