The authors demonstrate that betting market outcomes are a statistically significant and economically relevant driver of local market television viewership in the National Basketball Association. Ratings are higher when the local market team covers the point spread and when point spread outcome uncertainty is increased. They further illustrate that point spread market outcomes have a larger relative impact on viewership in less-popular games and when the local market team is expected to perform poorly. This suggests wagering market access serves as insurance to the league and its franchises against reduced viewership in games that are less appealing to consumers. The results assess the degree to which wagering interest has driven past revenues as well as how the legalization of sports wagering may influence future revenues.
Steven Salaga, Scott Tainsky and Michael Mondello
Matthew Juravich, Steven Salaga and Kathy Babiak
This study integrates upper echelons theory into the sport management literature by investigating general manager (GM) strategic decision-making in the National Basketball Association. Specifically, this research examines individual contextual variables as they relate to the human resource decision-making tendencies of GMs. Utilizing 17 seasons of data on team performance and individual GM characteristics, we estimate two-stage panel regression models to examine the relationship between GM-related variables and organizational performance. We find that both GM technical experience and GM education are positively related to winning and efficiency. The results also illustrate the importance of acquiring elite-level talent and indicate positive returns to GMs whom are able to do so. These findings are relevant for team ownership and suggest a link between organizational performance and the personal characteristics of league GMs. The analysis furthers our understanding of the GM–team player talent–organizational performance relationship in professional sport.
Brian M. Mills, Steven Salaga and Scott Tainsky
We add to the recent ticket market literature by using a unique, disaggregated, and proprietary data set of primary market ticket sales transactions from a National Basketball Association team that includes previously unavailable information on date of purchase, customer location, and other consumer demographics. We find that local and out-of-market fans differ in their total purchase amounts, with out-of-market fans spending more than local consumers, on average, and differential spending effects based on the home team win probability. In particular, this differential behavior has important implications for Rottenberg’s uncertainty of outcome hypothesis. We find evidence that interest in visiting team quality dominates interest in perceived contest uncertainty, fitting the reference-dependent preference model in the context of low local team quality. Further, these findings also have important implications related to market segmentation and dynamic ticket pricing in professional sport.
Scott Tainsky, Steven Salaga and Carla Almeida Santos
The scholarship on the economics of individual sports is scant relative to that of team sports. This study advances sport management scholarship, particularly sport economics, by using consumer-theory modeling to estimate Ultimate Fighting Championship (UFC) pay-per-view purchases. Our generalized linear models show fan preferences for certain weight classes, star fighters, outcome uncertainty and comain event quality factors as well as scheduling preferences for holiday weekends. The popular notion that The Ultimate Fighter reality series served as the impetus for the UFC’s growth is supported in part. The study concludes by showing how the modeling results impact firm revenue generation via fight card characteristics.