NHL Fan Analysis Part 2: Sensitivity of Attendance to Wins

Note: This is Part II of our study of NHL Fan Quality.  This week we will be ranking NHL teams/fans on the following dimensions: Fan Equity, Social Media Equity, Fan Equity Growth, Price Elasticity, Win Elasticity, and Social Media based Personality.  For more details on our measures of quality, please click here.  For Part I, click here.  For Part III, click here.

Today, we start to dive a bit deeper into our analyses of NHL fan bases.  Specifically, we look at the top teams in terms of sensitivity of attendance to wins.  These rankings are based on a regression model that includes team fixed effects, average prices, winning percentage and interactions between the team dummies and the winning and pricing variables.  We use data from 2000 to 2014 for the analysis.

These analyses are instructive as they provide a look at the consumer behaviors that generate our fan equity rankings.  But these analyses also raise questions.   The best way to consider the results is that they are driven purely by the data.  What we don’t have is the underlying theory.  The best example of this occurs with our win sensitivity rankings.  What does it mean if attendance is very sensitive to winning rates?  Are the fans discerning and demanding of quality or are they bandwagon fans that abandon the team when things go bad.  We leave the interpretation to the reader.

Top Win Sensitivity NHL

The top five teams in terms of sensitivity to winning rates are the Detroit Red Wings, Chicago Blackhawks, St. Louis Blues, Buffalo Sabres, and Dallas Stars.  We suspect that this list will raise eyebrows.  The Red Wings are one of the most dominant franchises in the NHL, and are a great box office draw.  But, a closer look at the data reveals that this is a fan base that has perhaps become a bit spoiled.  When the Red Wings went from being a 70% plus winning percentage team in the early part of the decade to a 60 something winning percentage team around 2007 to 2010, Red Wing attendance dropped below 20,000 for a few years.  While this drop was small, the rate of attendance change versus winning percentage was large compared to other NHL teams.

The Blackhawks might be the best example of a fickle fan base.  When the Blackhawks are winning 30% of their games they draw around 13,000 fans per home game.  When they win 70%, they draw 22,000 fans.  The figure below shows a scatter plot of winning percentage and home attendance for the Blackhawks.

ChicagoScatterplot On the flip side, we also have a list of the five fan bases that react the least to changes in winning rates.  Here, again we have multiple interpretations.  Are these fans completely loyal, and therefore they show up regardless of if the team is winning or losing?  Or are these fans there for the fireworks and ancillary entertainment, and thus barely know that a game is going on?

Bottom 5 Sensitivity NHL

The teams with the least sensitive fans bases are Arizona (Phoenix), New Jersey, Columbus, San Jose and Florida.  Arizona, in fact, has a negative correlation between winning rates and attendance (see figure below).  Yes, we know that there are some factors that are not in the model such as time in market, but this pattern is striking.  Basically, the take away is that for these teams performance on the ice is secondary.  This actually could be the right strategy in small markets, or markets where hockey doesn’t have a deep tradition.  It makes sense to play up the entertainment aspects in a place like Columbus where a team may never be as consistent a winner as the across town competition.

ArizonaScatterplot

Mike Lewis & Manish Tripathi, Emory University 2014.

MLB Fan Analysis 2014 Part 2: Attendance Sensitivity to Performance & Prices

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Note: Please click here for Part 1.  

For part 2 of our analyses of MLB fan bases, we change direction and focus on fan response to team performance and pricing.  These analyses complement the analyses of fan equity by drilling down a bit, and considering how demanding fans are of their teams.  We develop our fan sensitivity rankings using statistical models of consumer demand (attendance).  These models are built to estimate team-level response to price and winning percentage.  We use data from 1998 to 2013.  For more on our methodology, please click here.

Team Performance

Our first analysis looks at the responsiveness of fan demand to team winning percentage.  This can be thought of as a measure of how demanding fans are of their teams.  In other words, we are looking at the tolerances fan bases have for losing (or maybe we could view this as insight into which cities are the most prone to bandwagon behavior).

MLB 2014 Win Sensitivity

The most demanding MLB fans live in Philadelphia.  This fits the stereotype of Philadelphia fans as aggressive, demanding fans that are willing to cheer injuries and boo Santa.  The numbers say that Philadelphia fans require their team to perform or they won’t show up.  Following the Phillies are the fans of Baltimore, Oakland, the White Sox, Detroit and Cleveland.

At the other extreme, the teams with fans that are the least sensitive to winning rates are the Yankees, Cardinals, Marlins, Red Sox and Diamondbacks.  This group of non-demanding fans bases probably includes two types.  We have the loyal and passionate fans of the Yankees, Cardinal and Red Sox.  But, we probably also have the apathetic fans of the Marlins and the Diamondbacks.

Prices

Our second analysis examines the relationship between average ticket prices and attendance.  This analysis is focused on the degree to which fan bases are sensitive (or insensitive) to high ticket prices.  We should point out that the analysis of price sensitivity in sports is a tough issue (so the results should be taken with a grain of salt).  We are using average prices in the analysis.  Given the range of prices within a stadium, this is debatable assumption.  But it’s the best data we have access to, and we’re all friends, so why not.

MLB 2014 Price Sensitivity

We find that the most price sensitive fans live in Arizona, Cleveland, Baltimore, Seattle, Atlanta and Tampa Bay. Frankly, we are not sure what to make of this list.  Several of the cities are located in warm weather cities (which seems to reduce fan interest).  Cleveland and Baltimore are older cities and Seattle is a vibrant city in the Pacific Northwest.

At the other extreme, we have Milwaukee, Anaheim, Minnesota, San Francisco, and Philadelphia.  Perhaps these cities should raise prices.  The case of Philadelphia is especially interesting given that Phillies fans are also the most sensitive to winning.  It seems the Phillies should charge more and use the funds to invest in players.

The Brewers are another fascinating case.  This team does well in social media equity and the fans don’t seem to be very price sensitive.  This seems to be a team that is rapidly developing a highly loyal following. 

Mike Lewis & Manish Tripathi, Emory University 2014.