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Abstract
After controlling for a number of plausible influences on matchday attendance in the English Premier League, and with appropriate recognition of the censoring problem in stadium capacities, we find clear evidence that an increase in uncertainty of outcome is associated with reduced gate attendance. The conventional uncertainty of outcome hypothesis proposes precisely the opposite effect. We interpret this as suggesting that fans at EPL games, who are predominantly supporters of the home team, prefer to see their team play a much inferior team (and beat that team) rather than attend a game that is predicted to be close in score. Essentially, home fans prefer to see their team win rather than watch a draw or see the home team defeated.
Keywords: attendance, outcome uncertainty, tobit
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Introduction
League commissioners and league authorities often invoke outcome uncertainty as a rationale for intervention measures. For example, in the National Football League, it is claimed that ticket revenue sharing, equal sharing of broadcast revenues, and a hard salary cap combine to equalize playing strengths across teams. Similarly, Major League Baseball has a luxury tax ostensibly designed for a similar purpose. The aim in North American sports leagues is, apparently, to prevent large market teams, such as the New York Yankees, from acquiring excessive talent relative to the rest of the league. In European soccer, intervention measures are less apparent. For example, in the English Premier and Football Leagues, revenue sharing is confined to sharing of gate receipts in the secondary knockout FA Cup competition and further to equal sharing of some of the revenues from sales of broadcast rights (Buraimo et al., 2006; Forrest et al., 2005). Even in the context of broadcast revenues, a tranche of money is set aside for payments by league standings in a convex tournament-style structure and for number of televised appearances, which will also tend to depend on team performance. An argument that has surfaced in fan and media discussion in England is whether there is too much competitive imbalance and too little revenue sharing in English football.
Of course, there is considerable theoretical and practical discussion of whether various league intervention measures are likely to be effective in reducing perceived competitive imbalances in sports leagues...