Estimation of game-level attendance in major league soccer: Outcome uncertainty and absolute quality considerations

Highlights

•	We find substantial interest in both home and visiting team quality.
•	We find evidence contrary to predictions of the uncertainty of outcome hypothesis.
•	MLS encouragement of higher absolute quality may be a useful strategy in growing attendance.
•	Highlighting high quality visitors may be a fruitful strategy for home team marketers.

Abstract

Despite its continued growth, there are doubts about the sustainability of demand for Major League Soccer, which has a strong focus on superstar externalities through its designated player rules. Yet there is relatively limited research directly focusing on classical determinants of demand for league attendance. The authors set out to establish an estimate of the relative importance of relative quality – outcome uncertainty – and absolute quality in game attendance. They find that fans behave in ways more consistent with the loss aversion hypothesis than the uncertainty of outcome hypothesis, with considerable interest in both home and away team absolute quality.

Keywords:

• Demand
• Economics
• Fan behavior
• Professional team sports

Acknowledgements

We would like to thank Jadrian Wooten for being generous in sharing earlier MLS attendance data with us. We would also like to thank Bill Gerrard for helpful comments on an earlier version of this project presented at the 2016 NASSM Conference in Orlando.

Notes

1 We leave for another time the discussion of Rottenberg’s Invariance Principle relating to the effectiveness (or lack thereof) of these policies in redistributing talent around the league and improving balance and uncertainty.

2 We note that at the time of our data collection, the MLS website did not include game-level attendance data prior to 2010.

3 A full description of these ratings can be found at http://www.eloratings.net. We note that starting values are somewhat arbitrary, but our results are not particularly sensitive to this choice.

4 This is the value used for World Cup finals games by eloratings.net, as they are the most important games for international soccer teams. We assume that all regular season games reveal similar information about MLS teams, and therefore apply this K constant in our context. We acknowledge that rigorous testing of an optimal MLS-specific K parameter would be a worthwhile paper on its own.