sign in sign up
<<
Home , Major League Soccer, MLS Cup, United Soccer League, Western Conference (MLS)

FACTORS THAT DRIVE ATTENDANCE IN

A THESIS

Presented to

The Faculty of the Department of Economics and Business

The College

In Partial Fulfillment of the Requirements for the Degree

Bachelor of Arts

By

Matthew Fechter

May 2013

FACTORS THAT DRIVE ATTENDANCE IN MAJOR LEAGUE SOCCER

Matthew Fechter

May 2013

Economics Abstract

Major League Soccer is a growing league within the . Although soccer is not an American sport, it is growing increasingly more popular. Using a simple OLS regression this thesis provides insight into factors that drive attendance in Major League Soccer. The purpose of this thesis is to determine the factors that increase attendance to help the struggling franchises grow their fan base.

KEYWORDS: (Major League Soccer, Attendance)

TABLE OF CONTENTS

ABSTRACT iii

ACKNOWLEDGEMENTS iv

1 INTRODUCTION 1

2 LITERATURE REVIEW 5

2.1 Sport Specific ...... 5

2.2 Fan Loyalty...... 7

2.3 Superstar Effect...... 9

2.4 Winning Percentage...... 11

2.5 Conclusion...... 12

3 THEORY 14

3.1 Introduction………………………………………………………………… 14

3.2 Theoretical Determinants of MLS Attendance……………………………. 16

3.2.1 Age………………………………………………………… 16

3.2.2 Stadium Size………………………………………………………… 16

3.2.3 City Population……………………………………………………… 17

3.2.4 Median Household Income…………………………………………. 18

3.2.5 Win Percentage……………………………………………………... 19

3.2.6 Total Goals………………………………………………………….. 19

3.2.7 Goals For……………………………………………………………. 20

3.2.8 Goals Against……………………………………………………….. 20

3.2.9 MLS Cup Champion………………………………………………... 20

3.2.10 Year………………………………………………………………... 21

4 DATA AND METHODOLOGY 22

4.1 Introduction and Data……………………………………………………… 22

4.2 Ordinary Least Squares Regression……………………………………….. 24

5 RESULTS AND CONCLUSION 25

5.1 Introduction…………………...……………………………………………. 25

5.2 Results……………………………………………………………………… 27

6 WORKS CONSULTED 30

LIST OF FIGURES

3.1 Factors Effecting Attendance…………….………………………………………………….. 15

3.2 Median Household Income…………………………………………………………………… 18

LIST OF TABLES

4.1 Descriptive Statistics. …………………..…………………………...... 23

5.1 Pearsons Correlation Test ……………………….………………………….. 26

5.2 Regression…………………………………………………………………… 27

ON MY HONOR, I HAVE NEITHER GIVEN NOR RECEIVED

UNAUTHORIZED AID ON THIS THESIS

Matthew Fechter

Signature

CHAPTER I

INTRODUCTION

Soccer is widely considered the world’s sport. In America, soccer has traditionally been dwarfed by more instantly gratifying sports such as football, basketball, and baseball; all of which share a rich American history. Soccer’s growth has been stunted as it was adopted from Europe. Therefore many Americans do not fully understand the game nor resonate with the sport as they do with other

“American” sports. However, as more Americans grow up playing and developing a love for the beautiful game, it has gradually risen in popularity. This past year Major

League Soccer (MLS), has out-grown basketball in average per game attendance.

MLS averaged 18,807 fans per game in 2012, setting a record for the league, and surpassing the National Basketball Association’s (NBA) average of 17,274 fans per game. This upward trend is crucial to the growth of soccer in America, as all rely on fan support for survival.

History of Soccer in the United States

The first legitimate soccer league in America was the American Soccer

League (ASL). It was founded in 1921 and consisted of seven teams from the East coast. In 1958 the ASL was granted permission from the United States Soccer

1 Federation (USSF) to create a new league, the International Soccer League (ISL).

The ISL was formed so that ASL teams could compete against top European and

South American club teams in cities across America. A new league, the North

American Soccer League (NASL), was formed in 1967, creating competition for the

ASL. In 1984 the ASL ceased operations in what would have been its 50th year as a league, and the (USL) was created. Unfortunately, a year later the USL along with the NASL ceased operations as well. It wasn’t until 11 years later, in 1996, that America formed its current first division outdoor professional league, Major League Soccer (MLS). The league consisted of ten teams spread across the nation. Currently, the MLS has expanded to 19 teams and is continuing to grow with rumors of a 20th team, the Cosmos, to be added in the near future.

The MLS

Major League Soccer is a ”single entity” league, meaning that the league owns every team and in turn every player in the league. Each team has an “owner” who is essentially the largest shareholder in the club. The owners operate their clubs, but decisions about player contracts, advertising, and their stadiums all must be approved by the league. The reasoning behind the “single entity” league was so teams in the lower half of the league that weren’t generating large amounts of revenue could continue to compete in the league and grow over time.

The MLS consists of 19 teams that compete in two conferences, the East and the West. Each team plays a 34-game regular schedule; 17 home games, and

17 away games. Teams in the Western conference play 24 in-conference games and

2 10 out-of-conference games. While teams in the Eastern conference play 25 in- conference games and 9 out-of-conference games. In-conference teams will play each other at least three times during the regular season while playing out-of- conference teams occurs only once during the regular season. The MLS just recently implemented this type of season to increase in-conference rivalries. However, it hinders cross-conference rivalries. This past 2012 season, the were not able to play a rival, the Galaxy, at home. Consequently, a game that would have surely sold out the stadium did not occur. However the hope is to eventually produce fierce in conference rivalries that sell out stadiums.

With that, the MLS still continues to generate revenue and increase fan support each year.

The MLS set new attendance records during its 17th season. One of the premier clubs in the league, the Sounders, has continued to raise the bar for fan attendance since it entered the league as an in 2007. In the

2012 season the Sounders averaged 43,104 fans per game. To put that in perspective, if the Sounders was a team it would average the third most fans per game behind the and the

Phillies. Unfortunately, the large fan base that the Sounders enjoy is extremely rare in the MLS. The club with the next highest fan base is the Los Angeles Galaxy, which averages 23,136 per game, roughly 20,000 fans less than Seattle.

3 Motivation

Since I can remember, I have been playing soccer. I just recently ended my college career, with no set plans of playing professionally. The game of soccer has taught me countless lessons that have helped me grow throughout my life. I’d like to give back to the sport and help increase its popularity in America. This is my first step.

Even though 2012 showed record-breaking attendance numbers, roughly half the clubs in the league showed a drop in attendance from the previous year.

Furthermore clubs with statistics that normally suggest a rise in fan support had a drop in attendance. So what drives attendance in the MLS? Is it the superstar effect, team record, age of stadium, ticket price, marketing strategy, etc? It is important to identify the factors that increase and decrease attendance to provide the MLS with critical information to grow the league.

The purpose of this thesis is to determine the factors that are essential to increasing the attendance rate in the MLS to help the struggling franchises grow their fan base.

4

CHAPTER II

LITERATURE REVIEW

The goal of any business is to constantly produce a positive revenue stream to make money and prosper. In the professional sports world, fan support provides that constant stream of revenue. The more fans in the seats, the more money the franchise will make. Many studies have been conducted on attendance factors in professional sports. The purpose of this literature review is to identify central factors that drive attendance in all sports, and more specifically soccer.

Sport Specific Stadiums

Over the past few years, many clubs within Major League Soccer have built their own soccer specific stadiums. The MLS believes that to continue to expand the league and increase attendance, soccer specific stadiums must be built. Will new, innovative stadiums increase attendance?

A theory called the honeymoon effect suggests that the opening of a new stadium will create an initial surge in attendance, but that over time attendance will decline, eventually returning to its initial state. Studies on this effect have been conducted in various sports other then soccer. The authors of some of the most

5 recent studies include Clapp and Hakes (2005) on Major League Baseball (MLB),

Leadley and Zygmont (2005) on the National Basketball Association (NBA), and

Leadley and Zygmont (2006) on the (NHL). In each study it became obvious from the data that building new stadiums increases attendance.

Upon further investigation the authors further bolstered their observation, gathering evidence that new stadiums increased attendance significantly. In the

MLB, a new stadium will increase attendance by 32% to 37% in the first year, and then attendance will continue to float above baseline for the next six to ten years.

The NBA and NHL see a similar rise in attendance demand of 15% to 20% in the initial years following the construction of a new stadium. Furthermore, Dempkin II

(2001) found that the older the stadium is, the less attendance that team receives.

However, this might represent the lack of desirable amenities such as a better food court, better seating angles, and so forth (Wakefield & Sloan, 1995). Fans want to have the best experience possible when they spend money to watch a professional sport team play. The new stadiums are being built to showcase the newest technologies and complement its fans.

No research debates the findings that constructing a new stadium will increase attendance. However, almost every study done on attendance demand in sports suggests that teams that win will always fill their stadiums. The honeymoon period for a successful team could be severely prolonged as long as the team continues to win, or has solidified a solid base of fan loyalty through years of winning. The point being, past research has concluded that building a new stadium

6 will recruit fans and raise attendance, however to keep fans in the seats the team must perform.

Still every team cannot win. Therefore, teams that are not generating wins must find various other ways to attract fans. The end goal is to have the ability to fill the stadium regardless of how the team is performing. Obviously, winning will eventually weigh on attendance.

Fan Loyalty

The MLS completed its 17th season in 2012. During the 2012 season, total match attendance reached an all-time high. Fans are becoming more loyal to their respected MLS clubs, and professional soccer in America is on the rise.

A variety of studies have been conducted on fan loyalty and brand loyalty.

What makes a sport fan continue to rally behind his or her team? Dempkin II (2001) concluded that NFL teams who have resided in their host cities the longest enjoy larger attendances. This is attributed to the franchise’s ability to secure its brand within its community. The same is said in professional football (soccer) in England and Wales. Dobson and Goddard (1995) found attendance patterns that express a loyalty factor, which shows little variation across all football clubs with very different characteristics. Both and European football have deep seeded roots of tradition that intertwine with the rich histories of the lands.

Perhaps clubs within Major League Soccer are too young to experience this level of fan loyalty. However it isn’t a bad idea to plant the seed that will potentially

7 blossom into respectable, marketable traditions of excellence and prosperity in each

MLS club.

To do so each club must establish brand loyalty. When a team falters, brand loyalty ensures a more stable following (Gladden & Funk, 2004). Sport fans react positively towards identification. Teams should strive to provide an optimal experience every time a loyal fan comes into contact with the teams’ brand. Fans need to feel as if they are truly a part of the organization to cement brand and fan loyalty (Gladden & Funk, 2004). When a club or franchise accomplishes that feat, then brand loyalty will strengthen and grow.

Multiple new revenue streams open once a club has cemented brand loyalty and a solid fan base. A high level of brand loyalty allows clubs to offer their brand across geographic boundaries (Gladden & Funk, 2004). A club like Manchester

United has the ability to sell its brand all over the world because it has an extremely high level of brand loyalty. Furthermore, Manchester United is able to charge an advertising premium for other businesses to be associated with the club, and they are granted premium television rights. The club was able to accomplish this level of brand loyalty through a long, consistent history of success. Clubs in the MLS do not have the history Manchester United enjoys, however they do have the opportunity to reach a much larger audience as start up clubs.

In today’s world, social media – Facebook, Twitter, Youtube – is the easiest and potentially the most effective way to grow fan bases in all sports. The more

“stone-age” way of communicating through mail is also efficient, it is however

8 expensive. Fans want to be a part of the sport organizations they follow. As a sport organization, it is critical to constantly stay in touch with the fans and make each individual fan feel special. The new market models should include opportunities for the fans to attend practice sessions, attend “invite only” events, and chat with the players via an online chat room (Gladden & Funk, 2004). These are only a few suggestions towards building stronger relationships with fans.

Fan Loyalty is a significant contributor to the estimation of gate attendance

(Winfree et al., 2004). There is no doubt that building brand and fan loyalty contributes to increasing the gate attendance of sporting events. Therefore, it is important for each club or franchise to indentify with the fans and cater to the fans’ needs. Total fan loyalty can be accomplished over time. A club will know their fans are loyal once win percentage doesn’t effect whether or not people attend their games.

Superstar Effect

As the MLS continues to grow and improve, it becomes a legitimate league for international superstars to finish their careers. , a French international, who played for top soccer clubs in the world, including Arsenal from

England and Barcelona from Spain, currently plays for the New York Red Bulls.

Thierry has mentioned in multiple interviews that he was happy to make the move to the MLS. However, even with Thierry Henry at the New York Red Bulls, the club has dropped in attendance. It raises the question; is there a superstar effect in the

MLS? There is no doubt that it is important for the MLS to continue to attract top

9 talent from around the world to increase the popularity of professional soccer in

America. There is doubt as to if MLS superstars do in fact help raise attendance for their own team.

In all sports, talent attracts fans. Noll (1974) was the first to introduce a superstar variable in his study. He, however, did not find the variable to be significant. Since Noll, many studies have been conducted on the effect of superstars in sports. Hausman and Leonard (1997) suggest that players had a substantial positive effect on club revenues in professional basketball. Berri, Schmidt, and

Brook (2004) investigated the extent of the superstar externality and suggest that it is performance on the court, not star power, which attracts fans. However, they also stated that the true power of star power might lie in the player’s ability to generate revenue for his or her opponent. Therefore Berri and Schmidt (2006) examined road attendance in the NBA. They found evidence of a superstar externality, concluding that the ability for the star to generate revenue is quite limited for the team employing the star. In essence, in the National Basketball Association star power is more essential to a team’s opponent.

A few articles on the superstar effect in European soccer have been conducted. Lucifora and Simmons (2003) found that talent in the Italian soccer leagues is highly valued by consumers. Furthermore, the consumers view superstars as imperfect substitutes within their market if they play on a prestigious team. Brandes, Franck, and Nuesch (2008) did a study on local heroes and superstars effect on attendance in the professional German soccer. They defined

10 “local heroes” as outstanding players on small teams. These local heroes were able to attract fans to the home games, but did not affect the attendance at away matches.

Superstars, however, produced a positive externality when playing on the road.

These results matched the results found by Berri and Schmidt (2006) and moreover raise the question, who should be paying these superstars?

Berri and Schmidt (2006) suggest superstar externality would not exist in a league where the player’s contracts were negotiated and paid for by the league based on their contribution to total league revenue. The players would then be allocated to different teams within the league.

The MLS has always operated as a single corporate entity with a top down management structure (Kuethe & Motamed, 2009). It is a monopsony, and perhaps that is a reason no one has conducted a study on superstars effect on attendance within the league. It would be interesting to examine if teams with “superstars” have higher attendance rates in the MLS.

Winning Percentage

Although there are few articles written specifically on the importance of winning percentages on attendance, almost every study on attendance in sports uses winning percentage as an independent variable. Consequently, every study seems to find winning percentage as positive and statistically significant. The ultimate reward for a fan is to witness his or her team win.

11 The aforementioned articles on the effect of new stadiums specifically stated that teams with winning percentages would always fill the stadium, no matter how new the stadium is. Furthermore, in a study on violence, scoring, and regional rivalries in the NHL, Paul (2003) advocates that teams that win will always have larger crowds. Surprisingly Paul (2003) also found that scoring which is usually synonymous with winning actually decreases attendance in the NHL. He does state that hockey is a unique sport and its pure uniqueness could account for his findings.

I believe winning percentage will be statistically significant and positive in determining attendance in the MLS. I am however, curious to see how American soccer fans react to scoring, and how it affects attendance within the league.

Conclusion

In most markets, a firm’s welfare is improved when competition is eliminated. As Neale (1964) points out, production in sports is unlike any other market. In sports, the elimination of competition ultimately eliminates the industry.

If all the teams in the league continue to improve, total market revenue will increase as long as the teams remain competitively balanced (Berri & Schmidt, 2006). In a perfect but unrealistic professional sport industry, all the teams would be competitively balanced and profit would be maximized. However, in all professional sports leagues there are teams that excel and teams that perform poorly.

Consequently, the MLS decided to begin as a single entity league. They wanted to make sure the teams on the lower end of the revenue spectrum were able to survive and over time prosper. At the end of the day, the MLS wants to improve total

12 attendance, and so far they have been successful. However, roughly 50% of the clubs in the league are losing fans. The aforementioned literature should shed some light on ways to improve attendance for every club in the MLS.

13

CHAPTER III

THEORY

This chapter will discuss the different factors that are alleged to affect attendance in Major League Soccer. Aforementioned in Chapter II, winning percentage seems to be the most influential, constant, and positive determinant of attendance in professional sports. However, with the insight of previous studies on attendance in professional sports, it is also projected that various measures of demographics and franchise intricacies have an impact on attendance. FIGURE (#) provides a visual representation of all the determinants that will be discussed in this chapter.

14

FIGURE 3.1

Factors Effecting Attendance

City Population Median MLS Cup Household Champion Income

Stadium Average Total MLS Age Attendance Goals

Stadium Goals For Size

Goals Against

15 Theoretical Determinants of Attendance in Major League Soccer

Stadium Age

Many previous studies have been done on the effect new stadiums have on attendance. Therefore, stadium age has become a common determinant of attendance in professional sports. Dempkin II (2001) found that the older the stadium is, the less attendance that team receives. Further investigation concluded that the drop in attendance could be derived from the lack of desirable amenities such as a better food court, better seating angles, and so forth (Wakefield & Sloan,

1995). Consequently, in all professional sports there is a trend of upgrading stadiums to keep up with the quickly evolving technologies that draw fans to the events.

Stadium age is defined as the amount of years it has been since the construction of a new stadium. New stadiums are intriguing to the general public.

The hope of building a new stadium is that fans, or people that are indifferent towards the team will come check out the new facilities and in the process become a fan of the team. Therefore, building new stadiums have become crucial in moving a franchise forward. Previous research indicates that new stadiums will have a positive affect on MLS attendance.

Stadium Size

Theoretically, the bigger the stadium the more people can fit, and attendance should be higher. However, this is not the case. Fans feed off each other’s energy.

Therefore, when a game is sold out it is more likely that the fans will have a good

16 time. Furthermore, the more intimate the experience fans gets to have with the team they are cheering for the more likely they are to attend another game.

Aforementioned in Chapter II, fans want to feel as though they are a part of the franchise. They want to feel as though their presence is helping their team win.

Soccer specific stadiums have sought to accomplish that feat. The MLS wants their stadiums to be sold out. They want the atmosphere at all their games to be buzzing with excitement, anticipation, and joy. That will attract the fans. Stadium size is a crucial component in creating this intimate environment between the fan and the team. However, figuring out the right size for a stadium is tricky. If a stadium is too small, the club will not be maximizing its profits. On the flip side, if the stadium is too large, the atmosphere of the games will not be as enticing.

Therefore, it is estimated that the stadiums that were not soccer specific will not bring in as many fans as the stadiums that have been built to accommodate MLS fans today.

City Population

City population is an important variable in every attendance study.

Theoretically, if a franchise is located in a city with a higher population, they will be able to draw more fans, and will therefore have a larger fan base. This is not always the case. Some cities with smaller populations have closer nit communities that are more likely to rally around their sports’ teams. Still, it is expected that if teams are located in New York or Los Angeles the larger populations will have a positive affect on attendance.

17 Median Household Income

Median household income (MHI) is defined as the average amount of income a household makes in a year. Professional sport events are normal goods, therefore when the median household income increases so should attendance. People are more likely to spend money on entertainment when they are making more money.

Vice versa if the median household income drops, so should attendance. I believe that the median household income will have more of an affect on attendance then many of the other variables. The cities that have the ability to spend more money should be the ones who have the highest attendance at their sporting events.

FIGURE 3.2

18 Win Percentage

The goal for every team in any sport is to win. Ultimately teams that win will attract the most fans and generate the most revenue. Berry, Schmidt, and Brook found evidence that for every win an NBA team has, revenue increases by $83,036.

Based on previous research I believe that winning percentage will be both positive and highly statistically significant.

Winning percentage is defined as the total wins plus half of the ties divided by the total amount of games played.

Total Goals

Paul (2003) evaluated the variations in attendance due to the impact of violence, scoring, and regional rivalries. The study uncovers several aspects of the

National Hockey League (NHL) that are somewhat surprising, and helpful to the

MLS. Paul found that higher scoring teams tended to have lower attendance.

However, the NHL like the MLS consists of teams in both the United States and

Canada. He found that the fans of the teams in the United States were attracted to goals more so then the Canadian fans. This is interesting as we are very much so an entertainment driven society. American soccer fans as a whole tend to enjoy the quick fix. Possibly attributing to why soccer in America has not yet reached its full potential.

Goals For

19 Goals-For is the amount of goals the team scores against their opponents.

This statistic is predicted to be statistically significant and positive because the more the team scores the more likely they are to win. Furthermore, the more goals that are scored, the more opportunities fans get to experience an exhilarating moment.

Goals Against

Goals-Against is the amount of goals the opponents score on the home team.

I expect this to be negative, as the more goals scored against a home team, the more likely they are to lose, decreasing win percentage and in turn attendance.

MLS Cup Champion

This variable is important in examining whether or not winning the MLS Cup does or doesn’t increase attendance. Ultimately the MLS Cup is the top prize in the

League. Unlike most soccer leagues around the world, the MLS works in a different way. To popularize the league in America, the league was set up in a similar layout as most American professional sports. In other soccer leagues around the globe, the soccer clubs are crowned when the regular season ends. Whoever holds the best record at the end of the season is awarded the crown. Therefore, it will be interesting to investigate whether or not the playoff system works by looking at whether being crowned a MLS Cup champion increases attendance.

Year

The MLS is a relatively young league in America. Although professional soccer leagues have been around since the early 1900’s, the MLS has only been in

20 operation since 1996. Therefore, it takes some time to connect with the general public and sell the MLS brand. Soccer is becoming more popular in America, so it can be predicted that the more recent the year, the higher the attendance should be.

This should especially be true for the most recent years, as the MLS has had a recent surge in expansion teams and popularity.

21

CHAPTER IV

DATA AND METHODOLOGY

The purpose of this chapter is to explain the data set and the empirical model used to test the data. The chapter will begin by explaining where the data came from and what the data is comprised of. It will then transition into explaining the basic empirical model. This model will be used to test the data using an ordinary least squares (OLS) regression. The results from the OLS test will be presented in the next chapter.

Data

The data includes information from all 19 teams who play in Major League

Soccer from 2004-2012. Not all the teams participated in the league in 2004. The league has grown from ten teams in 2004 to 19 teams in 2012. The independent variables are the variables discussed in Chapter III: City Population, Median

Household Income, Stadium Age, Stadium Size, Goals For, Goals Against, Total Goals,

Year, and MLS Cup Champion. The dependent variable is average match attendance.

22 This is the basic empirical model to be tested using the variables talked about in this chapter:

ATTENDANCE= f(CITYPOP, MHI, WINPCT, GOALSF, GOALSA, TOTGOALS,

YEAR, STADSIZE, STADAGE, MLSCUPCHAMP)

TABLE 4.1

Descriptive Statistics for the Independent Variables

Variable Description Mean Standard Minimum Maximum Deviation CITYPOP The 1980419.349 2105957.686 180104 8391881 population of the surrounding city MHI Avg. income 48804.0155 10467.33371 34207 76957 of a household WINPCT Percentage 0.502093023 0.104106199 0.218 0.75 of Games won GOALSF Goals 41.62790698 7.896864258 21 72 scored on opponents GOALSA Goals 41.56589147 8.399074504 20 67 scored by opponents YEAR Current 2008.496124 2.565163345 10525 2012 year of season TOTGOALS Total goals 83.19379845 10.55688274 61 117 in all games STADSIZE Capacity of 29296.86822 12.41094259 10525 80242 stadium STADAGE Age of 9.604651163 12.36452752 1 51 Stadium MLSCUPCHAMP MLS Cup 0.069767442 0.255747877 0 1 Champion

23 Ordinary Least Squares (OLS) Regression

Sport economists have used many different forms of regressing independent variables to dependent variables. Along with OLS, economists have also used Tobit regressions to test for attendance. I will be using OLS because it is the best fit for my model. The OLS model will be used to test the explanatory variables previously mentioned. There are many different reasons that soccer fans attend MLS games.

Hopefully, based on past research the chosen variables will suffice to provide sufficient insight into what drives attendance in Major League Soccer.

24

CHAPTER V

RESULTS AND CONCLUSION

This chapter will analyze the results from a couple different types of tests.

First, I tested for variable correlation. Then I ran an OLS regression without the variables that are highly correlated. The analysis will describe how each of the aforementioned variables affects attendance for MLS matches. Finally, I conclude the thesis by explaining the impact this paper has on Sports Economics and the MLS.

Table 5.1 shows the results of the Pearson Correlation test.

25 TABLE 5.1

Pearson’s Correlation Test

MLS MED GOAL GOALS TOT STAD STAD CUP ATTND YEAR POP INC WIN % AGAINST FOR GOALS SIZE AGE WIN

ATTND 1.

YEAR 0.19608 1.

- POP 0.11041 0.04282 1.

- MED INC 0.15688 0.22889 0.07157 1.

- WIN % 0.1634 0.01656 -0.0398 0.06804 1.

GOAL - AGAINST -0.05424 0.0496 0.11498 0.12074 0.74441 1.

GOALS - FOR 0.17434 0.06511 0.04508 0.03883 0.64728 -0.15275 1.

TOT - GOALS 0.0868 0.08769 0.12453 0.06665 0.10749 0.67772 0.62317 1.

STAD - - - - SIZE -0.04355 0.33521 0.30607 0.25289 0.08088 0.03377 0.03491 0.00075 1.

STAD - - AGE -0.05282 0.05707 0.07641 0.24061 0.00176 0.09816 0.15355 0.19193 0.14659 1.

MLS CUP - - - - WIN 0.10759 0.05317 0.00579 0.13189 0.18725 -0.16764 0.16769 -0.0079 0.05917 0.01344 1

The correlation test shows that GOALSF and GOALSA are both highly

correlated to WINPCT and TOTGOALS. This makes sense as goals directly influence

26 the outcome of the games. Therefore I ran a regression without GOALSF and

GOALSA. The results are shown in table 5.2

TABLE 5.2

Regression without GOALSF and GOALSA

Variable Coefficient T-stat

CITYPOP 0.00033 1.57201 MHI 0.0686 1.59333 WINPCT 8,631.73045 2.05059 YEAR 332.92398 1.90267 TOTGOALS 48.44674 1.1111 STADSIZE -0.00714 -0.30719 STADAGE -27.5853 -0.7291 MLSCUPCHAMP 2,118.78927 1.1915 Number of Observations= 129

F= 3.377

R-Squared = .0983

YEAR and WINPCT are both statistically significant and positive. The coefficient for WINPCT means that for every additional percentage increase, attendance will increase by 8,631 people. This result is expected as past research has concluded that teams that win have more fans. CITYPOP and MHI also had firly large T-Statistics. However, their coefficients suggest that neither variable truly affects attendance. For instance, the CITYPOP coefficient suggests that for every increase in the population of a city, game attendance will increase by .00033. A city would have to be enormous for population to truly account for an increase in attendance. MLSCUPCHAMP proved to be interesting although it is not statistically

27 significant. Its coefficient suggests that game attendance improves by 2,118 every time a team wins the MLS Cup. These results are fairly normal when it comes to attendance studies in sports.

Conclusion

There have been multiple studies on factors that drive attendance in professional sports. However, not many have been done on the MLS. Furthermore, no one has evaluated all of these variables from 2004-2012 in relation to the MLS.

This thesis sought to figure out which variables drive attendance in Major League

Soccer. Although the results were not very strong, this thesis provides insight into the fact that the MLS attendance reacts similarly to all professional sports leagues.

Winning is the key to bringing fans to the stadium.

As Major League Soccer continues to grow, more people will attend the games. In its 20th year, the MLS is still a relatively young league. With time, it will hopefully grow and expand.

28

WORKS CONSULTED

Alexander, D. L., & Kern, W. (2004). The economic determinants of

professional sports franchise values. Journal of Sports

Economics, 5(1), 51-66.

Berri, D. J., & Schmidt, M. B. (2006). On the road with the national

basketball association's superstar externality. Journal of Sports

Economics, 7(4), 347-358.

Berri, D. J., Schmidt, M. B., & Brook, S. L. (2004). Stars at the gate

the impact of star power on NBA gate revenues. Journal of Sports

Economics, 5(1), 33-50.

Brandes, L., Franck, E., & Nüesch, S. (2008). Local heroes and

superstars an empirical analysis of star attraction in german

soccer. Journal of Sports Economics, 9(3), 266-286.

Clapp, C. M., & Hakes, J. K. (2005). How long a honeymoon? the effect

of new stadiums on attendance in major league baseball. Journal

of Sports Economics, 6(3), 237-263.

Depken II, C. A. (2000). Fan loyalty and stadium funding in

professional baseball. Journal of Sports Economics, 1(2), 124-

138.

29 Depken II, C. A. (2001). Fan loyalty in professional sports an

extension to the . Journal of Sports

Economics, 2(3), 275-284.

Dobson, S. M., & Goddard, J. A. (1995). The demand for professional

league football in england and wales, 1925-92. The Statistician, ,

259-277.

Forrest, D., & Simmons, R. (2002). Outcome uncertainty and

attendance demand in sport: The case of english soccer. Journal

of the Royal Statistical Society: Series D (the Statistician), 51(2),

229-241.

Forrest, D., Simmons, R., & Feehan, P. (2002). A spatial Cross–

Sectional analysis of elasticity of demand for soccer. Scottish

Journal of Political Economy, 49(3), 336-356.

Gladden, J. M., & Funk, D. C. (2004). Understanding brand loyalty in

professional sport: Examining the link between brand association

and brand loyalty. The Business of Sports, , 194-198.

Hart, R., Hutton, J., & Sharot, T. (1975). A statistical analysis of

attendances. Applied Statistics, , 17-27.

Hausman, J. A., & Leonard, G. K. (1997). Superstars in the national

basketball association: Economic value and policy. Journal of

Labor Economics, 15(4), 586-624.

30 Kuethe, T. H., & Motamed, M. (2010). Returns to stardom: Evidence

from US major league soccer. Journal of Sports Economics, 11(5),

567-579.

Leadley, J. C., & Zygmont, Z. X. (2005). When is the honeymoon

over? national basketball association attendance 1971-

2000. Journal of Sports Economics, 6(2), 203-221.

Leadley, J. C., & Zygmont, Z. X. (2006). When is the honeymoon

over? national hockey league attendance, 1970-2003. Canadian

Public Policy/Analyse De Politiques, , 213-232.

Lucifora, C., & Simmons, R. (2003). Superstar effects in sport

evidence from italian soccer. Journal of Sports Economics, 4(1),

35-55.

Neale, W. C. (1964). The peculiar economics of professional

sports. The Quarterly Journal of Economics, 78(1), 1-14.

Noll, R. G. (1974). Attendance and price setting. Government and the

Sports Business, , 115-157.

Paul, R. J. (2003). Variations in NHL attendance: The impact of

violence, scoring, and regional rivalries. American Journal of

Economics and Sociology, 62(2), 345-364.

Paul, R. J., Wachsman, Y., & Weinbach, A. P. (2011). The role of

uncertainty of outcome and scoring in the determination of fan

31 satisfaction in the NFL. Journal of Sports Economics, 12(2), 213-

221.

Simmons, R. (1996). The demand for english league football: A club-

level analysis. Applied Economics, 28(2), 139-155.

Wakefield, K. L., & Sloan, H. J. (1995). The effects of team loyalty and

selected stadium factors on spectator attendance. Journal of

Sport Management, 9(2), 153-172. www.mlssoccer.com http://www.census.gov/

32