A Non-Judgmental Analysis of the NFL Rating Decline

Over the last week there has been a lot of discussion regarding the decline in NFL ratings this season.  The facts seem to be that the NFL is experiencing a weakness in prime time games that has resulted in an 11% drop in ratings.  The NFL has circulated a memo that cites a variety of factors such as the presidential campaign.  Notably the memo states that there is no evidence that “concern over player protests is having a material impact on our ratings.”

I have gone on record in multiple articles over the past few years talking about the likely impact of high profile or controversial events such as domestic violence incidents and concussions on NFL fandom.  My opinion has been that the NFL would continue to be strong and fans would continue to watch.  So what’s different now?  On this blog, the emphasis is almost always on data driven analyses.  In this case, it’s not possible to take that approach.  I would need much more detailed data on TV ratings and even then I likely wouldn’t have the ability to rule out different possible causes.

The NFL has suggested a confluence of events as the culprit.  I think this is true but perhaps not in the manner the NFL is implying.  I think the NFL is right that the presidential campaign is having an impact.  But I suspect it is having less of a direct impact due to people’s attention being shifted in a different direction.  College football does not seem to have experienced a decline in viewership.

I think it is the nature of the current political campaign and the emotions the campaign is generating.  This campaign has highlighted very distinct cultural differences.  The world views of Trump and Clinton supporters seem to be fundamentally different.  The potential problem is that a lot (majority?) of the NFL’s fan base may lean in the Trump direction while the protests lean in the Clinton direction.  In what follows I’m going to talk about this situation on a theoretical level.  I am making no value judgments about any protests or response to protests – I’m just looking at the marketing and branding issues.

Why are the protests potentially damaging to the NFL brand?  I think there are a couple of related issues.

First, the NFL has been known for shutting down individual expression by players.  Remember it is the No Fun League and it’s all about protecting the shield (brand).  Now, however, we seem to have a protest that is allowed.  And it is a protest with which many fans may disagree.  On some level the NFL seems to be changing its policies to accommodate the protests.  I think it is this “change” that may be the key issue.  Especially if the “change” is to accommodate something that is controversial to the core audience.  If a league is known for shutting down everything from TD celebrations to minor uniform violations then is not shutting something down an implicit endorsement?

The stridency of the current presidential campaign in terms of insiders versus outsider and political correctness makes this type of “authenticity” issue especially salient to certain segments of fans.  The impact may be  subtle.  It may manifest as a softening in enthusiasm or engagement with the NFL brand rather than a decrease in stated preference.  Fans still like the game and the players but maybe they are just not as compelled to watch.  (I don’t have access to the NFL’s data but this may be a tricky issue to assess using traditional marketing research techniques.)

The second, and related issue, is that there are other factors impacting the brand.  The current protests occurred in the wake of seasons that featured domestic abuse and the concussion issues.  The NFL brand may be resilient to any one event but over time problems can weaken the foundation.  This type of subtle brand weakness may be especially relevant given that the NFL is currently lacking some star power.  While the NFL is less of a star driven league than say the NBA, having Peyton Manning retired and Tom Brady suspended makes the league more vulnerable.

 

LeBron Saves the Heat (and the NBA?)

We have seen a number of articles and social media activity speculating about the NBA’s desire to have Miami advance to the NBA finals.  It’s a nervous time for the NBA because the other 3 teams in the conference finals are from “small” markets.  In some ways, the success of small market teams is a welcome outcome as all professional leagues tend to be nervous about large market dominance resulting in competitive imbalance, but the overwhelming short-term concern is obviously about how this situation will impact the television ratings for the final.

We have seen speculation about the impact of having small market teams such as Indiana, San Antonio and Memphis in the finals, but not a great deal of analysis.  To fill this gap, we have developed several statistical models that forecast TV ratings as a function of the characteristics of the two teams who are participating.  As a starting point we collected data on market population, winning percentage, home attendance, pricing, road attendance, and the number of All-star game starters and reserves for each team participating in the NBA finals over the last several years.  In this case, we have only a limited number of data points, so the key to the analysis is in identifying which of the variables are the best predictors.

We tried a great many combinations of the previously listed variables and found that the two best predictors were the sum of the two participants’ home box office revenues and the number of All-star game starters participating in the seriesA model with these two variables yielded an R-squared value of 0.53, and both explanatory variables had t-stats with p values of less than .05.

Our speculation is that combined home revenue captures the market size and fan intensity of the two teams.  This metric seems to be much more effective than population simply because not all large market teams are equivalent draws.  For example, in LA, the Lakers are a more powerful brand than the Clippers, and in New York, the Knicks have dominated the Nets (let’s say the New Jersey Nets to avoid any additional angst from the Brooklyn contingent).

We also found that All-star starters was the right metric rather than total All-stars.  In hindsight, this is also an intuitive finding.  The NBA has long been known as a “Star” driven league.  In fact, if you look back in history, the Michael Jordan era had amazingly high ratings compared to the last decade.  Based on the data, it appears that finals ratings are driven by the number of extremely high profile players.

In the tables below, we report actual ratings for the last six finals and our model’s predictions for the possible NBA Finals matchups.  As expected, the most promising matchup is Miami versus San Antonio.  What are really notable are the predicted ratings for the least promising matchup.  We predict that an Indiana – Memphis matchup would result in an epic failure in terms of ratings.

As a reality check for our prediction, consider the most recent finals matchup of small market teams.  In 2007, San Antonio defeated Cleveland, and the finals achieved a 6.2 rating.  While this number is much higher than our prediction, the San Antonio and Cleveland series had a significant advantage relative to an Indiana-Memphis matchup.  The difference was that the Cleveland and San Antonio series featured LeBron James and a Tim Duncan still close to his prime.  These types of stars would be sorely lacking in a Memphis – Indiana series.  This is, however, not a criticism of the Grizzlies or the Pacers, but more an indictment of how the NBA markets itself.  The NBA’s practice of emphasizing a few marquis players means that ratings will suffer when teams without these high brand-equity players make the finals.

The other problem for the NBA is that fans also understand the league’s dilemma.  This means that a meaningful percentage of fans believe that the NBA clearly prefers a series that features Miami.  This is a significant problem if fans believe that marketing considerations influence outcomes.

Mike Lewis & Manish Tripathi, Emory University 2013.

Watching for Brand Giants in the Elite Eight

Each year, the second weekend in the Men’s NCAA Basketball Tournament gives us eight teams competing for spots in the Final Four.  One might assume that match-ups between the top college basketball brands will be correlated to the highest TV ratings; however our analysis of Nielsen TV ratings, team match-ups, and brand equity dismisses this conventional wisdom.

We analyze Elite Eight data from 2010 to 2013, and find that metrics at the match-up level such as the combined brand equity of the two teams or the difference in brand equity of the two teams have a negligible correlation with TV ratings (less than 0.1).  Thus, from a brand perspective, the match-up of two Goliaths or the David versus Goliath match-up does not seem to be correlated with viewership. Rather, it seems that on a given Elite Eight Saturday or Sunday, when there are four teams playing, there is a significant positive correlation between the highest brand equity team and TV ratings, and a significant negative correlation between the lowest brand equity team and viewership.

A possible explanation for these findings is that Elite Eight viewers look at the full set of teams playing on a given day, and are drawn-in by strong brands, but put-off by weak brands.  These findings also seem to possibly indicate that given viewership preferences, it is really difficult for a low brand equity college to improve its brand.