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

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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

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The Big 12 Brand Rankings, Competitive Balance and Conference Realignment

Conference realignment was a hot topic a few years ago.  The Big Ten grabbed Nebraska, Maryland and Rutgers.  The ACC grabbed a big chunk of the Big East.  A lot of these changes were driven by marketing considerations.  Maybe all of these changes were driven by marketing considerations.  The goal was always to acquire football brands that either had great brand equity or provided access to new media markets.

The Big Twelve was continuously raided.  They lost a historical power in Nebraska to the Big Ten.  A Colorado team that provided access to a solid media market fled to the PAC 12.  Texas AM and Missouri took off for the SEC.

While much of this movement was driven by the dollar, it does raise some questions and concerns about competitive balance.  Competitive balance is thought to be important based on the theory that fans prefer competitive events and that every team needs to have a shot at winning a title (at least now and then).

Moving forward, the Big 12 may have more marketing and competitive imbalance than the other Power 5 conferences.  Texas might be struggling on the field but long-term it’s hard to imagine that Texas’ revenue advantages won’t leave the Longhorns the dominant program.  In terms of marketing, while cable TV deals are fading in importance, the Big 12 footprint leaves the league at a disadvantage.  It’s also a league where a single school probably dictates the league’s future.  A move of Texas to the Big Ten or PAC 12 probably finishes the league.

In terms of the Big 12 fan bases, the league is headlined by Texas and Oklahoma.  These two elite brands are followed by Oklahoma State, Texas Tech, and Kansas State.  The bottom half of the league includes Iowa State, TCU, Kansas, Baylor and West Virginia.

In some ways this is a tough league to love.  It’s incredibly top heavy in terms of football and its standard bearer has struggled in recent years.  It’s also a geographically limited league with so many teams in Texas and Oklahoma.  This is a league that could really use a little more brand power.  Of course, it’s hard to imagine where that would come from with the loss of schools like Texas A&M and Mizzou.  Boise State and UCF?

Postscript: I’ve been doing fan base / brand rankings for half a decade or so.  One observation is that the fans and brands at the top of each list do not respond with much more than a satisfied “of course.”  At the bottom is often a different story.  In the NFL, the Raiders fans are the angriest.  They often go straight to threats of violence.  Cleveland fans are the funniest.

When I posted the overall college football brand rankings, I learned something about the West Virginia fans.  These folks have a lot of passion about their fandom.  This passion created a lot of complaints about me and my personal failings.  If I ever do a list of the angriest fan bases, West Virginia will be up there.

However, within all the hate there is an important point.  These rankings are based on decades of data, careful statistical models and marketing concepts that are used across a wide variety of industries.  But, the haters are correct.  No ranking is perfect.  This one is driven by financial results and I have never seen a ranking with anywhere near the rigor.  But it is also limited.  At the end of the day, a fan’s passion is something that we can never truly observe.  Maybe West Virginia has a different business model than other schools (brand equity building rather than revenue maximization), or maybe West Virginia uses different accounting assumptions.  This is a good faith analysis that uses the best data available.

For the aspiring analytics professionals, there is one final lesson.  You do the best analysis you can.  And then you look at the results.  And sometimes the analysis becomes a springboard for taking a deeper dive.  This might be one of those times.  A follow up analysis on the puzzle of West Virginia would be a valid follow up.

Big Ten CFB Rankings & College versus Pro Fandom

The Big Ten rankings start with the University of Michigan.  A passionate fan base that fills a massive stadium even when losing to the teams ranks 2 (Ohio State) and 3 (Michigan State).  In positions 4 and 5, we have Nebraska and Penn State.  It’s an interesting aside that the Big Ten has most of its premium brands concentrated in one of its divisions (East).

In positions 6 through 10, we have Wisconsin, Iowa, Minnesota, Illinois and Maryland.  Seems about right.  Full disclosure – I’m an Illini.  Next we have Northwestern.  I did my PhD at NU and I don’t think I ever met a true NU fan.  We then have Indiana (basketball school) and Rutgers.  Purdue rounds out the league.

I’ll be interested to hear the complaints about this ranking.  OSU never wants to be behind Michigan.  And I could see some objections to Penn State and Nebraska trailing Michigan State.  The relative rankings of some of the recent additions does raise some questions.  Were Rutgers and Maryland the right moves?  As the importance of cable television wains over the next decade, the East coast expansion strategy may be less relevant.

College versus Pro Fandom

At the level of the individual fan, I suspect that college fandom is often even deeper than professional fandom.  Students and Alumni are directly connected to their teams.  When college fans say “We” they are talking about an institution to which they permanently belong.  In the case of the “Pros”, the fan often “just lives there.”  This isn’t always the case and pro fandom can be intense and borderline crazy.  In the past when people tended to be less mobile (and ordinary fans were not priced out of stadiums), affinity for and connection to a team may have started before kindergarten and been a lifelong affair.

When I publish my NFL fan base rankings I get some very aggressive hatred (Go Raiders!).  There are towns where pro fandom dominates.  Chicago is one such town.  It’s a Cubs and Bears town (and sometimes Bulls).  And the college teams (at least when I used to live there) get a lot less media.  It’s an aside, but DePaul basketball would be a fascinating case study as a college team that had and lost a significant media presence.  I also believe that Illinois is something of a “sleeping” brand equity giant.  On the unfortunately rare occasion when Illinois sports are relevant they are able to have an impact in Chicago.  In sports brand development, winning big is key but consistency also matters.

Everyone in Chicago can affiliate with the Bears or Cubs but it almost feels a little artificial to root for a school that you did not attend.  But at the level of the individual fan being a graduate or a school results in a deeper affiliation than being a resident.  The marketing challenge is how to leverage this natural fan base to come up with an aspirational brand that attracts non-attendees (and potential future students).  The Chicago metro area has a population of more than 9.5 million while I’m guessing that the Urbana-Champaign alumni base is less than half a million spread out across the globe.

A problem with any discussion of fandom (on the internet) is that we are talking about the “average” fan.  And we always have the classic problem that fandom varies with team performance.  I’m an Illini so I can speak to how fan passion changes over time.  As a student in the 1980s the football team was solid and the basketball team was great.  The Flying Illini were the best team in the country in 1989.  Don’t care that they didn’t win it all. It was easy to be a fan of the Flying Illini.

But the 1990s brought a collapse of both the football and basketball programs and I admit I tuned out.  But then we had Bill Self, Frankie Williams, Dee Brown, Juice Williams, Ron Zook, an NCAA finals appearance and a trip to the Rose Bowl.  And I was back in.

Now we are back in the wasteland and I’m tuning in less and less every year.

But, if they turn it around, I’m almost sure that I’m back in.  I think what the college affiliation ultimately provides is a reduction in fair-weather fandom.  If the Illini go 500 in football, I’m tuning in to see the Kraft Fight Hunger Bowl appearance.  And I’m in for the next year.

This goes to the heart of the pro versus college fandom issue.  With “my” school I’m more resilient to mediocre or even poor performance.  Even now I follow recruiting for both Illini sports and tune in to a lot of first halves.  It also takes less for me to become fully engaged.  A 7 and 5 year with competitive games and I’m watching everything I can find.  Being an Alumni is forever and it’s often a key part of someone’s identity.

For the overall college football fan rankings, click here.

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.

 

Amateur Sports and Brands

HBO Sports recently created a detailed report on the IOC.  The RIO Olympics do not come off well.  Pollution, doping, corruption and athlete exploitation are at the top of the list.  It is a fascinating story that seems to play out with each Olympic Games.

This issue of fair compensation for the athletes is high on the list. The number discussed in the report was $4 billion.  The question is whether and how this money from rights fees and sponsors should be allocated to the athletes.  Is (and should) there be an Olympic Ed O’Bannon?

In many respects this starts to sound like the debates about college sports in the US.  These debates are usually cast in terms of fairness.   to the athletes versus arguments about the purity of the sport or appropriateness of academic institutions running pro teams.

These debates are at best incomplete without considering the role of marketing and brands.  While college football players supply the product, the brands owned by the colleges or the Olympics is what drives fan interest.  Leonard Fournette is a Heisman favorite and a huge star.  But does he draw fans to LSU.  the truth is he probably doesn’t (in the short-term).  In the long-term its stars like Fournette that create the brand equity. 

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Likewise, in the case of the Olympics – we could ask how much interest in driven by the current athletes?  and how much is driven by the attachment people have to the Olympics (the brand).

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I think (in the US) the Olympic brand is about Carl Lewis, Bruce Jenner, Mary Lou Retton, Jesse Owens, Cassius Clay or many others.  It remains to be seen who from the current crop breaks out.

The real problem, I believe is one of equity.  This is true in both college sports and the Olympics.  The fundamental issue is who gets to harvest the value of the brands.  The problem – to many folks – is that this seems to just end up being the people that control the institutions at any one moment.  The athletes that have built the brands (the stars of the past) and the athletes that create the product (this years athletes) tend to get left out in the cold.

 

Ranking American Sports Cities: The Top “One Team” Markets – Candidates for Expansion Teams?

Over the last 9 months we have looked at fan support across the 4 major US professional sports leagues using a variety of financial and social media metrics.  The thing that sets our  evaluations of fan support apart is that we focus on observable, objective measures of support AND we control for factors related to market size and team quality.  Our measures are therefore not biased towards large cities and we adjust for the bandwagon nature of fans in markets with teams that are currently winning.

To end the year, we are putting all of these rankings together in order to create a ranking of cities.  For this list we combine our revenue premium based fan equity measure with our social media measure.  To combine these we assume that a social media follower or like is worth $1.  Today we begin our list of the best and worst one team sport towns (cities that have a professional team in only one of the four major sports).  The set of single team sports towns includes Columbus, Jacksonville, Memphis, Oklahoma City, Orlando, Portland, Sacramento, Salt Lake City and San Antonio.

#1 Portland

The number one small market (only one professional team) sports city is Portland.  Portland provides exceptional support to the Trail Blazers.  In terms of the fan equity measure the Trail Blazers ranked 4th in the NBA and the social media ranking was 11th.

According to the US Census, the Portland metropolitan area is the 24th largest with a population of almost 2.3 million.  But despite this mid-level population base the Trail Blazers had the 4th highest attendance in the NBA last season and the second highest in 2012.  Notably, this support occurred despite the team missing the playoffs in each season.  The attendance also was NOT generated by deep discounts as the Trail Blazers price at just below the league average.

Our analysis suggests that the Portland market has a great deal of potential.  The population base is decent, median income is above average and the fans seem to be extremely supportive.  We know that there has been some interest in trying to attract an MLB team to Portland.  With the number of struggling franchises across all the major leagues, it is somewhat surprising to us that Portland isn’t mentioned more frequently.

#2 Sacramento

The Sacramento market’s 2nd place ranking was a bit of a surprise.  Sacramento just doesn’t ever seem to be top of mind when we think about sports cities.  The most recent time Sacramento has really been in the news was during the controversy surrounding the proposed sale of the team to a Seattle based group.

The Kings have struggled in recent years.  The last two years’ annual attendance rankings have been 30th and 27th.  But we need to consider that these attendance numbers have occurred in seasons when the team has played well below .500 basketball.  If we go back a few years to when the Kings were winning, the team was able to generate consistent sell-outs.  When we run our analysis over a ten year period the Kings end up with a fan equity ranking of 6thWhat this means is that Sacramento fans are well above average in terms of supporting their team.  If the Kings are reasonably successful then our data suggests that the fans will turn out.

The Sacramento market has a population of more than 2 million and a respectable median income of more than $46,000.  These demographics are favorable to many small markets so it is a bit surprising that Sacramento has been in danger of becoming a “zero” team market.

#3 Salt Lake City

Salt Lake City is our number three “one sport” city.  Salt Lake City is a small market with a population of just 1.1 million but the metro area’s median income is a solid $48K (ranking 21st).

The Jazz rank 11th in our NBA fan equity ranking and 19th in the social media ranking.  These rankings are not surprising.  The Jazz has been a very successful franchise with notable players such as John Stockton and Karl Malone.  But recent seasons may not be meeting fan expectations causing the relatively poor social media results.

Based on the metro area population we don’t know that the city could support multiple pro franchises but Salt Lake City is a tremendous “one sport” city.

#4 San Antonio

Now we are getting into the “good” one team cities, but my guess is that folks in San Antonio will be upset by a 4th place finish.  This is the beauty (or enraging) part of our rankings.  When we assess revenue or social media we explicitly control for team performance.  This is important because it is obviously easier and more enjoyable to be a fan of a team that is winning.  It is also likely that fans are willing to pay more for a winning team.  The goal of our rankings is to get at the underlying passion and support of each city’s fans.

The Spurs ranked 10th in our NBA fan equity measure and only 24th in social media.  This is a very solid showing on the fan equity metric.  In terms of social media, San Antonio is an under performer. Based on the San Antonio market’s demographics and the Spurs on-court success our model suggests that the Spurs should have an additional 1.7 million Facebook Likes and Twitter followers.  In other words, in comparison to other NBA teams’ social media communities the Spurs fall short of what is expected for a market with San Antonio’s population and the Spurs’ winning rate.

#5 Orlando

The number 5 city on the list is Orlando.  While many observers might question the intensity of the Magic fans, the numbers tell an interesting  story.  For example, last season the Magic won only 24% of their games.  However, despite this futility, the team reported a 93.4% attendance rate.

Orlando also has a relatively rich history for a newer team. In addition to two conference titles, the team has featured notable players such as Shaquille O’Neal, Tracy McGrady and Dwight Howard.

Within the NBA, the Magic rank 17th in terms of fan equity and 21st in social media equity.  As we noted below, Florida teams tend to struggle in our rankings.  Demographically Orlando is a decent market with a population of over 2.2 million.  However, while the Magic doesn’t compete with other pro teams, the Magic does face tough competition. In the case of Orlando, pro sports compete with the weather, golf and the mouse.

#6 Oklahoma City

Oklahoma at number 6 may be a bit of a surprise. The Thunder has enjoyed recent success, Kevin Durant is a marquee player and over the past few years the team has usually played  before a packed arena.  But the sellouts have only been achieved as the team has become a winner.

Our analysis explicitly controls for bandwagon fans.  After controlling for winning percentage and market characteristics we find that the Thunder ranks 19th in terms of revenue based fan equity and 15th in social media equity.

From a marketing perspective, the Oklahoma City NBA franchise made an interesting decision to drop ties to the team’s previous incarnation.  Typically, the belief is that the previous brand contains some value.  By keeping names like the Jazz or Colts some connection to historical achievements is often retained. We should note that we don’t know why the Sonics name was dropped – perhaps this was negotiated with the city of Seattle.

On the plus side, our analyses also confirm that the key to building fan equity is a tradition of winning.  The Thunder has not gotten over the hump but they have made strides.  We also suspect that the social media results are a leading indicator for fan equity.   

#7 Columbus

Columbus finishes #7 on the list of one team towns.  Columbus is the 32nd largest metropolitan area by population and the 57th ranked based on median income.  In terms of our rankings the Blue Jackets ranked 23rd in the NHL based on revenue premium based fan equity and 29th for social media equity.

The Blue Jackets were founded in 2000 and they therefore lack the multi-generation history of other franchises.  The team has also struggled on the ice as it took 9 years for the team to reach the NHL playoffs.  As such it’s not surprising that Blue Jackets are below average in terms of fan support.  Of course, the real issue with the Columbus market is that it is dominated by Ohio State sports.

#8 Jacksonville

The state of Florida is an interesting situation for professional leagues.  The state population has boomed and college sports have great following.  However, almost all professional franchises have struggled and many believe that the pro leagues have created too many Florida teams.  In terms of key demographics, Jacksonville ranks 82 in median income and 40th in population.  This is a bad combination of population and income given that the average ticket price in the NFL exceeds $80.

Within the NFL, the Jaguars ranked 27th in terms of revenue premium based fan equity but the team did score a much healthier ranking of 17th for our social media measure. It’s not surprising that Jacksonville ranks low as a market given these marginal demographics, a lack of franchise history and stiff competition from college teams. 

On the plus side, Tebow is still available.

#9 Memphis

In last place on our list we have the city of Memphis.  The Grizzlies are the only pro game in town.  Within our NBA rankings the Grizzlies were ranked 25th in terms of revenue premium based brand equity and 20th in terms of social media equity.  Of the nine onesport markets, Memphis was ranked last in terms of revenue premium equity and 7th for social media equity.

Memphis as a market has some natural disadvantages for teams in terms of population base (ranked number #41) and income levels (ranked number 104).  But even after controlling for these factors Memphis fans support levels are well below the levels provided by other cities.  For example, the Grizzlies average ticket price of $29.49 is far less than the league average of $50.99).  Even at these low levels attendance has been poor.  Despite winning 56% of games in the 2010-2011 season, the Grizzlies only sold 74.4% of their available seats (ESPN.com).  It was only last year when the Grizzlies broke the 90% capacity utilization rate and the team needed to win 68% of its game to do that well.  In comparison, Orlando sold about 94% of seats with a winning percentage of 24%.  In terms of social media, the Grizzlies have just over 407,000 Facebook Likes compared to Portland with 550,000 and Oklahoma City with about 2.3 million.  For reference the Lakers have 17 million Facebook Likes.

But while Memphis ranks last on our list, there are a few positive indicators.  Last year was the team’s most successful season and ESPN has ranked the Grizzlies organization as the top professional franchise.  It is also true that the Grizzlies have only been in Memphis since 2001.

Mike Lewis & Manish Tripathi, Emory University 2013.

NHL Fan Base Rankings: Americans may like Hockey, but Canadians Love it

PLEASE NOTE THAT THESE ARE OUR 2013 RANKINGS, FOR OUR 2014 RANKINGS AND IN-DEPTH STUDY, PLEASE CLICK HERE.

For our NHL Social Media Equity Rankings, please click here.

A quick search of the Internet about who has the best fans in any sport will lead to multiple articles and rankings.  These rankings tend to rely a lot on personal opinion, and very little on any type of analysis.  The best of these studies tend to use a little bit of data concerning metrics like attendance, or maybe how many “likes” the team has on Facebook.   Occasionally, the ranking will be some type of weighted average of several pieces of data.  The vast majority of these approaches are badly flawed.  In the case of looking at raw numbers such as attendance, a frequent mistake is to ignore that attendance is driven by winning rates.  If this is the case, then such a study inflates winning teams’ fan bases by including bandwagon fans.  In the case of using a weighted average of multiple criteria, we still have the problem of not accounting for winning rates, but we also have the problem that the “weights” for each factor tend to be arbitrary.

What we do in our rankings is to use a wide variety of data and some statistical modeling to get around these issues.  We use something called a revenue premium approach to assess a team’s fan equity (value of the fan base).  The basic procedure begins with a statistical model that predicts a team’s box office revenues based on market potential (population and median income), team quality (winning rates) and other factors (such as team payroll).  We then compare the predictions from this model with each team’s approximate box office revenues to determine which teams over and under perform.  More details on the approach are available here.  In today’s post, we rank NHL fan bases using the above approach.  Later in the week, we will present results that rank teams based on social media equity (rather than the economic value of the fan base).

Using the past three years of results, we find that the best NHL fan bases live north of the border.  In first place, we have the Toronto Maple Leafs.  The Leafs pack the fans in despite charging the highest prices in the league.  The key point is that while the Leafs have been up and down the last few seasons, the fans continue to show up and pay premium prices.

In second and third place, we have Edmonton and Montreal.  The Oilers ranking second may be a bit of a surprise given some of their recent struggles on the ice.  But Edmonton continues to sell out their building on a regular basis, while charging fairly high prices and losing more than half their games in recent seasons.  Remember, Edmonton does this with a metro area population that barely exceeds one million.  The Canadiens are number three on the list.  A comparison between the Canadiens and the Chicago Blackhawks might be instructive.  These two clubs are fairly similar in box office performance. The Hawks sell a few more tickets but Montreal charges higher prices.  But, Montreal achieves their results in a metro area a third the size of Chicago’s, and without being one of the best teams in the league.

In positions 4 through 6 we finally see the Americans represented.  The Penguins come in 4th, the Rangers 5th and the Flyers 6th.  Our initial reaction to these results was that Pittsburgh is a heck of a professional sports city.  The Steelers were the leaders in our study of social media equity in the NFL.  The Rangers and the Flyers are both solid franchises across all dimensions.

One of our favorite parts of doing these rankings is determining the bottom five.  It’s fun because we typically get to be insulted by folks from all over (thankfully, the Trashers left Atlanta so we are spared the local abuse*).  San Jose and Anaheim are 5th and 4th from the bottom, respectively.  Californians seem to be the opposite of Canadians (take it as a compliment or insult).  Third from the bottom is the Phoenix franchise (We’re not even sure of their name). Second from the bottom we have the Ottawa Senators.  This is just embarrassing for a Canadian team.  Let us respond to the Ottawa fans right now.  We don’t care that you sell out – read the description of the method.  In last place, we have Dallas.  Why would anyone move a hockey team from Minnesota to Dallas?

*On a related note, the Winnipeg Jets are excluded from the rankings because the team moved from Atlanta during the period of the study.

Mike Lewis & Manish Tripathi, Emory University 2013.

College Football Brand Equity Rankings: The Overall List

Over the last two weeks, we have been reporting our football fan base rankings conference by conference.  Today, we turn to our overall ranking.  We started the list with an analysis of the brand/customer equity of the major conferences.  The Big Ten and the SEC are the leading conferences largely because they have strong TV deals.  That being said, the number one team on our list is not a member of either the Big Ten or the SEC.

Number one on the list is the University of Texas.  The Longhorns have some built in advantages that make it such a powerhouse.  Texas is the flagship school in a highly populated state with an incredible football culture.  Texas is also interesting because it is such a frequent target in realignment discussions.   Texas would bring the most valuable fan base to any conference.   In fact, Texas football is such a valuable property that we doubt that they will move anytime soon.  Texas is a strong enough brand to keep the Big Twelve a viable conference.  This means that Texas has an immense amount of bargaining power within the Big Twelve; which would be lost in a move to the Big Ten or the SEC.

Number 2 on the list is a bit of a surprise.  Based on the numbers, we found Georgia to have the second highest customer equity.  We go into more detail about Georgia football in our SEC writeup.

Number three on the list is the Big Ten’s Ohio State Buckeyes.  Ohio State has many of the same advantages as Texas, as they are the flagship school in a highly populated and football crazy state.

Numbers 4 and 5 on the list also hail from the Big Ten.  We have Penn State in 4th place and Michigan in 5th.  These are two interesting cases, since PSU is obviously in a transitional stage, and may fade a bit over the next couple of years, while Michigan is making moves to become even more profitable.  In positions 6 through 8, we have Alabama, Auburn and Florida.  Our rankings seem to confirm that the SEC and Big Ten are college football’s top conferences.

The 9th place team is one that we haven’t talked about in any of our previous rankings, Notre Dame.  Our guess is that Notre Dame fans will feel slighted by their 9th place ranking.  But, at the end of the day, our approach is driven by a combination of revenue and team quality data.  What we find is that Notre Dame is a great college football brand, but far from the dominant brand their fans believe it to be.

In tenth place we have the lone West Coast team in the rankings.  The Washington Huskies were the surprise leader in the Pac 12, beating out teams like USC and Oregon.

Mike Lewis & Manish Tripathi, Emory University 2013.

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