Fan substitution between North American professional sports leagues

Abstract

We use Canada-to-US border crossing data to estimate market penetration and fan substitution across sports leagues. We find that passenger car crossings into the US increase by more than 2000 when the National Football League’s Buffalo Bills are playing a home game just across the border. This accounts for as much as 5% to 8% of Bills home attendance. Additionally, we find evidence of price competition, but not quality competition, between the Bills and Toronto-based teams in the three other major North American pro sports leagues. Given the exclusive market rights and antitrust privilege extended to professional sport in North America, these findings have important implications with respect to competition policies as they apply to major sports leagues.

Keywords:

• antitrust
• market power
• fan substitution
• attendance demand
• international trade

JEL Classification:

• L40
• L83

Acknowledgements

We would like to thank Steve Salaga, Brian Soebbing and participants at the Western Economic Association meetings in Denver, CO and the University of Florida Competition Policy Workshop in Gainesville, FL for their comments and suggestions regarding earlier versions of this manuscript.

Notes

¹ This data were found to be stationary using the Phillips–Perron test with truncation suggested by Newey and West (1994).