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

1. Timothy Salud

2.  The National
Basketball Association
 Recognized as the
pillar of professional
basketball
 One of the 4 major
professional sports in
the US

3.  Attendance varies
across the league
 Do wins equal greater
attendance?
 Some “winning” teams
have lower attendance
rates than “losing”
teams

4.  2010-11 Season: 61-21
(.744)
 1st place inWestern
Conference
 98.6%Attendance

5.  2010-11 Season: 23-59
(.280)
 Finished 13th in the
Eastern Conference
 83.2%Attendance

6.  2010-11 Season: 41-41
(.500)
 Finished 8th in Eastern
Conference. Made
Playoffs
 72.6% Attendance

7.  2010-11 Season: 36-46
(.439)
 Finished 13th in the
Western Conference
 95.4% Attendance

8.  Using econometrics to determine factors that
influence attendance at NBA games
 Regression model to measure how much
each variable impacts attendance
 Determine whether or not winning
percentage is the strongest variable

9.  PRICE = Average ticket price for the season
(as measured byTeam Marketing Report)
 ALLSTAR =The number of All Stars that the
team had that season
 CAP = If the team’s payroll was above the
LuxuryTax of $70.3 million (1 or 0)
 WIN =Winning percentage of the team

11. Ŷ = β0 + β1 + β2 + β3 + Ɛ
ATTEN = 66.752 + 0.1935*PRICE + 0.1573*ALLSTAR – 1.1893*CAP + 29.2911*WIN

12.  R2 = 0.512
 Adj. R2 = 0.434
 Largest coefficient is forWIN. Meaning that winning
percentage greatly effects (29 times more for every %
increase in winning percentage)
 CAP is a negative coefficient. Spending more money
does not necessarily increase fan attendance
 Ticket prices do not deter fans from attending games.
Price inelastic.

13.  If wins are still the biggest factor why do
losing 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

15.  Wins do equal more attendance for most teams
 Exceptions do exist due to larger markets,
substitutes, etc.
 “Premium” players have little effect on
attendance
 Historic fan base drives continued success in
attendance of losing teams

16. http://www.sportscity.com/NBA/Salary-Cap
http://www.databasebasketball.com/index.htm
http://content.usatoday.com/sportsdata/basketbal
l/nba/salaries/team/2010
http://fancostexperience.com/pages/fcx/blog_pdfs
/entry0000016_pdf000.pdf
http://espn.go.com/nba/attendance/_/year/2011/s
ort/homePct