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Using an econometric model to determine the if a strong correlation - among other factors - exists between winning NBA teams and fan attendance

Using an econometric model to determine the if a strong correlation - among other factors - exists between winning NBA teams and fan attendance

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  • 1. Timothy Salud
  • 2.  The NationalBasketball Association Recognized as thepillar of professionalbasketball One of the 4 majorprofessional sports inthe US
  • 3.  Attendance variesacross the league Do wins equal greaterattendance? Some “winning” teamshave lower attendancerates than “losing”teams
  • 4.  2010-11 Season: 61-21(.744) 1st place inWesternConference 98.6%Attendance
  • 5.  2010-11 Season: 23-59(.280) Finished 13th in theEastern Conference 83.2%Attendance
  • 6.  2010-11 Season: 41-41(.500) Finished 8th in EasternConference. MadePlayoffs 72.6% Attendance
  • 7.  2010-11 Season: 36-46(.439) Finished 13th in theWestern Conference 95.4% Attendance
  • 8.  Using econometrics to determine factors thatinfluence attendance at NBA games Regression model to measure how mucheach variable impacts attendance Determine whether or not winningpercentage is the strongest variable
  • 9.  PRICE = Average ticket price for the season(as measured byTeam Marketing Report) ALLSTAR =The number of All Stars that theteam had that season CAP = If the team’s payroll was above theLuxuryTax of $70.3 million (1 or 0) WIN =Winning percentage of the team
  • 10. Ŷ = β0 + β1 + β2 + β3 + ƐATTEN = 66.752 + 0.1935*PRICE + 0.1573*ALLSTAR – 1.1893*CAP + 29.2911*WIN
  • 11.  R2 = 0.512 Adj. R2 = 0.434 Largest coefficient is forWIN. Meaning that winningpercentage greatly effects (29 times more for every %increase in winning percentage) CAP is a negative coefficient. Spending more moneydoes not necessarily increase fan attendance Ticket prices do not deter fans from attending games.Price inelastic.
  • 12.  If wins are still the biggest factor why dolosing teams still reach a higher attendance? Larger individual markets Player/fan preference Proximity and availability of substitutes (hockey,football, baseball) Unknown sports phenomena of expectations
  • 13.  Wins do equal more attendance for most teams Exceptions do exist due to larger markets,substitutes, etc. “Premium” players have little effect onattendance Historic fan base drives continued success inattendance of losing teams
  • 14. http://www.sportscity.com/NBA/Salary-Caphttp://www.databasebasketball.com/index.htmhttp://content.usatoday.com/sportsdata/basketball/nba/salaries/team/2010http://fancostexperience.com/pages/fcx/blog_pdfs/entry0000016_pdf000.pdfhttp://espn.go.com/nba/attendance/_/year/2011/sort/homePct

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