NFL Fan Equity: Maybe the Cowboys are America’s Team?

Note: We have been getting a lot of questions about our study.  Here are the first and second follow-ups to our study.  For an alternative fan ranking using “Social Media Equity,” click here.

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.

We will continue this discussion next week so please check back.

Mike Lewis & Manish Tripathi, Emory University 2013.

Follow Up to the NBA Fan Equity Study & Why We Do This

Our post about which NBA teams have the best fan bases has generated a good deal of response.  This response has included insightful questions about the models and variables.  We wanted to use this post to provide some more detail and examples.

Before we get into the NBA study, it is probably useful to give folks a bit more background on what we are trying to accomplish.  Our unofficial mission is to use marketing concepts and statistical methods to understand the behavior of players, teams, and leagues.  We are both sports fans and academics, so our goal is to go beyond opinion, and use data to generate new insights into the world of sports.

When we start an analysis like the NBA fan equity study we really don’t start with an agenda (though Professor Lewis does acknowledge a personal bias against Duke Basketball).  We start with a bunch of data and some concepts (theory) that guide the way we approach the analysis.  In the case of the fan equity study, our guiding theory is that team revenue is based on the loyalty of fans, the size of the team’s market, the quality of the product and the entertainment value of the team.

The analysis begins with a model of box office revenue based on variables that correspond to market potential (capacity and market population), team quality (winning percentage) and entertainment value (number of all stars, payroll).  The insight or theory that drives the analysis is that this model can be used to predict the revenue that is due to quality and market potential.  Any difference between this predicted value and actual value is due to “fan loyalty.”

In their responses to us, readers tended to ask about a few specific teams.  For instance, there was a great deal of interest in comparisons between the Knicks and the Nets.  The table below shows several differences between the two teams that are drivers of the differential fan equity.  The teams share the largest population metropolitan areas but the Knicks achieve a 10.7% advantage in terms of attendance DESPITE charging much greater prices.  It is this greater pricing power that pushes the two teams to opposite ends of the ranking.

Another illuminating comparison could be made between Orlando and Golden State.  Given the excitement surrounding the Warriors the casual fan would likely assume that Golden State enjoyed a stronger fan base.  However, when we look at the numbers we see that Orlando generates almost the same attendance (and charges slightly higher prices) while operating in a market that is half the size and winning fewer than half as many games.  Our analytics driven approach accounts for these differences.  It also makes sense when you consider that Orlando fans provide about the same amount of box office revenue as GSW fans, while the team draws from a smaller market and wins only 24% of their games.

This last point is really the key to our analysis.  As a further example, while Miami is currently a great revenue driving team, we need to realize that their fans are attracted to a team that won 80% of their regular season games and has three all- stars and the likely MVP in the lineup.  The true test of fan loyalty is what happens when a team slumps.  This is why teams like Orlando and Dallas do so well in our rankings.

Mike Lewis & Manish Tripathi, Emory 2013.