Social Media Equity: The NBA

A challenge in evaluating fan bases in professional and college sports is how to adjust for capacity constraints.  Unlike most consumer categories, teams have a limited number of seats to sell.  One way to get around this issue is to look at team revenues.  But this approach also has some strong implicit assumptions in that we must assume that teams are trying to price in a manner that maximizes revenue.

The world of social media provides an opportunity to look at fan base support without worrying about capacity or pricing issues.  To look at NBA teams “social media equity” we collected follows and likes from Twitter and Facebook.  We then created a statistical model that predicts these measures of social media engagement as a function of market size, tweeting activity and team performance for this past season and for the season before that.  We then compared each team’s actual follows and likes against the model predictions.  This method attempts to control for short term fluctuations in winning percentage and market differences.

The top team in terms of social media equity is the LA Lakers.  The Lakers crush the competition both in terms of raw numbers and in our model.  In second place, we have the Miami Heat.  This one is interesting, and we suspect that the Heat results may be a bit misleading.  While the Heat does very well currently it is not possible to separate out how much of the social media equity is driven by the team versus by LeBron.  This is something to watch as we collect more social media data over the next few years.  In third place, we have another non-surprising result in the Celtics.

It is the next three teams that are surprising as Golden State ranks 5th, New Orleans ranks 6th, and Charlotte ranks 4th.  The case of Charlotte illustrates the value of our model based approach.  In absolute terms, Charlotte performs relatively poorly in terms of social media metrics.  However, when we adjust for team performance and market size, the team does fairly well.  This indicates that the Charlotte market has fairly resilient fans, and likely speaks to the potential of the market if a consistent winning team is developed.

At the bottom of the list, the most surprising result is the New York Knicks’ 27th place finish.  This is doubly interesting because when we ranked fan bases in terms of “economic” support, the Knicks were number one.  What these two results imply is that the Knicks’ fan base is economically valuable but not engaged (at least in terms of social media).  The Knicks play in the largest market but have only about 20% of the social media activity of the Lakers.

There were a couple of other interesting findings from this study.  First, the number of Twitter followers was uncorrelated with the number of times a team tweeted.  This suggests that fans follow based purely on their feelings for the teams, rather than the entertainment of following an interesting Tweeter.  We also found a very high correlation between the two social media platforms as the social media equity estimates across the two platforms exceeded 0.91. However, when we looked at the correlation between the social media equity and the economics based fan equity the correlation was just 0.3.  We will leave this disconnect between social media and revenues for a future post.

Mike Lewis & Manish Tripathi, Emory University, 2013.

Social Media Equity in the NFL: Another Metric for Evaluating Fans

Please click here for our NFL Fan Equity Rankings

Please click here for our NBA Social Media Equity Rankings

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.