• Economic and team performance data have different effects on different elements

of ticket demand

• Unemployment is a strong predictor of attendance but not price

• Mean annual wage is a strong predictor of non-premium ticket price

but not attendance

• When controlling for fixed-team effects, team performance variables

did not affect attendance, but had (small) effects on ticket price

• Opening a new stadium predicted increases in attendance and ticket prices

• The relative ticket price increase associated with a new stadium is

greater for non premium tickets than for premium tickets

• In general, macroeconomic effects on ticket demand were stronger than team

performance effects

• Next steps and implications: This study lays the foundation for future work that

investigates to what degree NFL teams’ ticket pricing strategies were economically

rational during this time

.

Conclusions

Is the price right? An analysis of the National Football League ticket market relative to the Great Recession

Benjamin Singer1

Graduate Student, Yale School of Management

Results (continued)Introduction Results

Data and Methods

The Great Recession (December 2007 through June 2009) in the United

States not only incurred widespread economic turmoil, but also was one of

the few times during the last decade when National Football League (NFL)

average attendance figures fell below almost full attendance. However, NFL

ticket prices never decreased on average during this time. This study takes

advantage of this natural experiment to analyze the macroeconomic, team

performance, and other factors that influenced NFL ticket markets before,

during, and after the recession.

Primary Research Questions

1. How do local economic factors (unemployment, median wage) impact the

demand for NFL tickets (ticket price and attendance) relative to team

performance variables (wins, championships)?

2. To what degree do these various economic and team-related factors have

different effects on different elements of ticket demand (e.g., premium

tickets vs. non-premium tickets)?

NFL Ticket Market Data

• Primary market data on average non-premium and average premium ticket

prices for 30 NFL teams (Jacksonville and Buffalo excluded), courtesy of

Team Marketing Report

• Average annual home game attendance data for the 30 teams, courtesy of

ESPN

• Data span 11 years from 2004 – 2014, for 330 team-year observations

Local Macroeconomic Data

• Annual average unemployment rate and median wage for each local major

metropolitan area corresponding with an NFL franchise, courtesy of the

Bureau of Labor Statistics from 2004 - 2014

Team Performance Data

• Prior year team wins, whether the team won the Super Bowl the prior year

Data on Other Factors Affecting NFL Ticket Demand

• Winning percentage of local professional sports substitutes (MLB, NBA,

NHL teams), opening of a new stadium, beer and parking prices

Study Design and Analysis

All models use linear regression with team-based fixed effects and a Prais-

Winsten specification for panel-corrected errors. The fixed effects

specification accounts for the possibility of large disparities in baseline

values of dependent variables (e.g., attendance, ticket prices) for different

teams. The Prais-Winsten estimation controls for serial correlation between

the errors in autoregressive models. Additionally, I include independent

dummy variables for each year (except for 2004, which is used as the

baseline year) to account for annual NFL-wide fluctuations in variables.

• Price data – no information on secondary ticket market, which is potentially more

robust, dynamic, and nuanced in terms of its ability to capture the impact of

macroeconomic conditions on consumer decisions

• No reliable estimate for the relative proportion of premium vs. non-premium tickets

Over the 300 team-year observations from 2005 – 2014, various models show (see Tables 1 and 2

for more details for attendance and non-premium ticket price models):

• Annual attendance decreases 1.34% for every

one percent increase in local unemployment

• New stadia opening are associated with a $20.30

increase in non-premium ticket prices and a

$43.08 increase in premium ticket prices

• Winning rates of local MLB, NBA, and NHL teams

do not appear to have significant associations with

attendance or ticket prices

• Prior year wins and championships (winning the

Super Bowl) do not have significant associations with attendance or premium ticket price

• Every prior year win is associated with a $0.17 increase in non-premium ticket price

• Winning the Super Bowl is associated with a $2.35 increase in non-premium ticket price

• Robustness checks (example: Figure 1) indicate that a linear model seems reasonable for

the attendance and ticket price models

Table 1. Prais-Winsten fixed effects regression results for attendance (percent)Limitations

Table 2. Prais-Winsten fixed effects regression results for non-premium ticket price (dollars)

Coefficient Stat. Sig.

Macroeconomic Conditions

Unemployment rate (%) -1.34% ***

Mean wage ($1,000's) 0.15%

Team Performance

Prior year regular season wins 0.15%

Prior year championship (Super Bowl win) -0.63%

Other Factors

New stadium 4.40% *

MLB team win rate (%) 0.04%

NBA team win rate (%) 0.00%

NHL team win rate (%) -0.07% *

Observations 300

R-squared 0.76

Rho 0.31

Coefficient Stat. Sig.

Macroeconomic Conditions

Prior year unemployment rate (%) $0.10

Prior year mean wage ($1,000's) $1.05 **

Team Performance

Prior year regular season wins $0.17 *

Prior year championship (Super Bowl win) $2.35 *

Other Factors

New stadium $20.30 ***

Prior year MLB team win rate (%) -$0.11 *

Prior year NBA team win rate (%) $0.07 *

Prior year NHL team win rate (%) -$0.07

Observations 300

R-squared 0.74

Rho 0.47

Figure 1. Scatter plots of residuals (y-axis) vs. predicted values (x-axis) for attendance

1Work conducted as partial qualification for master’s degree in Quantitative Methods in the Social Sciences at Columbia University. Dr. Benjamin Goodrich advised my work on this project.