Demand for Football

Question 1

Causes of the long-term decline in football attendance (6)

Dobson and Goddard, 2011

Answer 1

• Social and demographic change
• Increasing material affluence
• The option to watch football on television
• Crowd misbehaviour
• The deteriorating state of many football stadia
• The dubious quality of the fare on offer on the field

Question 2

What was done to improve the demand for football in terms of stadium attendance again? (4)

(Dobson and Goddard, 2011)

Answer 2

• Improved standards of play through overseas talent/star players
• Lowering stadium capacity to eradicate problems and hooliganism
• Hillsborough (1989) cause eradication of terraces
• Helped strengthen the appeal to middle classes

Question 3

Independent Variables (6)

Dobson and Goddard, 2011

Answer 3

• Geographic
• Price, Income and Unemployment
• Team Quality and Uncertainty of Outcome
• Weather
• Superstars
• Cultural/Politics
• TV

Question 4

Geographic (2)

Answer 4

• Defining the size of the market is made difficult by the progressive erosion over time of the geographical segmentation of supporters, especially of the leading clubs e.g. Manchester United (Dobson and Goddard, 2011)
• Hart, Hutton and Sharot (1975) – the geographical distance between the stadia of the home and away teams is used in most attendance studies, to allow for the positive ‘local derby’ effect on attendances and the negative effect of long distances on the propensity of away supporters to attend. The distance variable is typically a highly significant determinant of attendance.

Question 5

Price, Income and Unemployment (3)

Answer 5

• The relationship between price and income/unemployment tends to be ambiguous, partly because some of the most keenly supported clubs are located in areas of low per capita income and high unemployment. This does not imply, however, that a reduction in per capita income, an increase in unemployment or a rise in admission prices would be expected to increase attendance. (Dobson and Goddard, 2011)
• Baimbridge, Dawson and Cameron (1996) findings suggest that attendances increase with average earnings whenever the latter are above about £400 per week. The model fails, however, to identify an economically meaningful price effect.
• Bird (1982) The results suggest a price elasticity of demand for football attendance of -0.22, and an income elasticity of -0.62. This negative income elasticity implies that attending football is an inferior good – as income increases, consumers tend to give up attending football. However it is not possible to infer that the rise in income ‘caused’ or even ‘influenced’ the decline in attendance were trended in opposite directions during the period in question

Question 6

Team Quality and Uncertainty of Outcome (4)

Answer 6

• In most empirical studies, it is clear that there is a strong relationship between team quality and match attendance (Dobson and Goddard, 2011)
• A recent run of good results is usually found to have a significant and positive effect on attendance (Dobson and Goddard, 2011)
• Czarnitzki and Stadtmann (2002) found that the impact of match uncertainty of outcome is strongest in the higher quantiles, in matches for which the level of spectator demand is already relatively high.
• Nevertheless, from their results Peel and Thomas (1988, 1992) argue that measures to increase uncertainty of outcome might have a detrimental effect on attendance, if they reduce home-win probabilities.

Question 7

TV Broadcasts, Stadium Attendances and TV Audiences (4)

Answer 7

• Bainbridge, Cameron and Dawson (1996) found that only the live transmissions on Monday evenings had a negative effect, of about 15 per cent on average, on attendance.
• Allan and Roy (2008) find that home supporters who purchase individual tickets are less likely to attend Scottish Premier League matches that are broadcast live and free-to-air by the BBC; but the attendance of season ticket holders and away supporters is unaffected
• Forrest and Simmons (2006) find that attendances are reduced when midweek matches are scheduled at the same time as a televised Champions League match, and when a midweek match is player either immediately before or after a weekend fixture in which the home team was the same in both fixtures.
• Alavy et al. (2006) use minute-by-minute TV audience ratings data to examine audience fluctuations over the course of televised Premier League matches. TV audiences appear to value uncertainty of outcome: the audience tends to decline when the difference between the win probabilities of the two teams is large. However, TV audiences do not prefer draws: there is a tendency for viewers to cease watching matches that remain scoreless for a long period, or matches for which the probability of a draw increases as the match progresses.

Question 8

Weather (2)

Answer 8

• Garcia and Rodriguez (2002) find that rain depresses Spanish La Liga attendances, perhaps because many Spanish stadia are open to the elements.
• Cairns (1987) also attempted to follow variations in the weather on attendance, but generally do not find evidence of any effect

Question 9

Superstars/Star Players (2)

Answer 9

• Brandes, Franck and Nuesch (2008) investigate the impact on German Bundesliga attendances of the presence of ‘superstar’ players in the home and away teams. Superstars are defined as players above the upper 2 percent quantile by market value for the league as a whole. Superstars are found to increase match attendances when playing both at home and away.
• MLS Beckham Effect - attendance grew by over 3,000 fans per game during the Beckham era. Researchers have also noted that David Beckham generated more than twice his annual salary in unique ticket sales for the LA Galaxy and their opponents during the Beckham era. During the Beckham era, fans attended games that he played in at a 55% higher rate than when he did not play, and the MLS saw its first fully sold out games, with nearly 30,000 fans in attendance. (Chanavat, Desbordes and Lorgnier, 2017)

Question 10

Social/Cultural/Politics (2)

Answer 10

• Case Study Example: nevertheless, Barcelona’s pro-Catalan associations remain a powerful part of its mystique and mythology, as do Athletic Club de Bilboa’s Basque affiliations, and Real Madrid’s and Espanyol’s traditional centrist learnings. Clearly political, nationalist and cultural sentiment has played a fundamental part in shaping the present-day support that all of these clubs attract (Dobson and Goddard, 2001)
• If not in England then elsewhere, broader social, cultural, ethnic and religious influences also play an important part in determining the size and composition of the crowds that watch certain clubs (Dobson and Goddard, 2001)

Question 11

Strategies for Improving Attendance (5)

Answer 11

• Derby ‘6 Pack’ (Ellen, 2010)
• Nottingham Forest adding value and tangible elements (Ellen, 2010)
• Bradford ‘Lowest Price Season Ticket’ (Ellen, 2010)
• Southend United ‘ World Cup Promotion’ (Ellen, 2010)
• Star Players (Brandes, Franck and Nuesch, 2008) and (Chanavat, Desbordes and Lorgnier, 2017)

Question 12

Potential Strategies for tier 2 teams

Answer 12

• Price - Bradford
• Promotion - Southend
• Product - Derby
• Scheduling - champo league

Question 13

Why strategies are different between Tier 1 and Tier 2 teams (3)

Answer 13

• Top tier teams often operate at full capacity so changes in the variables will have less of an impact compared to Tier 2 teams were the variables are more sensitive
• Some determinants you can not change e.g. income
• Decision-takers must look at those they can control to improve demand

Question 14

League Sponsorship (3)

Chanavat, Desbordes and Lorgnier, 2017

Answer 14

• The income of FIFA coming only from sponsors f or the 2014 World Cup amounted to 1.4 billion US dollars
• Concerning the FFF, we see that 40% of its 200 million in annual revenue came from sponsorship
• The Ligue 1 would like to get backed by a trademark as they were by Orange between 2008-2012. The goal is to collect at least 10 million euros per year from the 2016/17 season on. This amount is lower than what is collected in England with Barclays (48 million), with BBVA in Spain (23 million euros) and in Italy with Telecom Italia Mobile (15 million). The cost of association between a sponsor and a sponsored sports entity has continued to increase in recent years.

Question 15

Source of growth for League Revenues

Mason, 1999

Answer 15

It is through interaction with corporations outside of the immediate professional sport industry that the most recent revenue streams have been discovered, and this should continue to be the most promising source of growth