Archive for Social Media

The Best Sports Cities: Boston Wins in a Rout; Twin Cities Better than NY & Chicago

Boston InfographicWe started the Emory Sports Marketing Analytics blog back in March of last year.  Our goal was to bring analytics to the world of sports business.  To put a finishing touch on 2013, we are going to present our rankings of the best and worst sports fans by city.  These rankings are based on our revenue premium model of fan equity and our analyses of social media equity.

Phoenix InfographicFor our rankings, we have divided cities into categories based on how many of the four major sports (NFL, NBA, MLB, & NHL) have franchises representing the city.  This categorization does introduce a bit of oddness since Los Angeles becomes a “three-sport” city.  Another tough issue is how to treat teams like the Packers.  Is Green Bay a one-sport city or is Milwaukee as three-sport city (we decided that we would treat Milwaukee as a three-sport city)?

Today we reveal our rankings of the four-sport cities, and a summary of the best and worst markets in the other categories (one, two, & three-sports cities).  Before the actual rankings, a couple of clarifying comments are in order.  The key to our rankings is that we are looking at fan support after controlling for short term variations in team quality and market characteristics.  Basically we create statistical models of revenues as a function of quality measures like winning percentage and market potential factors like population.  This allows our results to speak how much support fans provide as if market size and winning rates were equal.

The number one team on our four-sport city list is Boston; and it wasn’t even all that close.  All of the Boston teams have impressive fan followings.  The Red Sox ranked 1st in terms of fan equity and 1st in social equity. The Celtics finished 3rd in the NBA in both our fan and social media equity rankings.  The Patriots rank 2nd in fan equity and 3rd in social media equity in the NFL.  The Bruins rank relatively low in fan equity (perhaps because they could price higher), but very high in social media equity.  Number two on the list is Philadelphia.  The Eagles, Phillies and Flyers are all very strong fan bases.  The Sixers are weak within the NBA, but the three other sports carry Philly to a second place finish.

The city in third place is likely going to generate Twitter complaints about how clueless we are, and how academics should stay away from sports.  We rank the Twin Cities of Minneapolis and Saint Paul as having the third most supportive fans among the four-sport cities.  Minneapolis/Saint Paul show great support of the Twins and solid support for the Vikings.  The Wild also do surprisingly well in the NHL.

How could Minnesota finish in front of New York and Chicago?  It’s because these cities don’t do a great job in terms of supporting all their teams.  For example, The Brooklyn Nets perform poorly when market size is considered and the White Sox have very poor support on all metrics.  We can hardly wait for the semi-literate Twitter attacks to commence.

At the bottom of the list we have Phoenix.  We should note that the Suns perform well and finish 7th in terms of fan equity in the NBA.  But beyond that, Phoenix sports are a disaster.  In terms of fan equity, the Diamondbacks finish 26th in MLB, the Cardinals 30th in the NFL and the Coyotes 28th in the NHL.  As we have learned over the past year, it seems that weather and tradition are what creates a strong fan culture.  Perhaps the Phoenix teams overall are too new, and the weather is too warm.

Our other winners and losers are given below with linked infographics that summarize raw data and final rankings.

For the three-sport cities, the overall winner is St. Louis, and the worst fan support occurs in Tampa Bay.

For the two-sport markets, the leader in fan support is NashvilleOakland is at the bottom of the rankings.

For the one-sport cities, Portland leads the way, while Memphis trails the field.

Mike Lewis & Manish Tripathi, Emory University 2014.

NFL Fans at the “Twitter Water Cooler”

Note: This was originally published on September 4, 2013

The start of the NFL regular season is upon us.  In cities across America, NFL fans will engage in the practice of “Monday Morning Quarterbacking,” giving an analysis of their team’s performance on the previous day.  Some fans will of course be delighted after a team victory, while others will be dejected after a crushing defeat.  We decided it would be interesting to analyze how the thirty-two NFL fan bases felt the day(s) after their teams played in the regular season.  While we don’t have the ability to observe the millions of “water cooler” conversations that occur every week, we do have access to millions of Twitter conversations about NFL teams.

We used Twitter data to describe fan base reactions to team wins and losses during the sixteen-game 2012 NFL Regular season.  Our process for data collection can be illustrated with an example using the Buffalo Bills.  Imagine that the Bills played a game on a Sunday.  We recorded whether the Bills won or lost the game.  We then collected all tweets in the Buffalo area that mentioned the words “Buffalo Bills”, “Bills”, or other very frequent terms used to describe the team.  We collected the tweets from Monday (one day after the game), Tuesday (two days after the game), and Wednesday (three days after the game).  We then analyzed each tweet and characterized its content as positive or negative.  Next, we calculated the overall sentiment (roughly the indexed ratio of positive to negative tweets) of the Buffalo Bills related tweets for each of the three days.  We repeated this process for all thirty-two teams, and for all regular season games*.

The chart above displays the average sentiment of fans both after wins and losses.  The chart is based on data from the regular season for all thirty-two teams.  It is interesting to note that by three days after a win or loss, fans on average seem to either come down from their win “high” or recover significantly from their loss “low”.  While the chart above looks at all NFL fan bases in aggregate, we thought it would be interesting to classify each NFL fan base on the following dimensions**:

1)   Happiness After a Win (Highest ratio of positive to negative tweets after win)

2)   Sadness After a Loss (Lowest ratio of positive to negative tweets after loss)

3)   Stability (Least difference in positive to negative tweet ratio between after wins and after losses)

1) Happiness After a Win

The New Orleans Saints’ fans seemed to have just over a 9:1 positive to negative tweet ratio in the two days after the team won a game during 2012 regular season.  We believe that rankings on any of these dimensions are most likely driven by fan expectations (which is in part a function of past and current performance) and by the “expressiveness” of fans.  Since we are presenting descriptive statistics, and not explicitly modeling these drivers, it is tough to make a definitive statement as to why we see this particular order of teams.  Although, is anyone really surprised to see Cleveland or Oakland in the top 5?

2) Sadness After a Loss

The Pittsburgh Steelers’ fans seemed to take losing really badly in the 2012 season.  This could be because of fan expectations.  The Steelers finished 12-4 in 2011, but failed to make the post-season in 2012.  Early losses to the Raiders and Titans produced especially negative Twitter reaction, as did late season losses to the Browns and Bengals.

3) Stability

We measured “stability” by looking at the difference between average sentiment after wins and average sentiment after losses.  Dallas Cowboys’ fans seemed to never get too negative after losses, nor were they tremendously positive after wins.  Colts’ fans were even more understanding after a loss, but more positive on average than Cowboys’ fans after a win.  This could be due to the Colts being a young team that did not have high expectations going into the 2012 season.    The Atlanta Falcons only lost three times during the regular season, and the last loss was meaningless, as the Falcons had already secured home-field advantage throughout the playoffs.  Thus, there was very little negative reaction to the last loss.  The Philadelphia Eagles’ fan base is an interesting story.  It may be surprising to many to see them in the list of “stable” fans.   A better moniker for these fans in 2012 might be “resigned”.  It seems that as Philly began to lose more games, fans started to look forward to the next season, and a new head coach.  A majority of the fan tweets after a game were about changes for the next season, and not about the most recent loss.

The Oakland Raiders’ fan base best resembled “Dr. Jekyll and Mr. Hyde” during the 2012 season.  Fans were extremely happy when the team won, and terribly negative after a loss.  The Raiders were the only team in the top 5 of the “Happy” and “Sad” fan rankings.

 

Mike Lewis & Manish Tripathi, Emory University 2013.

*There are, of course, several caveats regarding this study.  First, while we only used tweets from the team’s geographic market, there could always be fans of other teams who may have tweeted about the local team.  Similarly, there are fans of the team that do not live in the local market, whose tweets would have been excluded.  Second, though we used terms that were associated/descriptive of the team, there are tweets related to the team that we undoubtedly excluded because they did not mention the terms we were looking for.  Third, the volume of tweets is not the same for each team.  We are confident, however, that a minimum threshold was met for each day, such that the sentiment score was not heavily influenced by a small number of tweets.  Fourth, this study is only over one year; it would be beneficial to perform a multi-year study.  Finally, there was one game in the 2012 season between the San Francisco 49ers and St Louis Rams that ended in a tie.  We have excluded that game from this analysis.  The Twitter data was collected using Topsy Pro Analytics.

**We computed each of these metrics using one day after, an average of one and two days after, and an average of the first three days after.  Since the rankings were fairly robust across these specifications, we only report the average of one and two days after the game.

What if the Heisman Trophy Really Was A Popularity Contest?

Ballots for the Heisman Trophy were due yesterday.  Ostensibly, the Heisman Trophy “annually recognizes the outstanding college football player whose performance best exhibits the pursuit of excellence with integrity”.  However, many have argued throughout the years that the Heisman is essentially a large popularity contest.  This view is supported by the millions of dollars annually spent by universities on publicity campaigns for their Heisman candidates.  There are 928 voters for the Heisman Trophy.  This includes members of the media, former winners, and 1 “fan vote” that represents the public at large.  We were curious to see what would happen if the general public was completely responsible for determining the winner of the Heisman Trophy.  As with past studies, we decided to use Twitter as a proxy for the views of the public.  Below, we present our methodology and results.

The first thing to consider is how does one define “Popularity” on Twitter.  Often, studies will use the volume/number of mentions on Twitter as a proxy for popularity.  However, this measure does not account for sentiment (positive, negative, or neutral), which could be important in the decision to vote for someone.  So, we constructed a daily “popularity” measure that is the product of the volume of tweets mentioning a candidate and the average sentiment of those tweets (Note: we tried several specifications of the “popularity” measure, but the rankings were robust).

Once we had a method for determining popularity, we decided to look at the six Heisman Trophy finalists: Johnny Manziel, Jameis Winston, A.J. McCarron, Tre Mason, Jordan Lynch, and Andre Williams.  The pie chart on the left looks at the sum of the popularity measure for each candidate over the entire season (mid-August to Dec 9th).  Johnny Manziel is by far the leader of the pack.  This could potentially be attributed to the stellar start of his season, as well as his huge following.  Heisman-favorite Jameis Winston is in second place, and A.J. McCarron is third.  It’s incredible that Manziel leads Winston by more than a 2:1 margin.  We realize that Heisman voters mark their ballots for 1st, 2nd, and 3rd place, and we are simply looking at most “popular”.

We performed a similar analysis, looking at only the last month and looking at only the last week.   It’s remarkable to see the variation in “popularity” over time.  Tre Mason had a relative 5% popularity if you look at the full season, but 11% over the last month, and 24% over the last week.  In the analysis of popularity over the last week, James Winston barely edges out Manziel for 1st place.  To better understand the factors behind these movements in popularity, we would have to perform content analysis on the tweets to determine what topics were being discussed with respect to these athletes; that is left for a future study.

It is interesting to note that in the their final straw poll, Heisman Pundit has the following ranking: 1) Winston, 2) Lynch, 3) Manziel, 4) Mason, and 5) McCarron.  The “popularity” measure for over the last week gives the ranking: 1) Winston, 2) Manziel, 3) Mason, 4) McCarron, and 5) Lynch.  Jordan Lynch is the only player of these top 5 that plays for a “Non-AQ” school (Northern Illinois).  Perhaps Lynch in second place is evidence that voters look at performance on the field, and not just popularity, however if Heisman Pundit’s straw poll is correct, it seems a lot can be explained by recent popularity.

Mike Lewis & Manish Tripathi, Emory University 2013.

 

 

Twitter Analysis: Who Really Talks About Their Rivals?

It’s rivalry week, and while there is much debate about the best rivalry in college football, it is generally agreed that the Iron Bowl (Auburn versus Alabama) and Ohio State versus Michigan are two of the top rivalry games in college football.  While both sides in these rivalries seem to hate each other, we were curious to determine if the level of vitriol was even or more one-sided in these two storied matchups.  What we found was interesting:  1) discussion around Michigan football seems to encompass A LOT more of the general conversation in Columbus than discussion of Buckeye football in Ann Arbor and 2) after accounting for where the game is being played, the relative level of discussion about the rival school is fairly even in Auburn and Tuscaloosa.

Similar to previous studies, we used geo-coded data from Twitter to serve as a proxy for fan conversation.  We collected all Twitter conversation in Ann Arbor, Columbus, Auburn, and Tuscaloosa for the Monday before the rivalry game in 2010, 2011, 2012, and 2013.  We then calculated the percentage of tweets in that city that were about the opposing school’s football team (“Rival Team Share of Twitter Voice”).   Thus, we had a metric for how much of the conversation in a city was about the rival team.  It is interesting to note that we also determined the average sentiment for tweets in a city that were about the rival football team.  The average sentiment was very negative, but similar across years and cities (translation:  the toxicity of the comments about rivals is the same whether you are in Columbus, Ann Arbor, Auburn, or Tuscaloosa).

We would expect that a rivalry where both local fan bases hated (or were obsessed with) each other at a similar level would have relatively similar “Rival Team Share of Twitter Voice”.  However, we found that in the past four years, regardless of where the game is played, or who won the previous year, the percentage of conversation in Columbus regarding Michigan Football is at least twice the percentage of conversation in Ann Arbor regarding Ohio State football.  Thus, there seems to be a bit of an asymmetric rivalry here with respect to how much one of local fan bases spends its time talking about their rival.  It should be noted that 7% of the population of Columbus are Ohio State students (57,466 out of  809,798) while 37% of the population of Ann Arbor are Michigan students (43,426 out of 116,121).

The Auburn-Alabama rivalry seems to be more even with respect to the level of conversation regarding one’s rivals.  We found that the site of the game seems to change the direction of the ratio of the “Rival Team Share of Twitter Voice”.  If the game is in Tuscaloosa, then local Alabama fans spend more of their time talking about Auburn football than local Auburn fans spend discussing Alabama football.  If the game is in Auburn, then that trend is reversed.  Perhaps the Iron Bowl being played in their hometown adds some more desire to trash talk for the local fans.  It should be noted that 45% of the population of Auburn are Auburn students (25,469 out of 56,908) while 37% of the population of Tuscaloosa are Alabama students (34,852 out of 93,357).

Mike Lewis & Manish Tripathi, Emory University 2013.

Twitter Analysis: The Seat is Warm for Philbin & Shanahan

During the NFL season, columnists & “insiders” provide their speculation on coaches that are on the proverbial “hot seat”.  It seems like coaches can be on the “hot seat” before the season even starts, and they can jump on and off the seat on a weekly basis.  We assume that the columnists & “insiders” are basing their speculation on institutional knowledge.  While Emory Sports Marketing Analytics does not have access to NFL team management, we do have the ability to gauge fan/customer opinion through Twitter.  We would like to present the NFL Coaching Hot Seat from the fan perspective.

The methodology for creating our “hot seat” is straightforward.  Using Topsy Pro, we collected all tweets from the last thirty days that mention a head coach.  Each tweet was then characterized as having positive, negative, or neutral sentiment based on its content.  We computed the ratio of negative to positive tweets for each coach (e.g. If the ratio is 2, the coach has twice as many negative tweets as positive).  We believe that this ratio can serve as a proxy for public sentiment towards a coach.

A quick scan of today’s sports news shows that most columnists & “insiders” believe that Greg Schiano (Tampa Bay) and Leslie Frazier (Minnesota) are receiving the most heat from their coaching seats.  Our analysis of public sentiment over the last thirty days shows that Joe Philbin (Miami) has the highest negative to positive tweet ratio (2.47).  At a distant second is Mike Shanahan (Washington), and Mike Tomlin (Pittsburgh) is in third.  Thus, it seems that if the public were making coaching decisions,  Philbin and Shanahan would be on the hottest seats!  We realize that much of the negative tweeting about Coach Philbin is probably connected to the Martin-Incognito incident, but ultimately this does reflect on Philbin’s job status.

It is interesting to note that in terms of sheer quantity of  tweets (number of mentions), Rex Ryan is the leader in the NFL over the last thirty days.  Schiano  and Philbin are second and third, respectively.

Mike Lewis & Manish Tripathi, Emory 2013

Ranking American Sports Cities: The Top “One Team” Markets – Candidates for Expansion Teams?

Over the last 9 months we have looked at fan support across the 4 major US professional sports leagues using a variety of financial and social media metrics.  The thing that sets our  evaluations of fan support apart is that we focus on observable, objective measures of support AND we control for factors related to market size and team quality.  Our measures are therefore not biased towards large cities and we adjust for the bandwagon nature of fans in markets with teams that are currently winning.

To end the year, we are putting all of these rankings together in order to create a ranking of cities.  For this list we combine our revenue premium based fan equity measure with our social media measure.  To combine these we assume that a social media follower or like is worth $1.  Today we begin our list of the best and worst one team sport towns (cities that have a professional team in only one of the four major sports).  The set of single team sports towns includes Columbus, Jacksonville, Memphis, Oklahoma City, Orlando, Portland, Sacramento, Salt Lake City and San Antonio.

#1 Portland

The number one small market (only one professional team) sports city is Portland.  Portland provides exceptional support to the Trail Blazers.  In terms of the fan equity measure the Trail Blazers ranked 4th in the NBA and the social media ranking was 11th.

According to the US Census, the Portland metropolitan area is the 24th largest with a population of almost 2.3 million.  But despite this mid-level population base the Trail Blazers had the 4th highest attendance in the NBA last season and the second highest in 2012.  Notably, this support occurred despite the team missing the playoffs in each season.  The attendance also was NOT generated by deep discounts as the Trail Blazers price at just below the league average.

Our analysis suggests that the Portland market has a great deal of potential.  The population base is decent, median income is above average and the fans seem to be extremely supportive.  We know that there has been some interest in trying to attract an MLB team to Portland.  With the number of struggling franchises across all the major leagues, it is somewhat surprising to us that Portland isn’t mentioned more frequently.

#2 Sacramento

The Sacramento market’s 2nd place ranking was a bit of a surprise.  Sacramento just doesn’t ever seem to be top of mind when we think about sports cities.  The most recent time Sacramento has really been in the news was during the controversy surrounding the proposed sale of the team to a Seattle based group.

The Kings have struggled in recent years.  The last two years’ annual attendance rankings have been 30th and 27th.  But we need to consider that these attendance numbers have occurred in seasons when the team has played well below .500 basketball.  If we go back a few years to when the Kings were winning, the team was able to generate consistent sell-outs.  When we run our analysis over a ten year period the Kings end up with a fan equity ranking of 6thWhat this means is that Sacramento fans are well above average in terms of supporting their team.  If the Kings are reasonably successful then our data suggests that the fans will turn out.

The Sacramento market has a population of more than 2 million and a respectable median income of more than $46,000.  These demographics are favorable to many small markets so it is a bit surprising that Sacramento has been in danger of becoming a “zero” team market.

#3 Salt Lake City

Salt Lake City is our number three “one sport” city.  Salt Lake City is a small market with a population of just 1.1 million but the metro area’s median income is a solid $48K (ranking 21st).

The Jazz rank 11th in our NBA fan equity ranking and 19th in the social media ranking.  These rankings are not surprising.  The Jazz has been a very successful franchise with notable players such as John Stockton and Karl Malone.  But recent seasons may not be meeting fan expectations causing the relatively poor social media results.

Based on the metro area population we don’t know that the city could support multiple pro franchises but Salt Lake City is a tremendous “one sport” city.

#4 San Antonio

Now we are getting into the “good” one team cities, but my guess is that folks in San Antonio will be upset by a 4th place finish.  This is the beauty (or enraging) part of our rankings.  When we assess revenue or social media we explicitly control for team performance.  This is important because it is obviously easier and more enjoyable to be a fan of a team that is winning.  It is also likely that fans are willing to pay more for a winning team.  The goal of our rankings is to get at the underlying passion and support of each city’s fans.

The Spurs ranked 10th in our NBA fan equity measure and only 24th in social media.  This is a very solid showing on the fan equity metric.  In terms of social media, San Antonio is an under performer. Based on the San Antonio market’s demographics and the Spurs on-court success our model suggests that the Spurs should have an additional 1.7 million Facebook Likes and Twitter followers.  In other words, in comparison to other NBA teams’ social media communities the Spurs fall short of what is expected for a market with San Antonio’s population and the Spurs’ winning rate.

#5 Orlando

The number 5 city on the list is Orlando.  While many observers might question the intensity of the Magic fans, the numbers tell an interesting  story.  For example, last season the Magic won only 24% of their games.  However, despite this futility, the team reported a 93.4% attendance rate.

Orlando also has a relatively rich history for a newer team. In addition to two conference titles, the team has featured notable players such as Shaquille O’Neal, Tracy McGrady and Dwight Howard.

Within the NBA, the Magic rank 17th in terms of fan equity and 21st in social media equity.  As we noted below, Florida teams tend to struggle in our rankings.  Demographically Orlando is a decent market with a population of over 2.2 million.  However, while the Magic doesn’t compete with other pro teams, the Magic does face tough competition. In the case of Orlando, pro sports compete with the weather, golf and the mouse.

#6 Oklahoma City

Oklahoma at number 6 may be a bit of a surprise. The Thunder has enjoyed recent success, Kevin Durant is a marquee player and over the past few years the team has usually played  before a packed arena.  But the sellouts have only been achieved as the team has become a winner.

Our analysis explicitly controls for bandwagon fans.  After controlling for winning percentage and market characteristics we find that the Thunder ranks 19th in terms of revenue based fan equity and 15th in social media equity.

From a marketing perspective, the Oklahoma City NBA franchise made an interesting decision to drop ties to the team’s previous incarnation.  Typically, the belief is that the previous brand contains some value.  By keeping names like the Jazz or Colts some connection to historical achievements is often retained. We should note that we don’t know why the Sonics name was dropped – perhaps this was negotiated with the city of Seattle.

On the plus side, our analyses also confirm that the key to building fan equity is a tradition of winning.  The Thunder has not gotten over the hump but they have made strides.  We also suspect that the social media results are a leading indicator for fan equity.   

#7 Columbus

Columbus finishes #7 on the list of one team towns.  Columbus is the 32nd largest metropolitan area by population and the 57th ranked based on median income.  In terms of our rankings the Blue Jackets ranked 23rd in the NHL based on revenue premium based fan equity and 29th for social media equity.

The Blue Jackets were founded in 2000 and they therefore lack the multi-generation history of other franchises.  The team has also struggled on the ice as it took 9 years for the team to reach the NHL playoffs.  As such it’s not surprising that Blue Jackets are below average in terms of fan support.  Of course, the real issue with the Columbus market is that it is dominated by Ohio State sports.

#8 Jacksonville

The state of Florida is an interesting situation for professional leagues.  The state population has boomed and college sports have great following.  However, almost all professional franchises have struggled and many believe that the pro leagues have created too many Florida teams.  In terms of key demographics, Jacksonville ranks 82 in median income and 40th in population.  This is a bad combination of population and income given that the average ticket price in the NFL exceeds $80.

Within the NFL, the Jaguars ranked 27th in terms of revenue premium based fan equity but the team did score a much healthier ranking of 17th for our social media measure. It’s not surprising that Jacksonville ranks low as a market given these marginal demographics, a lack of franchise history and stiff competition from college teams. 

On the plus side, Tebow is still available.

#9 Memphis

In last place on our list we have the city of Memphis.  The Grizzlies are the only pro game in town.  Within our NBA rankings the Grizzlies were ranked 25th in terms of revenue premium based brand equity and 20th in terms of social media equity.  Of the nine onesport markets, Memphis was ranked last in terms of revenue premium equity and 7th for social media equity.

Memphis as a market has some natural disadvantages for teams in terms of population base (ranked number #41) and income levels (ranked number 104).  But even after controlling for these factors Memphis fans support levels are well below the levels provided by other cities.  For example, the Grizzlies average ticket price of $29.49 is far less than the league average of $50.99).  Even at these low levels attendance has been poor.  Despite winning 56% of games in the 2010-2011 season, the Grizzlies only sold 74.4% of their available seats (ESPN.com).  It was only last year when the Grizzlies broke the 90% capacity utilization rate and the team needed to win 68% of its game to do that well.  In comparison, Orlando sold about 94% of seats with a winning percentage of 24%.  In terms of social media, the Grizzlies have just over 407,000 Facebook Likes compared to Portland with 550,000 and Oklahoma City with about 2.3 million.  For reference the Lakers have 17 million Facebook Likes.

But while Memphis ranks last on our list, there are a few positive indicators.  Last year was the team’s most successful season and ESPN has ranked the Grizzlies organization as the top professional franchise.  It is also true that the Grizzlies have only been in Memphis since 2001.

Mike Lewis & Manish Tripathi, Emory University 2013.

NHL Pricing: A Social Media Based Approach to Assessing Ticket Pricing “Fairness”

Of late we have been looking at value provided by sports franchises in different leagues.  For most of these analyses, we have basically focused on how much fans are asked to pay for each win.  We also make adjustments for factors related to market size, median income and capacity.  Today’s analysis looks at pricing in the NHL.

Of all the pricing analyses we have done, the NHL is the strangest.  The most surprising result is a lack of a positive correlation between winning rates and ticket prices.  Our standard procedure is to develop a model that predicts ticket prices as a function of winning percentage, payroll, market size, median income and other factors that we would expect to be related to demand for tickets.  We do a lot of testing in these models in terms of evaluating different specifications (interactions, nonlinear effects, etc…). In none of these specifications did we find a significant positive relationship between winning rates and prices.  The most powerful predictor was median income.

The other thing that we have been experimenting with in these models is using social media data as an explanatory variable.  The logic is that social media metrics (follows and likes) provide an unconstrained measure of fan support.  This provides a means to assess the relative aggressiveness of how team’s price.

Something to consider in these pricing analysis is the question of how prices are set.  At one extreme, we might suppose that prices are set in order to maximize revenues.  This is a reasonable starting assumption but the implication is that teams are extracting every dollar possible.  On the other hand, teams may price below fan’s reservation prices if the team is trying to build brand loyalty.  The key point is that while consumers might be willing to pay very high prices, if they don’t view the prices as “fair” then loyalty can be adversely affected.  Perhaps the best way to look at our list is that the teams at one extreme price the least aggressively (most benevolently?) while the teams at the other extreme are trying to extract every dollar they can from their fans.

At the top of the list we have Ottawa, Dallas, Boston, San Jose and Chicago.  After adjusting for market sizes, income levels and social media presences we find that these teams underprice. This is an interesting list as it contains both high brand equity teams like the Blackhawks and the Bruins as well as less prominent teams like Dallas and San Jose.  It is also notable that the Blackhawks and Bruins price above the league average while Dallas and Ottawa price near the bottom.  Interestingly, over the past 3 years Ottawa has basically sold out its arena.  The implication is that Ottawa (and the other teams on the list) could likely impose a price increase without too much loss of demand).

At the other extreme we have Philadelphia, Florida, Winnipeg, Toronto and Edmonton.  Again, this list contains both high (Toronto, Philly) and low profile teams (Florida).  Toronto is especially notable as they charge by far the highest prices in the league.  Winnipeg’s price are also extreme as they price higher (according to Team Marketing Report) than teams in New York, Chicago or Los Angeles.

Mike Lewis & Manish Tripathi, Emory University 2013.

NBA Pricing: Teams that Provide the Best Value

Today we are taking a look at pricing in the NBA: according to the Team Market Report’s fan cost index there is a wide range of prices across the league.  Last year, the Knicks had the highest average price at $123.22 while Charlotte’s average was just $29.27.  Rather than compare raw prices our objective is to look at the value provided by teams.

For our first look at value, we created a model of average prices as a function of variables such as team winning percentage, team payroll, metro area population and metro area average income.  This model is used to predict how team and market quality influence ticket prices.  A comparison of actual prices to predicted prices tells us which teams provide the best value.  This is along the lines of looking at the ratio of price to wins but with a bit more sophistication as we also control for factors such as market size and star power.

Astute readers will likely realize that this analysis is somewhat related to our fan equity rankings.  A key assumption of that analysis was that teams price in order to maximize revenue.  Today’s analysis can be interpreted in two ways: teams that price under the market are pricing low either because they are not trying to maximize revenue or because they are mispricing.  For now, we will just say that teams that price below market (according to the model) are providing added-value value.

Over the last 3 years, the top 5 teams in terms of value are the Brooklyn Nets, LA Clippers, Atlanta Hawks, Memphis Grizzlies and Washington Bullets.  These teams provide the best product in terms of winning relative to their market positions.  At the other end of the spectrum are the Knicks, Celtics and Suns seem to be the most overpriced.

Obviously, we have an issue in that the value provided is negatively correlated with brand equity since the Knicks and Celtics are two of the league’s most prominent brands while the Clippers and Hawks are not.  As a further look into pricing we performed an additional analysis, which was similar to the first pricing model but we added social media data (Twitter Follows and Facebook Likes) to the model.  These measures are useful because they are largely independent of owner’s objective functions and observable fan interest is not constrained by prices or capacity.  We also included an interaction between social media success and market size.  We like this model a bit better because it accounts for fan interest and excitement in addition to team and market quality.

When we use this model to compare actual vs. predicted prices we see a few changes.  Now Memphis is the best value followed by Brooklyn, Indianapolis, Charlotte and New Orleans.  Including social media into the model makes the biggest difference in the results for the Bulls and the Lakers.  These teams appear to be underexploiting their brand equity when it comes to pricing.  According to ESPN, both teams have had attendance levels of over 99% of capacity for the past three seasons so it seems that price increases are doable.  Ticket pricing is tough in sports because observable demand is constrained, but it appears that these teams have more pricing power than they realize.  It is also difficult to reach conclusions based on average ticket prices.  As we all know there is considerable heterogeneity in prices based on seat quality.

As always, no analysis is perfect and there are factors that we don’t capture in the market.  For example, perhaps in the case of the Knicks the team has additional pricing power because fans are willing to buy during down cycles in order to insure tickets during winning years.

Mike Lewis & Manish Tripathi, Emory University 2013.

Ranking the Most “Volatile” Fans in the SEC: LSU, Ole Miss, & UGA Lead the Way

Last weekend, Georgia beat LSU in a highly entertaining, closely contested football game.  After the game, fans were undoubtedly sad in Baton Rouge and elated in Athens.  These emotions were manifested through the tweeting activity of fans in both cities.  Using data from Topsy Pro, we were able to collect football-related tweets originating from Athens and Baton Rouge after the game.  There were almost twice as many tweets originating from Athens, and the ratio of positive to negative tweets was 9:1 in Athens, whereas the ratio was 1:9 in Baton Rouge.  As transplants who have lived in Atlanta for a few years now, we can attest to the overwhelming passion towards SEC football in the South.  Recently, we used data from Twitter to describe the emotions of NFL football fan bases during the 2012 regular season.  We decided that performing a similar analysis on the SEC football fan bases would be an interesting study.  We decided to empirically determine which SEC football fan bases really “live & die” by the performance of their teams.

The methodology for our study was straightforward.  We considered all of the regular season games from 2012 and the first five weeks of the 2013 season.  For each game, we recorded who won the game, and we collected football-related tweets from all of the SEC college towns for one, two, and three days after the game.  It would be reasonable to ask why we didn’t collect tweets from Atlanta for a UGA game or from all of Kentucky for a UK game.  We were trying to isolate tweets primarily from fans of the SEC team, and we believe that the college town is the best proxy for mainly fans of the college.  Atlanta is full of UGA fans, but there are also Alabama fans, Auburn fans, Florida fans, and pretty much fans of all SEC teams.  We wanted reactions of UGA fans to the UGA games, not the reactions of Auburn fans to the UGA games.  By football-related tweets, we mean tweets that mentioned any words that were commonly related to the particular college football team.  The tweets were coded as positive, negative, or neutral.  We were able to determine the “sentiment” of the collection of tweets as a rough index (1-100) of the ratio of positive to negative tweets.

Thus after each game, we were able to calculate the sentiment of the fan base.  We determined on average how positive a fan base was after a win, and how negative they were after a loss.  To understand the “volatility” of a fan base, we looked at the delta between the average sentiment after a win and the average sentiment after a loss.  In other words, how big is the difference in a fan base’s “high” after a win and “low” after a loss.  We believe that this metric best captures “living & dying” by the performance of your team.  After computing this metric for each fan base, we determined that LSU has the most “volatile” fans in the SEC.

The chart on the left gives the full rankings for the SEC.  It should be noted that these rankings were robust to whether we looked at how fans felt one, two, or three days after a game.  We believe that volatility is in part driven by 1) the expectations of the fan base and 2) the expressiveness of the fan base.  The top three schools in our rankings seem to get to the top for different reasons. The volatility of LSU & UGA fans is driven more by extreme negativity after losses, whereas the volatility of Ole Miss fans is a function of high levels of happiness after wins. This could, of course, in part be due to expectations.  UGA & LSU fans may have higher expectations than Ole Miss fans.  An examination of the data reveals that LSU fans had an extremely negative reaction to the Alabama loss last year and the Georgia loss this year.  These fans even had an overall negative reaction to a close WIN over Auburn last year!  UGA fans spewed a lot of vitriol on Twitter after the loss to Clemson this year.  Ole Miss fans, on the other hand, did not have overly negative reactions to losses, and were very positive after wins (e.g. the win over Texas this year).   It is interesting to note that the Alabama fan base is at the bottom of the volatility list.  Alabama only lost one game during the period of this study (a good reason for publishing this list again next year when we have more data).  But, even after wins, the Alabama fan base is not very positive on Twitter.  There are several tweets that are critical about the margin of victory.  If Alabama does ever go on some type of losing streak in the future (as unlikely as that seems), it will be fascinating to observe the reaction on Twitter.

Mike Lewis & Manish Tripathi, Emory University 2013.

 

 

 

 

Social Media Equity in Major League Baseball: Boston Wins, Cubs Fans Lose and Southern California Baseball is Social Media Challenged

A new way to assess the health of a brand is to examine its social media following.  Social media metrics have an appeal because consumers can show their interests without regard to price.  Of course, this is also the downside of social media, since it’s difficult to tell how consumer interest can be converted to revenue.  In the case of professional sports, social media metrics are of special importance because team revenues are often constrained by finite stadium capacities.  Another equity measurement challenge in sports is that teams are tied to specific metropolitan areas.  If we don’t control for differences in market size, we would almost always find that the New York teams have the best brands and teams in markets like Kansas City and Milwaukee would appear to have weak brands.

To examine social media equity in major league baseball, we developed a model that predicts social media following (in this case the sum of Facebook likes and Twitter followers) as a function of market size, Twitter activity as measured by tweets, and variables that control for short-term variation in winning rates.  We use this statistical model to predict social media following, and then compare our prediction to the team’s actual social media presence.

The number one ranked team in terms of our social media equity measure is the Boston Red Sox.  Boston is followed by the Cubs, Yankees, Cardinals and Houston.  The one surprise in this top 5 is the Astros. Conventional wisdom would suggest that the Astros don’t belong, but the key to our method is that we are controlling for team performance.  The data says that the Astros have a much greater social media following than we would expect for a team that has had back to back 100 game loss seasons.

That the Cubs having a great fan following on social media is not a surprise but this result continues to strengthen the case that Cubs fans are the most abused in baseball.  The fans consistently provide great support on every dimension, and the Cubs’ management continues to fail to produce a decent team.  In an earlier study we even found that the Cubs fan support is basically unrelated to the team’s performance.  We are not sure who should be the most embarrassed: the front office for their amazing lack of ability to build a constant winner or the fans for their relentless support.

The losers on the list are predictable with one exception.  While the Angels and Diamondbacks being near the bottom are unsurprising, the Dodgers at third from the bottom are a shocker.  In a previous study based on economic loyalty, the Dodgers were at the top of the list.  The Dodgers have great fan support as evidenced by the league leading attendance.  But when it comes to social media, the Dodgers struggle for some reason.  For example, while the Dodgers play in the second largest market they have similar social media presences as teams such as the Rangers and Cardinals.  Perhaps it is a Southern California issue, since the Angels finished dead last in our ranking.

Mike Lewis & Manish Tripathi, Emory University 2013.