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The Relationship Between Outcome Uncertainties and Match Attendance: New Evidence in the National Basketball Association

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Abstract

This paper investigates the determinants of game-day attendance for the National Basketball Association for the 2009/2010–2011/2012 seasons. Six different measures of short-run league-level competitive balance and game uncertainty for two rivals are incorporated at the same time in a Tobit model. The results for the effect of league-level uncertainty support the hypotheses of outcome uncertainty, but the effect of game-level uncertainty does not. Closer wins by the competing teams within a league and a larger gap in terms of the point spread between two teams in the betting market lead to higher attendance.

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Notes

  1. For an excellent overview of studies of CB and GU in North American professional sports, see Fort (2006).

  2. In sports leagues, relegation is a process where teams are transferred between two divisions based on their performance. The worst-ranked teams in the higher division are relegated to the lower division. For example, the bottom three teams are relegated in the Premier League.

  3. The Noll-Scully metric is used for measuring competitive balance in professional sports. See Quirk and Fort (1992) for details.

  4. The complexity of measuring CB is well summarized by Zimbalist (2003, p. 163). He asserts that “In the end, it may be that the best measure of competitive balance is a multivariate index, that it is nonlinear or constrained, and/or that it differs league by league.”

  5. For an excellent overview of random parameter models, see Train (2003), and for a recent application of a random parameter model with censored data, see Moeltner and Layton (2002).

  6. In point spread wagering for most sports, CoverNBA offers bettors odds that a team will win by more than a certain number of points, known as the “line”. If we take the game of the Sacramento Kings at New York against the Knicks on 15 February in the 2011–2012 regular season as an example, the line Sacramento at New York is \(-\)6. This implies that New York is considered the stronger team, and that the New York Knicks would have to win the game by 6 or more points for a bet on the Knicks to pay off.

  7. The predicted sum of scores in a game (also known as the “totals”) is provided by the sports betting market. Bettors bet on over/unders just as they do betting lines, that the sum of scores will be greater (“over”) or less than (“under”) the given value.

  8. HTAge is measured by the years since the team entered the NBA. For example, the Utah Jazz was founded in 1974 as the New Orleans Jazz in New Orleans, Louisiana. Although the team moved to Utah in 1979, in the definition the age of the team in 2010 was 37. Regressions using male population as a regressor are cited by Benz et al. (2006).

  9. The roster of star players defined by TopSal from 2009–2010 to 2011–2012 seasons can be provided upon request.

  10. The league organization divides 30 teams into two conferences. Each conference consists of three divisions with five teams. During the regular season, each team plays 82 games. A team faces opponents in its own division four times a year (i.e., 16 games). Each team plays six of the teams from the other two divisions in its conference four times (i.e., 24 games), and the remaining four teams from the other two divisions three times (i.e., 12 games). Finally, each team plays all of the teams in the other conference twice apiece (i.e., 30 games).

  11. CR5 is the average winning percentage of the top 5 teams. \(\hbox {HHI}_{\mathrm{t}}=\sum _{i=1}^{N} {(Share_{i})^{2}}\), where \(\hbox {Share}_{\mathrm{i}}\) is calculated by an ith team’s cumulative wins divided by the total of games played in the league before game t. N represents the number of teams.

  12. Los Angeles Clippers and Los Angeles Lakers play in the same arena: the Staples Center.

  13. The 2011 NBA lockout was the fourth lockout in NBA history. The 161-day lockout began on July 1, 2011, and ended on December 8, 2011. On November 26, 2011, the NBA owners and players reached a deal on a new labor agreement, ending the 149-day lockout. It reduced the regular season from 82 to 66 games.

  14. The official website of the NBA is http://www.nba.com/official/. The ESPN website is http://scores.espn.go.com/nba/scoreboard. The HOOPDATA website is http://hoopdata.com/advancedstats.aspx. The COVERS NBA website is http://scores.covers.com/basketball-scores-matchups.aspx.

  15. The TMR website is https://www.teammarketing.com/. Average ticket price represents a weighted average of season ticket prices for general seating categories, determined by factoring the tickets in each price range as a percentage of the total number of seats in each stadium. Premium seating (tickets that come with at least one added amenity) and luxury suites are not included in the ticket average.

  16. I rerun all of the results for a sample by dropping the first 15 games per team per season (i.e., the first 225 games across the NBA each season) and the first 20 games per team per season (i.e., the first 300 games across the NBA each season). These robustness checks yielded the same results.

  17. The average stadium age for the NBA teams during this period was 15.91. The Madison Square Garden in New York was the oldest arena in the NBA at an age of 44, and the Amway Center was the youngest arena at an age of 1.

  18. The sample size in the regressions is 2,999. There is one missing observation in the bettor odds (Philadelphia 76ers@ Milwaukee Bucks in 2009–2010 season). Playoff games are excluded from the sample because they mostly sell out. There were 10 games in which two teams from the same city (the Los Angeles Lakers and the Los Angeles Clippers) played each other in the same arena (the Staples Center). Since the value of logDistance of 0 is undefined, I substituted a value of Distance \(=\) 1 for these 10 games.

  19. All of the multiple linear regression assumptions such as multicollinearity, heteroscedasticity, and omitted variable bias were examined, and the results can be provided by the author if needed.

  20. The largest stadium (in Detroit, the Palace of Auburn Hills) can accommodate 22,076 people. However, the smallest stadium (the New Orleans Arena) can accommodate only 17,188 people. The censored points for two arenas have quite a large difference.

  21. Interval regression is a generalization of the models fitted by Tobit regression. For the NBA attendance, their likelihoods contain terms of the form Pr \((\hbox {ATT}_{\mathrm{it}}\geqq \uptau _{\mathrm{i}})\) for right-censored data, where \(\uptau _{\mathrm{i}}\) are the observed censoring values for the 29 stadiums. A more detailed discussion can be found in Cameron and Trivedi (2005, p. 532).

  22. If we take model 1 in Table 8 as an example, the Likelihood-ratio test of \(\sigma _u=0\) \((\upchi 2)\) is 1,074.59. It is highly significant and rejects the hypothesis that the variance due to the panel component is equal to zero. Therefore, random effects by the host team need to be considered.

  23. Tainsky et al. (2014) estimated the effects of point spreads on NFL ratings. Their evidence shows that a unit change in the point spread predicts a 0.4 % reduction in ratings.

  24. The value is calculated by [Marginal effect \(\times (\hbox {CBR}_{\mathrm{max}}\hbox {-CBR}_{\mathrm{min}})\)].

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  1. Department of Economics, Shih Hsin University, No. 111, Mujha Rd., Sec. 1, Wenshan District, Taipei, 116, Taiwan

    Wen-Jhan Jane

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Jane, WJ. The Relationship Between Outcome Uncertainties and Match Attendance: New Evidence in the National Basketball Association. Rev Ind Organ 45, 177–200 (2014). https://doi.org/10.1007/s11151-014-9436-x

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