Content area
Full Text
Abstract
This paper examines the relationship between the demand for English football on television and outcome uncertainty. It tests the uncertainty of outcome hypothesis by using minute-by-minute television viewership figures which avoids the problems encountered when estimating demand using match attendance. We find that although uncertainty matters, it is the progression of the match which drives viewership and as a draw looks increasingly likely, viewers are likely to switch channels. Games that end in victories have a higher average viewership than games that end in stalemates.
Keywords: sports, soccer, football, competitive balance, television
(ProQuest: ... denotes formulae omitted.)
Introduction
The most fundamental issue in the study of the economics of sport is the "uncertainty of outcome" hypothesis. According to this hypothesis, the greater the uncertainty of outcome of a sporting event, the greater the demand.1 Sports leagues have consistently justified competitive restraints on the grounds that they permit resource distribution, which in turn promotes outcome uncertainty and thereby benefits the consumer by providing a more attractive league product. Sports leagues are, on the face of it, cartels. 2 Agreements among the clubs to restrain economic competition, such as salary caps, roster limits, draft rules, transfer fee systems, or agreements to share income from ticket sales, broadcasting, or merchandising would in any other context be prohibited. Yet such agreements have been accepted by the courts3 and even encouraged by the legislature, 4 largely on the basis of the uncertainty of outcome hypothesis.
There exists a substantial economics literature aimed at testing the hypothesis by relating game attendance to some ex ante measure of uncertainty. Such studies are fraught with diffculty for a number of reasons. First, since the majority of attendees are fans of the home team, they presumably demand a strong probability that their team will win, and so home team demand may well be decreasing in the uncertainty of outcome, at least over a significant range of the data. Second, it is often hard to disentangle the quality of the two teams from the balance of the competition, and therefore hard to identify the true impact of outcome uncertainty. Third, game attendance is often determined by factors that have little to do with the outcome uncertainty of the game in question; for example,...