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PGA Tour: the Relative Shift in TV Ratings Since the Beginning of the Fedex Cup Era

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PGA Tour: the Relative Shift in TV Ratings Since the Beginning of the Fedex Cup Era PGA Tour: The Relative Shift in TV Ratings Since the Beginning of the FedEx Cup Era 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 James Martello Jr February 2019 i PGA Tour: The Relative Shift in TV Ratings Since the Beginning of the FedEx Cup Era James Martello Jr February 2019 Economics Abstract Top players in the sports industry enjoy a fanatical following across the globe, making them ideal prospects for advertising campaigns in both print and electronic media forms. This paper uses decades of TV ratings, specifically from golfs FedEx Cup Era and television shows in general. Using weekly data from the Top 5 FedEx Cup ranked players presence in the Top 10 of golf’s most competitive tournaments, the presence of Tiger Woods, and the number 1 ranked television show of the year, this study utilizes a generalized least squares regression. This study hypothesizes that all variables used will positively affect the golf tournaments television rating. The results suggest that most variables do positively affect TV ratings, but based on the statistical evidence the hypothesis was not present. KEYWORDS: (PGA, TV Ratings, FedEx Cup, Tiger Woods) JEL CODES: (L83, Z20) ii ON MY HONOR, I HAVE NEITHER GIVEN NOR RECEIVEDUNAUTHORIZED AID ON THIS THESIS James Martello Signature iii Acknowledgements This journey would not have been possible without the support of my family, professors, and friends. To my family, thank you for encouraging me in all of my pursuits and inspiring me to follow my dreams. To my advisor Neal Rappaport thank you for the countless hours of support and direction throughout this entire process. Finally, thank you to my friends for all you have done for me over the past 4 years and allowing me to have the most memorable college experience. iv TABLE OF CONTENTS ABSTRACT…………………………………………………………………………………………………………………………… ii ACKNOWLEDGEMENTS………………………………………………………………………………………………………. iv 1 INTRODUCTION…………………………………………………………………………………………………………….. 1 2 LITERATURE REVIEW…………………………………………………………………………………………………….. 4 2.1 Top Players and Television Ratings............................................................................ 6 2.2 Literature in Sports……………………………………………………………………………………………….. 8 3 THEORY ……………………………………………………………………………………………………………………….. 15 3.1 Model.......................................................................................................................... 15 3.2 Hypothesis……………………………………………………………………………………………………………… 17 4 DATA…………………………………………………………………………………………………………………………….. 18 4.1 Summary Statistics………………………………………………………………………………………………… 21 5 RESULTS AND ANALYSIS ………………………………………………………………………………………………. 22 5.1 GLS Regression………………………………………………………………………………………………………. 22 6 CONCLUSION……………………………………………………………………………………………………………….. 25 REFERENCES……………………………………………………………………………………………………………………… 26 v Introduction The focus of this paper is to determine if there has been a shift in relative television popularity of golf vs other sports specifically investigating whether the presence of top FedEx Cup players significantly influences television ratings. There have been assertions that having top performing players in sports tournaments increases ratings (Gooding 867). These assertions will be tested empirically in the current paper. While many of golf’s superstars continue to have a huge impact on TV ratings for different tournaments, the most influential one continues to be Tiger Woods. The American born golfer broke into the professional golf tour in 1996, where his impressive performance earned him multimillion-dollar endorsements from several brands including Nike. Tiger won his first major tournament in 1997, making him the most popular golfer in the world. Since then, Tiger has been attracting favorable television ratings for the tournaments he participates in. Apparently, Tiger’s appearances in major golf tournaments between 1997 and 2013 attracted unprecedented coverage on all sports networks. This phenomenon has been referred to as the Tiger Effect. Between 2013 and 2017, Tiger remained out of all major sports events due to injuries and other personal reasons. During this period, television ratings for major golf tournaments decreased significantly. In late 2017, Tiger made a comeback to golf. He participated in a number of events during the 2018 golf season and his appearances led to increased TV ratings for the tournaments. Throughout the season, the Tiger Effect appeared to consistently improve television ratings for all tournaments including the British Open, the Masters and the PGA Championship. 1 It can be noted that during the 2018 season Tiger appeared in more than 20 events. All these events were featured broadcast television and hence his participation boosted both the ratings and viewership. He performed exceptionally well during the 2018 British Open tournament. According to Beall (2018), television ratings for the British Open tournament increased by 40% compared to the 2017 level. This was among the highest TV ratings since the year 2006 when Tiger emerged as the winner of the British Open tournament. Similarly, Tiger performed well during the 2018 PGA Championship and as such TV ratings rose by almost 70% compared to the 2017 ratings. In the final round of the 2018 PGA Championship, television ratings stood at 5.21. It appears that in the 2018 tournaments that Tiger participated in, television viewership increased by significant levels. In the tournaments where Tiger won, an even larger number of fans watched him compete. This was the case with both the British Open and the Tour Championship. In those two tournaments, TV ratings rose to unprecedented levels with the improved performance and positioning of Tiger Woods. Based on Tiger’s 2018 performance, it is clear that no other golf player has ever attracted such a high level of TV ratings (Cunningham 2018). Currently, Tiger is on top of his game in both performance and popularity. Although the majority of golfers attract large numbers of fans and impressive TV ratings, Tiger goes well above that and is known to attract an even larger number of viewers. It is for this reason that his performance is associated with increased high TV ratings. It can be concluded that sporting events that feature top players have a tendency to attract higher TV ratings. This has been the case with Tiger Woods, who has maintained consistency in his performance. So much so that various brands are 2 competing to be associated with his success. Consequently, Tiger has become a renowned celebrity endorser. Given the potentially large amount of money to be realized from sports, the competition among golf brands is at an all-time high. Thus, the appearance of key players in the tournaments pushes increased TV ratings. 3 Literature Review The concept of star players and the effect of celebrities on sports are important for successful marketing activities in the modern society. The most important issue of concern is how the top players form and maintain their popularity and why fans support and adore them. According to Routledge, Mariann and Mariann (2016), fans are often attracted to the top celebrity players because they are entertaining, successful, and have good physical attributes. The celebrities give the fans an opportunity to fulfill what they are missing in their lives with vicarious success. The relationship between the top celebrity players and their fan base can be best understood using psychological theories that explain various aspects like self-identity and group identity. Certainly, the top players share some attributes with other celebrities in terms of success, physical attractiveness, publicity, financial success, and entertaining their fan base. However, the sports celebrities provide additional attraction to the fans because of specific traits that are unique to sports such as determination, sportsmanship, tenacity, and others. The positive perceptions of the top players evoke emotions of cultural heroes in sports. The fans regard them as having extraordinary talent, strength, and bravery. This is partly why fans establish vicarious identity through the top players. Fans often find the desirable traits in both individual and team players. However, some players get more attention from the public and fans. For example, players in the individual sports like golf, gymnastics, tennis, boxing, and swimming get more attention than other players. Nevertheless, the motivation of some fans to support the top celebrity players is a 4 function of media exposure. The way media portrays them convinces some fans to start following them and want to be associated with them. According to Kovacs (2018), tennis has grown over the years and now has global appeal. However, the top tennis players share most of the prize money and associated fame. The high earnings and fame are a function of many variables other than their talents. For instance, they participate in many tournaments that give them exposure and ranking. Many sports have player rating systems but the one used in tennis focuses on a world ranking of the best players and has served to increase those players fan bases and level of appeal to consumers. Top tennis players, like WTA and ATP members, are ranked using aggregate scores. The ranking system makes it possible for the top players to appear in major tournaments and events to improve their ranking. Additionally, the appearance of the top players
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