Note: These rankings are from last year. This summer, we are releasing new fan support rankings for the NFL, NBA, NHL, & MLB. We will have several measures of fan quality. Click here for more information, and here for MLB rankings.
The NFL is America’s favorite professional sports league, but which of its teams has the most loyal and supportive fan base? This is not a straightforward question. A ranking based on attendance would be skewed toward teams that play in more populated metropolitan areas, and a ranking based on profitability or revenues would be biased in favor of teams that are currently enjoying more on-field success.
In our series of fan base analyses across leagues, we adjust for these complicating factors using a revenue premium model of fan equity. The key idea is that we look at team box office revenues relative to team on-field success, market population, stadium capacity, median income and other factors. The first step in our procedure involves the creation of a statistical model that predicts box office revenue as a function of the aforementioned variables. We then compare actual revenues to the revenues predicted by the model. Teams with relatively stronger fan support will have revenues that exceed the predicted values, and teams that under perform have relatively less supportive fan bases. We provide more details on the method here and here.
The top fan base was the Dallas Cowboys. Professor Lewis grew up a Steelers fan in the 1970s so this was a bit of a painful result. Professor Tripathi grew up as a Redskins fan, and is terribly disturbed by the results of the study. What are keys to the Cowboys’ ability to create a passionate and supportive fan base? We think it’s a long legacy of success, a football mad Texas culture and a state of the art stadium. Over the last three seasons (the time period used to calculate fan equity) the Cowboys have played sub .500 football but generated above capacity attendance (at least according to ESPN).
In positions two and three we have the New England Patriots and the New York Jets. New England has an all-around strong fan base, while the Jets are somewhat similar to the Cowboys in that they draw consistently well, regardless of the on-field product. In fourth and fifth place we have the New Orleans Saints and the New York Giants. The Saints are a more recent success story, but the team’s new success combined with limited professional sports options in New Orleans has created a very strong fan base. Two New York teams in the top five is an interesting result when viewed in relation to our college football fan base analyses. New York is (no surprise here) a pro sports town. As an aside, we will be interested to see how much value the Big Ten gains from acquiring a foothold in the NYC market starting in 2014.
At the more unfortunate end of the scale we have a bottom five of Detroit, Tampa Bay, Arizona, Atlanta and Oakland. Detroit, of course, suffers from a relative lack of on-field success and a struggling local economy. But we should note that our method does explicitly control for these factors. It may well be a matter of the Wolverines & Spartans winning the battle for fans against the Lions. Similarly, teams like Atlanta and Tampa Bay may suffer from being located in SEC territory.
More on our Rankings…
Last week we presented our ranking of NFL fan bases. The Cowboys, Patriots, Jets and Saints headed this list, and every other city in America let us know that our study was garbage. As in any study of this nature, there will always be limitations that leave room for debate.
One such source of debate is in how much data we use for assessing fan equity. We use 11 years of data to develop a model for forecasting expected consumer demand (the forecast is based on winning percentage, pricing, stadium capacity, metro area population, metro area median income and other factors). We then determined fan equity (fan loyalty and support) by comparing the model forecasts to each team’s last three years of results.
One important question is whether three years is sufficient. In our minds three years is a compromise. An argument in favor of a lengthier time horizon is that fan loyalty is a persistent trait that moves slowly. If this is the case, it might make sense to look at relative performance for the last five or ten years of data. On the other hand, the world is constantly changing and evolving so it also makes sense to focus on recent history. In the case of sports, if championships and post season success are the sources of long-term fan equity then using a shorter horizon that is sensitive to near term changes makes sense.
The top five for the last the last decade would be New England, Washington, Kansas City, Denver and Pittsburgh. This list will likely make other fans happy but it will still result in significant unhappiness in Green Bay. Later this week we will discuss in more depth why some of the teams that conventional wisdom would suggest to be at the top of our list fell short.
We can also look at who is rising and who is falling. For this analysis we compare the fan equity rankings using the first 3 years of the data (2002 to 2005) with the last three years (2010 to 2012). The analysis finds that the biggest risers were the Cowboys, Jets and Colts. The four biggest drops were the Chiefs, Buccaneers, Rams and Redskins. This list shows both the pros and cons of using short versus long horizons. The short horizon allows us to capture the long-term impact of what Peyton Manning delivered the Colts and the importance of the Cowboys’ new stadium. On the negative side, the early success of the Rams and the Bucs seems to have turned out to be short lived.
There is one other element of the preceding list of teams that have suffered a decline in fan equity that may raise some eyebrows. Two of the teams that suffered dramatic drops have Native American oriented team names: The Chiefs and the Redskins. Over the last decade we have witnessed an increase in efforts to eliminate Native American team names and mascots. Lewis is an Illinois grad and Tripathi is a Redskins fan so they know firsthand how a mascot controversy can split a fan base. There are, of course, alternative explanations for why these two teams’ fan equity has decreased (but keep in mind that we do control for team performance) but it is at least noteworthy that two of the four teams with the biggest drops have controversial team names.
NFL Fan Equity: Method Limitations and Focus on the Falcons
Our analyses frequently generate criticism. Our work has been described as “garbage,” “silly” and “annoying” (and this is just from Mike’s wife). To us, one of the most interesting things about this project is that we are often surprised by whom we offend. In the case of last week’s analysis, we were humored by the fact that Saints fans seemed equally interested in their 4th place ranking and the Falcons’ 31st place ranking. Given that we are based in Atlanta, we thought it would be a good idea to discuss why the Falcons finished so low and, more importantly, how these results should be interpreted.
Our starting point in these analyses is that we are evaluating fandom from a marketing perspective. This means that we are trying to identify which customer base is the most loyal in terms of their willingness to support their team through buying tickets. This may seem like a crass measure to some, but it is at least an objective and observable metric. Most critics seem to want us to somehow read the minds of the fans, and make ratings based on “passion.” This is a fine notion but the implementation is somewhere between difficult and impossible. Difficult, because a large scale survey would be needed to ask fans questions about how passionate they are, and nearly impossible because the survey would need to be repeated year after year to control for variation in team quality.
Our method, like all methods, has some limitations. In our case, two limitations are most notable. First, we rely on publicly available data (FCI pricing data, ESPN attendance estimates, Forbes’ team value estimates, US Census data, Title IX reporting data, etc.). Publicly available data (and private data) will always contain inaccuracies. The real question is whether the publicly available data is inherently biased against certain teams or types of teams. We are happy to listen to debate about this issue.
The second limitation relates to a team’s marketing objectives. One issue in sports marketing is that we do not get to observe true demand due to the constraints imposed by stadiums with finite capacities. For this reason, we primarily rely on estimates of revenue. This is an important distinction because it means that we implicitly make an assumption about how teams price. The implicit assumption is that teams are attempting to maximize revenues.
You can definitely criticize this assumption. This assumption comes into play when evaluating teams that regularly sellout (e.g. Green Bay). How can these fans be any more loyal? This leads to the question of why don’t teams like the Packers price higher. I can think of a couple of potential answers. One, perhaps they don’t have enough information or expertise to maximize revenues. Demand forecasting for an NFL stadium is a non-trivial task. Historical data is of limited use because demand for certain types of seats is censored. The variation in the quality of tickets is also a problem as revenue maximizing teams would also need to understand the cross-elasticities across ticket types.
But the salient question is: if not a revenue maximizing assumption then what? The best answer, we believe, is that some teams may systematically underprice in order to build or invest in their customer base. The logic is that because the team lacks an extended tradition of success or that the team competes locally with other sports offerings, it makes sense to charge below market rates to get people into an exciting, sold-out stadium. Of course, as more astute readers may have noticed, this explanation is also consistent with the story that the team lacks brand equity. We could also make arguments that some team price too high and may therefore be “harvesting” brand equity.
This brings us back to the case of the Atlanta Falcons. The explanation for why the Falcons finished low despite recent success on the field and in terms of sellout attendance is because they price lower than would be expected. According to the Team Market Report’s fan cost index, over the last decade the Falcons have tended to price below the league average. But it isn’t sufficient to just consider relative prices. We also need to consider the “quality” of the market. The Atlanta metro area has population and median income levels that are well above the league averages.
The other issue that was mentioned locally is: what does this mean for the Falcons’ quest for a new stadium? A case can be made that our findings support the need for a new stadium. If we believe the assumption that professional sports are an important civic asset (because they draw attention, create economic value, enhance the culture, etc.) then it makes sense for the city to invest in the team. The Falcons’ have a relatively short history, and play in a city full of transplants. Just as the Falcons may be underpricing in order to develop their fan equity, it may make sense for the local community to also invest back into the team.
NFL Social Media Equity
Our approach to NFL fan equity begins from the premise that teams try and maximize revenues. This is an important assumption, and one that one that seems to be justified by teams pursuing practices like dynamic pricing and personal seat licenses. But, if a team is pricing below what local market conditions would allow, our method can be problematic because NFL stadiums are of finite capacity.
What we would ideally like to have is a fan metric that is not constrained by stadium sizes. The world of social media can provide this type of metric. In today’s installment we assess NFL fan base quality using information on teams’ ability to acquire Twitter followers.
The simplest measurement of social media strength is to look at Twitter follower counts across teams. Using this metric, the top 5 teams are the Patriots, Cowboys, Jets, Steelers, and Packers. The bottom five includes the Titans, Buccaneers, Rams, Jaguars and Cardinals. While gathering this data we did come across some interesting results. The Patriots lead the league with about 650,000 followers while the Cardinals are in 32nd place with 62,000 followers. Notably the Cardinals had only 31 more followers than the Cowboy Cheerleaders.
But as always, the raw numbers can be deceiving. The Jets play in a market that dwarfs the Steelers, and Twitter success is probably highly correlated to teams’ recent on-field success. To calculate “Social Media Equity” we start by building a statistical model that predicts Twitter followers based on team winning percentage from 2012, market population and median income. We then compare this prediction with the actual follower count. The difference between actual and predicted followers provides a measure of over or under performance in the social media space. Note: We could also have used Facebook fans for the analysis.
In terms of this measure of “social media equity” the top 5 were the Steelers, Cowboys, Patriots, Packers and Saints (and the Jets in 6th). In terms of our previous fan equity ranking, the biggest change was for the Steelers and Packers. The Cowboys, Patriots, Saints and Jets were strong in both rankings. In terms of the critique that some owners may systematically underprice, the Steelers and Packers seem like two of the most likely candidates.
At the other end of the list in last place are the Arizona Cardinals. The Cardinals play in a larger market than the Steelers but only have 11% of the Twitter followers. Another notable bottom dweller is the Redskins. The Redskins play in a large market but have less than half the Twitter followers as do the Cowboys.
We have noted the advantage of using Twitter followers as a metric. This measure is not constrained by stadium capacity and fans are able to show there interest without an economic sacrifice. However, this measure could also be criticized. For example, if the goal is to assess fan passion or loyalty it is not clear how correlated an unobservable trait such as loyalty will be with Twitter follow rates. A second issue is that teams may invest different levels of resources into their social media efforts. If team A emphasizes their Twitter handle in ad copy while team B does not, then a straight comparison can be misleading. A third issue is that the data available for this type of analysis is very limited. While attendance rates are observable for decades, social media data is a very recent phenomenon.
Mike Lewis & Manish Tripathi, Emory University 2013.