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Which MLB Team has the “Best” Home Fans? And Who has the Worst? Hint: It’s LA!

One of our favorite types of analyses at Emory Sports Marketing Analytics is to assess the brand equity (a proxy for fan intensity and loyalty) of sports teams.  Today, we present our analysis of MLB fan bases.  Thus far, in our short history, we have looked at the brand equity of college and pro basketball teams.   For those who are unfamiliar, brand equity is a common concept in marketing.  The basic idea is that well known and well regarded brands provide value to organizations.  Examples of high brand equity brands include Coca-Cola, McDonald’s and Apple.  These brands have value because consumers may have significant loyalty to the brand, or may be willing to pay a price premium.  There are a wide variety of methods for calculating brand equity.  Most methods involve surveys of consumers, and focus on data such as awareness levels, loyalty rates or consumer associations.

For our MLB brand equity analysis, we use a “Revenue Premium” method.  The intuition of this approach is that brand equity adds a premium to team’s revenues that goes beyond what would be expected based only on team quality and market size. To accomplish our analysis, we use a statistical model that predicts team revenues as a function of the team’s winning rates, division finish, market population, payroll, and stadium capacity.  We use this model to predict each team’s expected revenue.  To measure the quality of the team’s fan or brand equity we compare the forecasted revenue with estimates of actual revenue.  The key insight is that when a team achieves revenues that greatly exceed what would be expected based on team performance and market size it is an indication of significant brand equity / fan support. The reported results cover the past 5 seasons worth of data.

One complication in performing this analysis with MLB teams is that actual revenues are not public.  We get around this problem by using a couple of estimates of revenue.  The first projection is computed by multiplying average ticket prices by the team’s home attendance levels.  This measure is related to the size and passion of the fan base as it reflects the number of fans willing to travel to the stadium, and the economic sacrifice these fans are willing to make.  The second revenue measures we use are the team revenues estimated by Forbes magazine each year.  This measure has value in that television revenues are included.  For our analysis, we use both measures and then average the results.  We should add that the results are broadly consistent across the two different revenue estimates.

Our analysis finds some expected, and some surprising results.  We discover that the Red Sox and the Dodgers tie for having the “best” fan bases.  These teams are followed by the Cardinals, Giants and Cubs.  It is the next team on the list that first raises some eyebrows, as our model rates the struggling Houston Astros as having the 6th best fan base.  At the bottom of the list we have the Kansas City Royals, Miami Marlins, Chicago White Sox, Detroit Tigers and the Anaheim Angels.  The bottom five are also likely to cause debate and angst among Angels and Tigers supporters.

So why are the struggling Houston Astros rated above the Detroit Tigers? Over the last five years, Detroit has averaged about 2.8 million fans per year compared to about 2.4 million for the Astros.  But according to the Team Market Report the Astros have priced their tickets about 12% higher.  The end result is that the revenues of the two teams are fairly similar.  The key difference is that Detroit’s revenues are driven by a 53% winning rate compared to the Astros rate of about 43%.  Based purely on the quality of the clubs and adjusting for market size, we would expect that Detroit’s revenue would far exceed the Astros.  The fact that they don’t suggests that the Astros’ have the larger and more resilient fan base.  A similar comparison can be made between the Angels and the Dodgers.  Over the five years of data examined, the Angels won 56% of their games versus about 52% for the Dodgers.  But despite this difference the Dodgers still drew more fans (~ 300k per year) and had much higher ticket prices.

Finally, the last question is: What about the Yankees?  While the Yankees do have the highest attendance and ticket prices in the league, they also have the highest winning percentage, largest market size and by far the largest payroll.  In a straight comparison of revenues or a count of fans the Yankees would win.  The key is that our model adjusts for these advantages and in comparison to other teams the Yankees do not convert these advantages to revenues as well as some other teams.

Mike Lewis and Manish Tripathi, Emory University 2013.

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