The purpose of this study was to analyze the relationship between game-specific attendance in Major League Soccer (MLS) and the presence of Freddy Adu in matches during the 2004 season. A demand model for attendance during Adu’s first year in MLS was estimated using ordinary least squares and fixed-effects multiple-regression analysis. The regression equation explained 67% of the variation in game-specific attendance and 9 of the 22 explanatory variables were statistically significant at the .05 level. It was found that an additional 10,958 spectators attended games in which Freddy Adu was playing, holding all else constant. Furthermore, it was estimated that these additional spectators generated about $3.25 million in revenue from ticket, concession, and merchandise sales in the 2004 season. This amount is far greater than the $500,000 annual salary paid to Adu, and the findings support the claim that from a financial perspective the signing of the 14-year old Adu was highly beneficial to MLS.
Timothy D. DeSchriver
Timothy D. DeSchriver and Paul E. Jensen
The purpose of this study was to analyze the relationship between spectator attendance at NCAA Division II football contests and selected determinants by estimating multiple economic demand models. The two primary determinants analyzed were winning percentage and promotional activity. Demand models were estimated using OLS and fixed-effect regression analysis. The results suggested that both current and previous year winning percentages are positively related to attendance. Furthermore, it is shown that the effect of previous season winning on attendance diminishes while the effect of current season winning increases as the season progresses. The results also indicated that promotional activities, the number of enrolled students, and market competition significantly affected attendance. Overall, the demand models explained between 37 and 70 percent of the variation in spectator attendance. The findings of this study may aid Division II athletic administrators who are attempting to increase revenues by attracting additional spectators to small-college football contests.
Timothy D. DeSchriver and David K. Stotlar
The goal of this paper was to analyze the cartel behavior of the National Collegiate Athletic Association. The NCAA, with over 1,000 members, has overseen intercollegiate athletic competition and established rules of play. In addition, the NCAA has maintained a cartel agreement to maximize profits for its members. However, to maintain a cartel, the expected costs of violating the agreement must be greater than the expected benefits of violation. Within this paper, an economic model using NCAA Division I men's basketball tournament revenue data was developed to determine when teams had an incentive to violate the cartel agreement—that is, commit a rules violation. Tournament revenue data from 1982 to 1990 was obtained for teams in six conferences (Big East, Big 10, Pacific 10, Southeastern; Atlantic Coast, and Big 8). The economic model revealed that teams in the Big East, Big 10, and Pacific 10 conferences had the greatest financial incentive to violate NCAA regulations. The information provided in this paper may be useful to intercollegiate athletic administrators who attempt to reduce the occurrence of rules violations and strengthen the cartel.
Timothy D. DeSchriver, Timothy Webb, Scott Tainsky, and Adrian Simion
The impact of sporting events on local economies has been a focus of academic research for many years. Sporting events create externalities within the local economies in the form of spillover effects. This study investigates the role of Southeastern Conference collegiate football games on local hotel demand from 2003 to 2017. Fixed effects models are used to expand upon previous research by incorporating six data sources to analyze the impact of team, game, hotel, and market characteristics on hotel performance. Results indicate that the demand for hotels varies greatly according to team and opponent quality. A number of sport marketing, sport economics, hospitality, and tourism management implications are discussed for universities and industry in their communities regarding scheduling and the potential for revenue growth.