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MAXIMIZING ATTENDANCE AT WORLD ARENA A THESIS Presented to The Faculty of the Department of Economics and Business The Colorado College In Partial Fulfillment of the Requirements for the Degree Bachelor of Arts By Alexander Krushelnyski May 2013 MAXIMIZING ATTENDANCE AT WORLD ARENA Alexander Krushelnyski May 2013 Economics Abstract The Division 1 Men’s Ice Hockey Team for Colorado College sells out at their home arena, The World Arena, at 7,343. As one of two division 1 sports at Colorado College, this venue provides great entertainment for fans of the Colorado College Tigers. There have not been any studies to examine why and how the World Arena maintains such a successful rate of attendance. An Ordinary Least Squares Regression is used to determine which factors are significant in affecting attendance at Tiger Hockey Games. Ticket sales are used as a proxy for measuring attendance. Using two different models, results show that playing The Air Force Academy, being regular season champions, making it to the NCAA tournament and making it to the Frozen Four tournament are most significant in increasing attendance. Other variables that were also significant are penalty minutes. KEYWORDS: (World Arena, Attendance, Ticket Sales, Colorado College Hockey) TABLE OF CONTENTS ABSTRACT ii ACKNOWLEDGEMENTS vii 1 INTRODUCTION 1 2 LITERATURE REVIEW 5 2.1 Determinants of Attendance Basic Breakdown……………………………….. 6 2.2.1 On Ice Factors…………….………………………………………………... 6 2.1.2 Opponent…………………………………………………………………... 8 2.1.3 Violence……………………………………………………………………. 8 2.1.4 Off Ice Factors……………………………………………………………... 9 2.1.5 Location and Substitutes………………………………………………….. 11 2.1.6 Accomplishments…………………………………………………………. 12 3 DATA COLLECTION 14 3.1 List of Variables……......................................................................................... 16 3.2 Summary Statistics............................................................................................. 20 4 REGRESSION RESULTS 21 4.1 Regression Results 4.1-4.4……………………………………………………. 22 4.2 Regression Results 4.5,4.6…………………………………………………… 23 4.3 Equation 4.1 Analyzed………………………………………………………... 24 4.4 Equation 4.2 Analyzed………………………………………………………... 26 4.5 Equation 4.3 Analyzed………………………………………………………... 27 4.6 Equation 4.5 Analyzed………………………………………………………... 29 4.7 Equation 4.6 Analyzed………………………………………………………... 30 4.8 Econometric Tests…………………………………………………………….. 31 4.8.1 Tests For Heteroskedasticity……………………………………………… 31 4.8.2 Distribution of Errors……………………………………………………... 32 5 CONCLUSION 33 6 REFERENCES 36 LIST OF TABLES 1.1 Division Men’s Hockey Attendance………………………………………………….2 3.1 Definition of Game by Game Variables………………...….….…………………...16 3.2 Definition of Variables (That Do Not Change Game to Game)…………………….17 3.3 Dependent Variable Definitions…………………………………………………….18 3.4 Summary Statistics………………………………………………………………….20 4.1 Regression Results Equations 4.1-4.4……………………………………………….22 4.2 Regression Results Equations 4.5, 4.6………………………………………………23 4.3 Heteroskedasticity Results…………………………………………………………..31 LIST OF FIGURES 2.1 Attendance at World Arena Basic Breakdown……………………………….. 6 ACKNOWLEDGEMENTS This thesis would not have been possible without the help and support of many people. First, I would like to thank Jessica Bennett for her outstanding cooperation and brilliant insight. Your statistics and information provided are at the heart of this study and the reason why this was possible. Secondly, I would like to thank Professor Maroula Khraiche for her guidance and collaboration. Thirdly, I would like to thank my family for persuading me to write this thesis this year. I appreciate all the love and support. Finally, I would like to thank my roommates who also wrote their theses this year and the endless supply of sunflower seeds that help us make it through this process. CHAPTER I INTRODUCTION Hockey is one of the most popular sports in North America today. There are 59 Division 1 Men’s Ice Hockey programs across the United States (“College Ice Hockey, 2013”), meaning that there are also 59 arenas that are typically filled with cheering students, parents and supporters. The state of Colorado alone possesses two big time Division 1 hockey programs; University of Denver and Colorado College. Each school contains its own unique qualities. University of Denver contains many Division 1 sports other than hockey and is also located in a major city. The 12-county Denver-Aurora- Boulder Combined Statistical Area had an estimated 2011 population of 3,157,520 (“Denver, 2013”). Colorado College on the other hand only contains two division 1 sports, Men’s Ice Hockey and Women’s Soccer. The school is located in the small Colorado Springs containing a population of less than 500,000. The World Arena is also located in Colorado Springs 5 miles from the Colorado College campus. Yet Colorado Springs World Arena, the home of Colorado College Hockey out seats and outsells the Magnus Arena home of the Denver Pioneers of Denver University. How can it be possible that the small Colorado College community can fill the World Arena on such a regular basis? The highest grossing college event in the state of Colorado sells out at close to 7,500 people as the World Arena roars when the Colorado College hockey team hits the ice. With a student population of just over 2,000 attending Colorado College, 1 which is much less than other schools with division one programs, a crucial objective of World Arena and Colorado College faculty and staff is maximizing attendance at hockey games. The question that must be answered is how to maximize attendance at an arena that seats close to 8,000 while only having a student population of 2,000 in a city with a population of just under 500,000 (“Colorado Springs, Colorado, 2013”). Colorado College differs from most major universities that have a Division 1 Ice hockey team because most schools that have major Division 1 sports usually contain student populations of at least 10,000 or more. TABLE 1.1 DIVISION 1 MENS HOCKEY ATTENDANCE School Enrollment Avg. Attendance Capacity Wisconsin 30,367 11,773 15,237 North Dakota 11,522 11,155 11,634 Minnesota 51,853 9,539 10,000 Colorado College 2,026 6,754 7,343 Michigan 36,675 5,997 6,637 Michigan State 48,906 5,364 6,470 Denver 11,770 5,359 6,026 Ohio State 56,387 5,178 17,500 Western Michigan 24,598 3,444 3,667 SOURCE: www.ncaa.com/icehockey-men/d1 Table 1.1 shows 9 schools, including Colorado College, and their average attendance at their Division 1 hockey games for the 2011-2012 season as well as the maximum capacity the stadium holds and the student enrollment. Each of these schools is ranked in the top 20 in attendance for Division 1 Men’s Ice Hockey. Five out of the 2 nine schools contain student populations of over 30,000, the other three contain populations of over 10,000 while Colorado College only contains a student population of 2,026. The purpose of this study will be to understand why Colorado College has the sixth highest average attendance throughout all college hockey. This study will look at the many different factors that influence Colorado College Hockey games and attendance at World Arena and why Colorado College continues to be a top attendance event not only in Men’s Division 1 Ice Hockey, but in the state of Colorado and the city of Colorado Springs. Motivations for this research arise because the World Arena is a main event holder in the city of Colorado Springs. Colorado College Hockey is a prominent source of entertainment in Colorado Springs and provides a large market. Not to mention the longstanding history of the program which has been a large part of the Colorado College community for 72 years. Colorado College Hockey serves an large purpose in the Colorado College community, being one of two division one sports the school contains along with having the fourth largest stadium throughout all of division one hockey, research must be done to study the determinants of attendance in order to utilize the World Arena’s maximum potential, from a city perspective and also from a college perspective. There are many challenges to filling a stadium. The staff and faculty must take many things into consideration when their main objective is to sell as many tickets to games as possible. The Colorado College student body is just over 2,000, that fills less than a third of the Colorado Springs World Arena. Marketing, advertising and performing are critical objectives for everyone involved with the World Arena to keep ticket sales as high as they are. The performance of the hockey team is very much 3 dependent on attendance, and attendance is very much dependent on the success of the team. The relationship the Colorado College Hockey team shares with fans is a very personal one. Through many player appearances, fundraisers and charity events the players and staff seek to develop more personal relationships with fans in order to sell tickets. However, ticket sales cannot simply be increased by only personal relationships. The Colorado College Hockey team serves a large purpose for the school, but the World Arena itself must maintain a successful attendance rate in order to help maintain the prestige of the program. It is important to utilize The World Arena to not only give the hockey team a good reputation but to also add to the outstanding reputation of Colorado College itself. The success of school’s athletics add prestige and accomplishment to the academic institution. The World Arena and Colorado College hockey games are an important economic opportunity for business and this study will examine how to take full advantage of what the World Arena provides to the Colorado Springs and The Colorado College population. When the main objective is filling a stadium, it is essential to understand what factors attract fans to hockey games. As the number one facility used for entertainment in Colorado Springs, research should be devoted into determining factors of attendance for this Arena in order to fully utilize its potential and support for the Colorado College Hockey Team.
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