If You Build It, Will Soccer Fans Come?

IfYouBuildIt,WillSoccerFansCome?EvaluatingtheFactorsthatMakeMarketsViableforMajorLeagueSoccer

by

EricRoden

Abstract

MajorLeagueSoccer(MLS)isgrowingquicklybyimprovingitsexistingfranchises,andalsobyexpandingtonewmarkets,addingnewfranchises.MLShasthepotentialtoseesignificantgainsfromthisexpansionintonewmarkets;however,aswitheverybusinessdecision,therearerisks.Thereisalwaysthepotentialthatanewfranchisemayfailifplacedinthewrongcity.Thisisaconcernwithexpansioninanyprofessionalsportsleague,butparticularlysoinoneasyoungasMajorLeagueSoccer.Giventhesizablerisk,itissurprisingthatrelativelylittleresearchexistsontheevaluationofpotentialmarketsfornewsportsfranchises.Thisstudyfillsthisvoidbyanalyzinghowavarietyoffactorsthatcharacterizeageographicmarket–i.e.,population,communityattachment,thepresenceofotherprofessionalsportsfranchises,householdentertainmentspending,andeducationlevel(atametropolitanstatisticalarealevel)–affectMLSattendance.Resultsindicateapositiverelationshipbetweenpopulation,entertainmentspending,andeducationlevelwiththesuccessofMLSfranchiseswhileanegativerelationshipexistsbetweenthepresenceofotherprofessionalsportsfranchisesandcommunityattachmentwithfranchisesuccess.Subsequently,theobservedrelationshipsareusedtopredictwhichgeographicmarketswouldbemostsuitableforfutureMajorLeagueSoccerexpansioninAmerica,withAtlanta,SanFrancisco,Miami,andPhoenixappearingmostattractive.Keywords:MajorLeagueSoccer,newmarketentry,marketviability,professionalsportsexpansionSubmittedunderthefacultysupervisionofProfessorJoelWaldfogel,inpartialfulfillmentoftherequirementsfortheBachelorsofScienceinBusiness,summacumlaude,CarlsonSchoolofManagementUniversityofMinnesota,Spring2016.

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I.Introduction

SoccerisgrowinginAmerica;participationinthegamehasrisensteadilyinrecent

years.USYouthSoccerreportedanincreaseofover200,000registeredplayersfrom2013

to20141,andthetopprofessionalleagueinthecountry,MajorLeagueSoccer(MLS),has

seenitspergameaverageattendancegrowthelastthreeyearsrunning,increasingby

almost2,500lastyearalone.ThisrecentsurgehasindicatesthattheMLSisnowthefastest

growingAmericanprofessionalsport2.MLSattendancehasseenasteadyrisesinceits

foundingin1993(Figure1)andMLScommissionerDonGarberistryingtoensurethatthe

leaguecapturesasmuchoftheAmericanmarketaspossiblebycontinuingtoexpandthe

brandandimprovingprofitability.

Figure1:MLSAverageSingleGameAttendanceOverTime

MLSattendancehasseengradualgrowthoverthelastdecadefollowingasharpdropinattendanceinitssecondseason.Note:Attendancestartsat10,000,notat0.

1http://www.usyouthsoccer.org/media_kit/keystatistics/2https://en.wikipedia.org/wiki/Major_League_Soccer_attendance#MLS_attendance_vs._other_North_American_professional_sports_leagues

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

AverageperGameAttendanceOverTimeforMLS

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Sinceitsfirstseason,20yearsago,theMLShasrepeatedlyexpandedintonew

markets.Startingwithonly10teamsin1993,theleaguegrewto20teamsin2015.The

leagueplanstoexpandto24teamsby2018,withnewfranchisesalreadyannouncedfor

Atlanta,Minneapolis/St.Paul,andMiami.MLS’spathtothispointhasbeenbumpy,as

severalfranchiseshavefoldedoverthecourseoftheleague’shistory.Forexample,aftersix

yearsintheleagueandrelativesuccessonthefield,theTampaBayMutiny,afounding

memberoftheMLS,foldedin2001;theMiamiFusiondroppedfromtheleaguethatsame

year,afteronlyfouryearsofplay,thelastofwhichsawthemfinishinfirstplaceattheend

oftheregularseason;andin2014,LosAngelesbasedChivasUSAfolded,despitethe

comparativesuccessofcross-townrivalstheLAGalaxy,whomaintainoneofthelargestfan

basesinMLS.Althoughalackofonfieldsuccessmayhaveplayedapartinthedownfallof

someofthesefranchises,adrivingfactorwassimplelackofattendance.

Incontrast,successfulfranchises,suchasSeattleSoundersFC,SportingKansasCity,

andthePortlandTimbers,routinelypacktheirstadiumsandappearstableenoughtolast

yearsintothefuture,despitebeinglocatedinsmallermarkets.Thisinconsistencybegsthe

question:whatfactorsaremostimportantindeterminingtheviabilityofamarketfor

MajorLeagueSoccerfranchises,andwhatpotentialmarkets,presentlylackingteams,

wouldbemostviableforexpansion?

Inordertodeterminewhatfactorsmakeamarketviable,andultimatelywhich

marketswouldmakethebestexpansionlocations,itisperhapsusefultoexaminewhich

factorsassociatewithhighattendanceinexistingMLSmarkets.Moreover,ifwemakethe

assumptionthatamodelofattendanceincurrentMLSmetroareascouldbeextendedto

predictattendanceatnewsites,theresultsofthisanalysismightbeusedtoinformthe

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selectionoffranchiseexpansionlocationsinthefuture.ItislikelythatsomeofthebestMLS

marketsarealreadyplayinghosttoateam;however,theselectionprocessthusfarhas

beenmostlybasedonmetropolitanpopulationsizeandthepresenceofawilling

ownershipgroup.ComparingPanelAtoPanelBinFigure2shows,attendancedependson

acomplexarrayoffactors,beyondsimplemetropopulation.Youngfranchises,suchas

OrlandoCityFC,SeattleSounders,andPortlandTimbers,whorankamongthemost

attendedMLSfranchises,despiteallbeinginitiallyoverlooked,lendcredencetotheidea

thatgoodmarketslikelyremainuntapped.

Figure2:ComparingPopulationtoAttendanceinExistingMLSLocationsThetwofigurescomparethemetropolitanareapopulationofallcurrentUScitieswithaMLSfranchisetotheir2015MLSattendance.Comparingthetwomapsshowsthatalthoughtheremaybesomerelationshipbetweenpopulationandattendance,itisfarfromtheonlyfactoratplay.PanelA:2014MetropolitanStatisticalAreaPopulationsforMLSCities

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PanelB:2015AttendanceforMLSCities

Note:NewYorkCityhastwoteams;however,forreadability,onlytheattendanceforNewYorkCityFCisshown,thelargerofthetwoin2015.NYCFCaveraged29,016,whiletheNewYorkRedBullsaveraged19,657.GraphiccreatedusingTableaupublic.

Todevelopamodelofattendance,generaldemographicandconsumerinformation

forcitiesthatcurrentlyhostMLSteamswasanalyzed.Specifically,theimpactthat

communityattachment,theavailabilityofsubstituteentertainmentoptions(i.e.,other

sportsfranchises),educationlevel,population,andpsychologicalneedforaestheticshave

onMLSattendancewasinvestigated.Thisanalysiswasperformedviamultipleregression,

assessingtherelationshipbetweenfanattendanceandlocationfactors.Furtheranalysis

alsoexaminedtheabove-describedfactorsabilitytopredictwhichmarketshavea

franchise(i.e.thepresenceofanMLSfranchise).Thedevelopmentofthesecondmodel

allowsforcomparisonbetweenusingattendanceasadependentvariableandusingjust

thepresenceofateaminthemarket.Subsequentanalysisassessedwhichmarketsmake

thebestfitforfutureMLSexpansionwithconsiderationgiventobothmodels.

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Althoughthereexistsalargeamountofresearchthatstudiesthefactorsthat

motivateconsumerstoattendsportingevents,andasmallerbodyofresearchthathas

touchedonprofessionalsportsexpansion,thisstudyisnovelinthatitprovideswhatisto

myknowledgeafirstattempttoidentifyandcomparepossiblenewmarketsforthe

creationofsoccerfranchises,basedonanassessmentofthecommonfeaturesofcitiesthat

presentlyhostsuccessfulfranchises.Thefindingsofthisstudythereforehavethepotential

toinformthelocationchoicesfornewMLSfranchises.Thiswouldimpactlocalandnational

soccerenthusiastsbyprovidingimprovingtheirabilitytomakeacaseforreceivinganMLS

franchise.Moreover,inturn,itwouldbenefitthoselocaleconomies,throughthejobs

associatedwiththecreationofanynewfranchise.

Morespecifically,thisstudyaddressedfivehypothesesandutilizedtheresultsto

evaluatethepredictedsuccessofahypotheticalnewMLSfranchiseinvariouspotential

markets.Thefivehypothesesexaminedareasfollows:

• Hypothesis1:CommunityAttachment-Apositiverelationshipexists

betweencommunityattachment,asmeasuredbythepercentageofthe

populationwhowasborninthecityinwhichtheycurrentlylive,andMLS

franchisesuccess.

• Hypothesis2:TotalSports-Anegativerelationshipexistsbetweenthe

numberofotherprofessionalsportsteamsinamarketandMLSfranchise

success.

• Hypothesis3:NeedforAesthetics-Apositiverelationshipexistsbetweenthe

needforaestheticsandMLSfranchisesuccess.

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• Hypothesis4:Population-Apositiverelationshipexistsbetweenpopulation

sizeandMLSfranchisesuccess.

• Hypothesis5:Knowledge-Apositiverelationshipexistsbetweendesireto

acquireknowledgeandMLSfranchiseattendance.

ThetworegressionmodelsgeneratedsubsequentlybothsuggestthatAtlanta,San

Francisco,Phoenix,andMiamiholdthegreatestpotentialastopexpansionlocations.

II.LiteratureReview

TodeterminewhichfactorshavethegreatestimpactonattendanceinMLSmarkets

andinpredictingthepresenceofanMLSfranchise,theexistingliteratureonsports

consumptionandmotivationwasconsulted,resultinginseveralinsights.Mostofthe

existingliteraturefocusedontheimpactvariousfactorshaveoncertainpsychological

outcomes,suchasattachmentandmotivation,inaspecificpopulation.Additionally,the

psychologicalstudiestypicallyfocusedonasinglemarketandasinglesportsteam.Finally,

theliteraturearoundstudiesthatspecificallyfocusedonunderstandingprofessionalsports

expansionthrougheconomicmodelingfailedtoaccountforthedegreeofsuccessof

existingfranchises,insteadfocusingonjustthepresenceorlackofafranchiseinametro

area.

Thedesignofthisstudyaddressesbothoftheissuesmentionedabove.First,the

studydesignexaminesdatafrommultiplemarketsandmultipleteamstodevelopaclearer

pictureofthebreadthofapplicabilityofthepsychologicalfindings.Second,thisstudy

comparestheresultsofmodelsbasedonameasureofsuccess(attendance)tothosebased

onthepresenceofafranchise.

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i.Theonemarket,onesportapproach

Asmentionedabove,onerecurringtrendthroughtheliteraturewasthat

researcherstypicallylimitedtheirstudiestoonemarket,andthefansofonespecific

franchise.Forexample,James,KolbeandTrail(2002)studiedspecificallyindividual

supportersofaspecificnewMajorLeagueBaseballfranchise.KimandTrail(2010)usedan

evenmorespecificapproach,focusingtheirresearchonthefansinattendanceatasingle

WNBAgame.Funk,BeatonandAlexandris(2012)tookthebroadestapproachintheir

study,whichexaminedconsumersofvariousAustralianrugbyandfootballteams.This

paper,however,stilltreatedthesampleasonepopulationanddidnotlooktoexaminethe

differencesbetweenthetwosports'fansorthevariousmarketsstudied.Keepingthe

studiestoalimitednumberofmarketsandfranchiseslikelymadeiteasiertoidentify

factorsthatwereaffectingthepopulationbecauseitheldsocio-culturalandgeographic

factorsrelativelyconstant.Limitingthestudiesbreadthofmarketsandfranchisesand

focusingonthepsychologicaloutcomescomparedtoactualattendancealsohadits

weaknesses.Theliteratureleftagapindeterminingwhatfindingscanbegeneralizedto

otherpopulationsandalsodidnotallowforcross-marketcomparisons.

Additionally,theliteraturetypicallytookamorepsychologicalapproachtosports

consumptionbehaviorratherthandirectlyfocusingonattendance.UhlmanandTrail

(2012),forexample,focusedonvariables’correlationwithmotivationratherthanactual

attendanceandJamesetal.(2002)focusedprimarilyonlevelsofpsychological

involvement.KimandTrail(2010)focusedonthecausesofvariationinattendanceand

usedpsychologicalvariablesexaminedinotherresearch,suchasattachmenttotheteam,

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implyingthatincreasedmotivationultimatelyleadstoincreasedconsumption.

Additionally,focusingonmotivationandsimilarlyabstractconceptsprovidedabasisfor

determiningthefactorsthatwerelikelytobethemostsignificantindeterminingwhat

makesagoodMLSmarket.

ii.Similarfactorsinfluencesportsconsumptionacrossstudies

Anothertrendintheexistingresearchwastheemergenceofseveralfactorswhich

influencesportsconsumption,andthusattendance,inindependentstudieswith

independentpopulations.Forexample,Funketal(2010)andUhlmanandTrail(2012)

bothdeterminedthatthefans’senseofesteemandsuperiorityinfluencedconsumption.

UhlmanandTrailalsofoundthatconsumptioncorrelatedwithvariousformsof

attachment,consistentwithKimandTrail(2010).Theliteraturereviewuncoveredfurther

similaritieswhichinformedthehypothesesofthisresearch.Idiscussthosesimilaritiesin

coordinationwiththecorrespondinghypothesesbelow.Findingtheseconsistencies

allowedfortheevaluationofmarketsbasedonthesesharedfactors.

Overall,thesefindingsprovidedthebasisfortherestofthisresearch,buttheyalso

presentedsomeproblemsandillustratedareaswherethecurrentliteraturefellshort.With

theexceptionofKimandTrail(2010),themajorityofpriorresearchfocusedonfactors

thatarepositivelycorrelatedwithconsumption.Incontrast,KimandTraildiscussthe

constraintsthatlimitindividuals'abilitytoconsumesports,suchasdisposableincome.

Thesearealsoimportantfactorstoconsiderbecausetheyclearlyimpactattendance.

Additionally,factorsbeyondbasicdemographicconsiderationsimpacted

individual’smotivationtoconsumesports.Funketal(2012)andUhlmanandTrail(2012),

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foundthatfactorsrelatedtothefranchises’accomplishmentsalsoplayedanimportantpart

indeterminingconsumptionhabits–i.e.,thesuccessofthefranchisehadasignificant

impactonattendance.KimandTrail(2011)supportedthisbyfindingthatateam’ssuccess

actedasamotivatortoattendanceandon-fieldfailureactedasaconstraint,limiting

attendance.Infact,thestudyconductedbyKimandTrail,theyalsoevaluatedvarious

factorsimpactonattendanceandfoundthatlackofsuccessaccountedfor10%ofthe34%

ofvariancetheirmodelexplained.Theimpactrankedonlybehindteamattachmentintheir

study.Ateam'ssuccessisnotaninherentfeatureofamarketinwhichateamislocated,

butratherafunctionofmanagementandoperations.Therefore,itwasimportanttocontrol

forthisinordertocomparetheviabilityofmarkets,whichisindependentoftheimpactof

managementdecisionsoncethefranchiseenteredthemarket.Forexample,ifateamis

managedexceptionallywellandconsistentlyplacesnearthetopoftheleaguethenthey

wouldhaveahigherattendancethanifthesameteamwereperformingpoorly,andthat

variationhaslittletodowiththeviabilityofthemarketbutratherthemanagementofthe

franchise.

iii.Neglectingfranchisesuccesstofocusonjustthepresenceofafranchise

Thefinalinsightthatemergedfromtheliterature,andperhapsthemostimportant,

showedthatthefewstudiesthatfocusedonprofessionalsportexpansionusedthe

presenceofateamtoindicateagoodmarket,notthesuccessofthoseteams.Bruggink&

Zamparelli(1999),Baehr(2006),andDavis(2006)alltookthisapproachinmodeling

professionalbaseball,professionalsoccer,andminorleaguebaseballrespectively.Each

modelusedthepresenceofafranchiseasthedependentvariableandconducted

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multivariableregressions.Bruggink&ZamparelliandBaehrusedtheresultstoseewhich

geographiesweremostsimilartothosewithfranchisesalready.Theyusedthatresultto

determineratingsfornewfranchiselocations.Thisprovidedafoundationofproven

variablesusefulinpredictingthelocationoffranchisesandalsogaveinsightintothebest

waytostatisticallyanalyzethistypeofproblem.

Focusingonthepresenceofteamsinmarketsandusingthistogenerateresults

impliesanassumptionthattheexistingfranchiseswereallplacedindesirablemarketsand

thatthesamedecisionmechanismusedforplacingthesefranchisesshouldbeusedfor

placingfuturefranchises.Theapproachfailstolearnfrompreviousdecisions.Additionally,

byfocusingonjustthepresenceofateam,allteamsarevaluedequally.Forexample,in

soccer,asmentioned,theSeattleSoundersconsistentlyhavethehighestyearlyaverage

attendanceandthuscitiesmoresimilartoSeattlewouldbedesirableforexpansion.

However,usingtheabovedescribedapproach,thecharacteristicsofSeattlewouldbe

dilutedbythenoisecreatedbycitieslikeDenver,homeoftheColoradoRapids,oneofthe

leastsuccessfulfranchisesinMLS.Inshort,MLSwantsmoreteamslikeSeattle,yetby

focusingonwhatpredictsteampresence,citieslikeDenverwouldbeviewedasnomoreor

lessidealthancitieslikeSeattlebecauseanalysisfailedtoevaluateactualindicationsof

teamperformance.

iv.Summary

Consideringthesethemesandtheirshortcomings,itwasapparentthatthispaper

servedasabridgethatconnectedandintegratedthefindingsofprior,isolatedworks.This

paperholisticallyexaminedanumberoffactorsthathaverepeatedlybeenobservedtoplay

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asignificantroleindeterminingconsumptionandattendanceintheliterature,acrossa

varietyofstudiesandmarkets.Byconsideringthesefactorsjointly,andexploringtheir

effectsacrossanumberofgeographicmarkets,itbecamepossibletoreliablyidentifythe

characteristicsthatmakeanareaparticularlysuitableforMLSexpansion.Applyingthis

approachtoAmericanprofessionalsoccer,thepresentstudyexpandeduponthe“verylittle

research[which]hasbeendoneonthistopicofthelocationofexpansionteamsin

professionalsports”(Bruggink&Zamparelli,1999,p.50).

III.Methodology

i.FormulationofHypotheses

Toeffectivelyaddresstheresearchquestion,anumberofhypotheseswere

evaluatedviamultivariablelinearregressioninR.Eachofthehypothesesfocusedon

measuringamarket’spotential,ratherthantheabilityofmanagementtomaximizethat

potential,conditionalonentry.Dataregardingthefactorsneededtoevaluateeach

hypothesiscameentirelyfromtheUSCensusandUSConsumerExpenditureSurvey.

Accordingly,factorsunderthecontrolofteammanagement,suchasateam’son-field

success,wereincorporatedmerelyascontrolvariables;thesevariableswerenotthefocus

oftheanalysisbecausetheydidnotdeterminetheinherentviabilityofthemarket,and

couldnotbeusedtoinformdecisionsaboutwheretolocateanewfranchiseinthefuture.

DataregardingteamspecificvariablescamefromWikipediaandwasverifiedthroughthe

MLS’swebsite,teamwebsites,andotheronlineresources.

Eachhypothesisfocusesonfranchisesuccessasthedependentvariable;however,

thefactorsdiscussedinthehypotheseswerealsoexaminedinthecontextoftheirabilityto

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predictthepresenceofafranchise(presencemodel)inamarketandtheresulting

regressionmodelprovidedabenchmarktowhichtheregressionbasedonattendance

(attendancemodel)couldbecompared.

Hypothesis1:CommunityAttachment-Apositiverelationshipexistsbetweencommunity

attachmentandMLSfranchisesuccess.

Thefirstfactorconsideredwascommunityattachment.Iproposedthatmetroareas

withahighersenseofcommunityattachmentwouldbemoresuccessfuloverall.This

hypothesisdrawsfromresearchbyUhlman&Trail,whichfoundthatSeattleSoundersfans

citedcityprideandattachmentasamoresignificantfactorintheirloyaltytotheteamthan

theiractualpassionforthegameofsoccer,oreventhespecificteam.Thistheorywas

derivedfrompreviousworkdonebyAndersonandStone(1981),Funketal(2001),and

Mahony,Nakazawa,,Funk,James,&Gladden(2002).

Hypothesis2:TotalSports-Anegativerelationshipexistsbetweenthenumberofother

professionalsportsteamsinamarketandMLSfranchisesuccess.

Next,Iconsideredthepresenceofalternativeentertainmentoptions,which

intuitivelypossessedanegativeimpactonMLSfranchisesuccess.Kim&Trail(2010)found

thistobethecasewhentheyexaminedfactorsthataffectattendanceatawomen'

professionalbasketballgame.ThisheldweightparticularlyforMLSbecausebothMLSand

women'sprofessionalbasketballarerelativelyyoungprofessionalsports,whicharequite

likelytobeeclipsedbylargerleaguesinthesamemarket,specificallyteamsfromthebig

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fourleaguesofNorthAmericansports:theMLB,NBA,NFL,andNHL.Thepresenceof

teamsfromothersportsleagueswasexpectedtodetractfrominterestinanMLSfranchise

because,intheeyesofgeneralsportsfans,MLSisasubstitute,andpotentiallyevenan

inferiorgood.

AdditionalsupportforthishypothesiswasprovidedintheworkofFunketal.,

whichnotedthatsomeoftheappealofattendingmajorsportingeventswasattributedto

thenoveltyofwatchingsportsinperson.Themoreopportunitiestowatchprofessional

sportsinaparticulargeographicmarket,thelessattentionanMLSfranchisereceives.

Thereexistedsomeliteraturewhicharguedthathavingadditionalprofessionalsports

franchisesestablishedacityasa“sportscity.”Proponentsofthislineofthinkingargued

thatsupportingteamsbecomespartofthelocalidentity,leadingittobea“majorleague”

city(Bruggink&Zamparelli1999).Thismayholdmeritforlargerleagues;however,fora

youngleague,likeMLS,itseemedmorelikelythatafranchisewouldbeovershadowedby

otherprofessionalfranchises.

Hypothesis3:NeedforAesthetics-Apositiverelationshipexistsbetweentheneedfor

aestheticsandMLSfranchisesuccess.

AstudyconductedbyFunketal.(2012)indicatedthattherewasapositive

correlationbetweenconsumersneedforaestheticvalueandtheirconsumptionofsports.

Aestheticvalue,accordingtoFunketal."representsperformanceastheinherentdesirefor

aestheticrepresentationandmovement,desireforexcellence,beauty,andcreativityof

athleticperformance,fantasyandsubjectiveexperiencesthatarepleasurable"(359).In

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theirresearchitwasdeterminedthatthehighertheneedforaestheticsanindividualhad,

themorelikelytheyweretoconsumesports.

Hypothesis4:Population-ApositiverelationshipexistsbetweenpopulationsizeandMLS

franchisesuccess.

Anotherimportantfactortoconsideredwasthegeneralpopulationofametroarea.

Byhavingalargerpopulationinthemetroarea,therearemorepotentialattendees,andan

overallhighernumberofpotentialcustomers.Inpreviousprofessionalsportsexpansion

modelssuchastheoneputforwardbyBruggink&Zamparelli,populationsizewasatop

predictorofthepresenceofaprofessionalsportsfranchise.Populationwasalsoatop

predictorofMLSfranchiselocationsaccordingtoBaehr(2006).Althoughtheseprevious

modelsonlysoughttopredictthepresenceofateam,notateam’ssuccess,itwasstill

importanttoevaluatesheerpopulationinthiswork,becauseitwasquitelikelytopredict

MLSfranchiseattendance,andthussuccess.Additionally,populationwasimportantto

includeinapredictivemodelbecause,atsomepoint,itdoeslikelybecomealimitingfactor.

Thatis,insomemarkets,thepopulationissimplytoosmallforanMLSfranchisetobe

economicallyviable.Infact,populationaloneservesasareasonablepredictoroffranchise

presenceasillustratedinFigure3.

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Figure3:PresenceofanMLSfranchisebypopulationforallmetroareasintheUS

PanelA:PopulationDistributionofMSAswithanMLSFranchise

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PanelB:PopulationDistributionofMSAswithoutMLSfranchises

Asthecitiesgetlarger,youbecomemorelikelytofindanMLSfranchiselocatedinthatcity.Note:TheY-axischangesfromPanelAtoPanelBduetothehigheroverallvolumeofMSAswithoutfranchises.Hypothesis5:Knowledge-Apositiverelationshipexistsbetweendesiretoacquire

knowledgeandMLSfranchiseattendance.

Thefinalfactorevaluatedwasthelocalpopulation’sdesiretoacquireknowledge.

Thisvariablehadnotbeenincludedinotherprofessionalsportsfranchiseprediction

models;rather,itwasdrawnfromfanmotivationtheory.JamesandTrailcitedthe

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acquisitionofknowledgeasafactorthatplayedanintegralroleinfanbehavior.Fansoften

viewedsportsasahobbytobestudied,indicatingahigherdesiretoacquireknowledge

abouttheirteam.ThisoftenledtosupportofaspecificteamintheformofTVviewership

and,importantlyforthisstudy,gameattendance.

ii.DataCollection

Duetothescopeandnatureoftheresearchquestion,primarydatacollectionwas

waived.Fortunately,anumberofsecondarydatasourceswerereadilyavailablethat

addressedtheresearchquestion.Anumberofproxieswereidentified,operationalizingthe

constructsdiscussedinthehypothesisdevelopmentsection.First,averagesinglegame

attendancewasidentifiedasthemostsuitableproxyforfranchisesuccessandcollected

fromworldfootball.net3.SmallerleaguessuchastheMLSandWNBAtendtorelymore

heavilyonattendanceasasourceofrevenuewhilelargerleaguesrelyonTVcontracts

(KimandTrail,2010).Asmentionedintheliteraturereview,theuseofsomemeasureof

successasadependentvariabletoevaluatemultiplehypothesessetsthisresearchapart

frompreviousstudies.Themajorityofprevioussportsleagueexpansionmodelsassume

thatexistingfranchiselocationswereoptimalandthusthatfutureexpansionsitesshould

beassimilaraspossibletothoseexistingsites.Byfocusingonattendance,andcomparingit

tothepresenceofateam,thisstudyidentifiedpopulation-relatedfactorsthatassociated

withthesuccessofMLSfranchises,followingtheircreation.

32014tablebuteachyearfrom2005-2014wascollected.http://www.worldfootball.net/attendance/usa-major-league-soccer-2014/

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Proxiesforcommunityattachment,needforaesthetics,anddesireforknowledge

werealsoneeded.Comprehensivecommunityattachmentmeasuresformajor

metropolitanareasacrossAmericawerenotreadilyavailableandwouldnecessitate

extensivedatacollection,whichfelloutsidethescopeofthisproject.However,theUS

Census,themainsourceofdataregardingthefactorsexaminedinthisstudy,incorporates

dataonthenumberofindividualsthatliveinthesamestatewheretheywereborn4.This

measurewasusedasaproxyforcommunityattachment.Itstoodtoreasonthatindividuals

whowereborninaspecificstate,andultimatelydecidedtocontinuelivinginthatsame

geography,likelydevelopedadegreeofattachmenttotheircommunity.

Similartocommunityattachment,collectingprimarydataonthedesirefor

knowledge(asJamesandTraildidfortheirinitialstudy)inallmetroareasacrosstheUS

wouldhaveentailedagreatdealoftimeandeffort,andwasthusdeemedoutofscopefor

thispaper.However,asuitableproxyexistedinformofeducationalattainment5.Thus,

ratherthanemployaspecificmetricofdesiretoacquireknowledge,theanalysisdrew

uponameasureofthepercentageofthepopulationwithatleastabachelor’sdegree.This

datawasavailableonaMetropolitanStatisticalArea(MSA)levelfromtheUSCensus.Using

thisasaproxyforthedesireforknowledgefollowedthelogicthatifanindividualwas

motivatedtocompleteabachelor’sdegree,thentheyhavesomedesiretoacquire

knowledge.Certainlyfactorsotherthanthedesireforknowledgemotivate(andlimit)

42014tableasanexampleforrepeatability.http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_14_5YR_B06001&prodType=table52014tableasanexampleforrepeatability.http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_14_1YR_S1501&prodType=table

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individualstopursuehighereducation,butoverallahigherpercentageofindividualswith

bachelor’sdegreesindicatesahigherpercentageofindividualsseekingoutknowledge.

Entertainmentspendingalsorequiredtheuseofaproxyandthusutilized

householdentertainmentspending.Thiswasasuitable,andevenpotentiallyadvantageous

proxyforanumberofreasons.First,itnotonlyrepresentedaconsumer’sdesiretoenjoy

aesthetics,butalsotheirabilityandwillingnesstopayforthosedesires.Thiscontrasted

previousstudieswhichexaminedtheimpactofhouseholdincomeonthepresenceof

sportsfranchises,anapproachthatfailedtoaccountforhowincomeisspent.Household

entertainmentspendingwascollectedfromtheUSConsumerExpenditureSurvey6.

MLSpointtotalsforeachseasonwerecollectedfromMLS.com7.Dataaboutthe

presenceofother‘bigfour’NorthAmericanprofessionalsportsfranchisesineachmarket

wasdrawnfromWikipedia8.

Withrespecttosampleselection,therewereeffectivelytwotypesofmarketsthat

wereconsidered.ThefirstwasthesampleofmarketsthatcurrentlyhostMLSteams.All

datawascollectedonthesemarkets(MSAs/franchises)fortheperiodbetween2005and

2014;asfarbackascensusdatawasreadilyavailable.Thisperiodsawafairlyconsistent

setofteams,onlyoneteamfoldedandfivewereaddedintheUS.Montreal,Toronto,and

Vancouveralsolaunchedoverthisperiodbutareexcludedfromthedataset.Dataonthose

franchiseslocatedinCanada(MontrealImpact,VancouverWhitecaps,andTorontoFC)

wereexcludedfromthestudybecauseofdatainconsistencyissues(e.g.,theCanadian

6http://www.bls.gov/cex/csxmsa.htm72014tableasanexampleforrepeatability.http://www.mlssoccer.com/standings/mls/2014/8https://en.wikipedia.org/wiki/U.S._cities_with_teams_from_four_major_league_sports

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governmentrecordsdataindifferentformats,etc.).Thesecondsetofmarketsthatneeded

tobeconsideredwereMSAsthatdidnothaveMLSfranchises–i.e.,potentialexpansion

locations.MSAswereexcludedfromtheattendancemodelprojectionsiftheirpopulation

waslessthanonemillionpeople,becausethiswastheapproximatesizeofthesmallest

metroareathatcurrentlyhostsanMLSfranchise;theSaltLakeCitymetroareaand

trainingofthemodeloccurredonadatasetwhereallMSAspossessedrelativelylarge

populationssousingthemodelonadissimilardatasetprovedproblematic.

Beyondthekeyindependentvariablesofinterest,anumberofcontrolvariables

werealsoconsidered.Throughresearchandintuition,itwasdeterminedthatthreefactors

mustbeaccountedforinanyanalysisofgameattendance:teamon-fieldsuccess,franchise

novelty,andleaguegrowth.Thesefactorsonlyapplytotheattendancemodelandnotthe

presencemodelastheydependonthepresenceofateaminaspecificcityandwereheld

constantinthepresencemodel.Inotherwords,ifcontrolvariablesenteredthepresence

model,theywouldholdhighpredictivevaluebutnotactuallyprovidemeaningfulinsights

becauseonlymarketswithateamhadvaluesforthosefactors.

Previousresearch,suchastheworkbyKimetal.andthatbyParrish(2013),

supportsthenotionthatwinningimpactsattendancegreatly.Teamperformancewas

thereforemeasuredasafranchise’spointspergame.Averagepointspergamewasused,

ratherthansheernumberofwins,orthewin-lossratio,ortotalpointsaccumulatedovera

season.ThiswasbecausemanyMLSgamesendinatie.Finalrankingsaredeterminedby

totalpointseachyear,withawinresultinginthreepoints,atieresultinginonepoint,anda

lossresultinginnopoints.Becausethenumberofgamesplayedbyeachfranchisevaried

overtime,withtheintroductionofnewteams,rawpointtotalsprovidedaninconsistent

21

measureofperformance.Incontrast,averagepointspergamewasastable,consistent

measure,overtime.Theliteraturealsorevealedthatthenoveltyofafranchiseimpacted

supportforateam,soafranchiseagevariablewasalsoincluded(Baade,1994).Finally,

dummyvariablesindicatingyearswerealsoincorporatedintheanalysis,tocapturelarger

temporaltrends,suchaschangesintheleague’spopularityoverall.Table1containsa

summaryofeachhypothesisandthedatausedtoevaluateit.

Table1:HypothesesandMeasures

Notes:Thistablegiveseachhypothesisalabel,statesthehypothesisintermsoftheindependentvariables(nottheoriginalfactorsfromtheliterature),statestheexpectedrelationship,andprovidesabriefdescriptionofthesupportingargument.iii.Analysis

Oncethedatawasgathered,statisticalanalysiswasconductedintheformofthree

multiplelinearregressionmodels.Thefirstmodelwasananalysisofhowthecontrol

variablesimpactedattendance.Thecontrolvariablesinthisinstanceincludedpointsper

22

game(on-fieldsuccess),dummyvariablescapturingeachyear,tocontrolfortimeeffects,

aswellasafranchiseagevariable.

Theformulaforthisinitialstatisticalmodelwasasfollows:

𝐴𝑡𝑡𝑒𝑛𝑑𝑎𝑛𝑐𝑒 = 𝛽* +𝛽-𝑃𝑜𝑖𝑛𝑡𝑠𝑃𝑒𝑟𝐺𝑎𝑚𝑒 + 𝛽5𝐹𝑟𝑎𝑛𝑐ℎ𝑖𝑠𝑒𝐴𝑔𝑒 + 𝛽92014𝐷𝑢𝑚𝑚𝑦

+ 𝛽92013𝐷𝑢𝑚𝑚𝑦…+𝛽-52006𝐷𝑢𝑚𝑚𝑦

Aftergainingabetterunderstandingontheimpactthatwinning,novelty,andyearly

changes9had,thefullmodelexpandedonthebaselinemodel,toincludeallindependent

variables.

𝐴𝑡𝑡𝑒𝑛𝑑𝑎𝑛𝑐𝑒 = 𝛽* +𝛽-𝑃𝑜𝑖𝑛𝑡𝑠𝑃𝑒𝑟𝐺𝑎𝑚𝑒 + 𝛽5𝐹𝑟𝑎𝑛𝑐ℎ𝑖𝑠𝑒𝐴𝑔𝑒 + 𝛽92014𝐷𝑢𝑚𝑚𝑦

+ 𝛽D2013𝐷𝑢𝑚𝑚𝑦 +⋯+𝛽-52006𝐷𝑢𝑚𝑚𝑦 +𝛽-9𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛

+ 𝛽-D𝐸𝑛𝑡𝑒𝑟𝑡𝑎𝑖𝑛𝑚𝑒𝑛𝑡𝑆𝑝𝑒𝑛𝑑𝑖𝑛𝑔 − 𝛽-K𝑇𝑜𝑡𝑎𝑙𝑆𝑝𝑜𝑟𝑡𝑠𝐹𝑟𝑎𝑛𝑐ℎ𝑖𝑠𝑒𝑠

+ 𝛽-M𝑅𝑒𝑠𝑖𝑑𝑒𝑛𝑡𝑖𝑛𝑆𝑡𝑎𝑡𝑒𝑜𝑓𝐵𝑖𝑟𝑡ℎ +𝛽-Q𝐸𝑑𝑢𝑐𝑎𝑡𝑖𝑜𝑛

Eachofthebetasbeingtestedwasevaluatedbasedonp-valuesandwasheldtoa

significanceleveloffivepercent.Thesignofeachindependentvariablewasalsoadjusted

toalignwiththeanticipatedrelationshipbasedonthestatedhypotheses(i.e.anexpected

negativerelationshipgeneratesanegativecoefficient).Theonlyvariablethisimpactedwas

β14whichpertainedtothepresenceofotherprofessionalsportsteamswhichwas

hypothesizedtohaveanegativerelationshipwithattendance.Oncethefullattendance

modelwasevaluated,itprovidedcoefficientsthatwereusedtodeterminewhichpotential

expansionsiteswouldbebestforMLSfranchises.Boththisandthecontrolmodelwere

trainedonthesamplecontainingexistingMLSfranchises.

9Theimpactoffranchiseagesquaredwasalsoconsideredbutultimatelyremovedastherelationshipbetweensuccessandageappearedtobelinear.

23

Finally,IgeneratedathirdmodelbasedonthepresenceofanMLSfranchise.This

thirdmodelreliedonthecompletesetofMSAsforatrainingdatasetandtheresulting

modelpredictedthelikelihoodofeachMSAhavinganMLSfranchise(presenceofa

franchise).Thepresencemodelremovedthecontrolvariablesfromtheattendancemodel

becausetheydidnotimpactthelikelihoodofafranchiseexisting,butratherthesuccessof

thatfranchise.Also,allpredictionsforthepresencemodelutilized2014dataleadingtothe

removaloftheyeardummyvariables.Thisresultedinthefollowingmodel:

𝑃𝑟𝑒𝑠𝑒𝑛𝑐𝑒 = 𝛽* + 𝛽-𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 + 𝛽-𝐸𝑛𝑡𝑒𝑟𝑡𝑎𝑖𝑛𝑚𝑒𝑛𝑡𝑆𝑝𝑒𝑛𝑑𝑖𝑛𝑔

− 𝛽5𝑇𝑜𝑡𝑎𝑙𝑆𝑝𝑜𝑟𝑡𝑠𝐹𝑟𝑎𝑛𝑐ℎ𝑖𝑠𝑒𝑠 + 𝛽9𝑅𝑒𝑠𝑖𝑑𝑒𝑛𝑡𝑖𝑛𝑆𝑡𝑎𝑡𝑒𝑜𝑓𝐵𝑖𝑟𝑡ℎ

+𝛽D𝐸𝑑𝑢𝑐𝑎𝑡𝑖𝑜𝑛

Thispresencemodeloriginallygeneratedcuriousresults,withmanysmallercities

receivinghigherscoresthanMSAsthatintuitivelyseemedtobetterfittheexpectationsfor

anMLSexpansionlocation.Uponfurtherinspection,thepresencemodelgenerateda

negativecoefficientforpopulation(Table2)asaresultofthecovariancebetween

populationandtotalsports(Table3).

Table2:OriginalPresenceModelRegressionResults

24

Note:Populationhadanegativecoefficientintheoriginalmodelresultinginmanylarger

citieslackingotherprofessionalsportsbeingconsideredpoorlocationsforMLSfranchises.

Table3:CorrelationofOriginalPresenceModel

Theattendancemodelalsoexhibitedthisbehaviorbutduetoitonlyconsidering

MSAswithpopulationsoveronemilliontheimpactwaslesspronounced.Asaresult,total

sportswasultimatelyremovedfromthepresencemodelleavingthemodelbelowasthe

completepresencemodel.

𝑃𝑟𝑒𝑠𝑒𝑛𝑐𝑒 = 𝛽* + 𝛽-𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 + 𝛽-𝐸𝑛𝑡𝑒𝑟𝑡𝑎𝑖𝑛𝑚𝑒𝑛𝑡𝑆𝑝𝑒𝑛𝑑𝑖𝑛𝑔

+ 𝛽9𝑅𝑒𝑠𝑖𝑑𝑒𝑛𝑡𝑖𝑛𝑆𝑡𝑎𝑡𝑒𝑜𝑓𝐵𝑖𝑟𝑡ℎ +𝛽D𝐸𝑑𝑢𝑐𝑎𝑡𝑖𝑜𝑛

iv.Assumptions

Theresultsoftheattendancemodelandthecontrolmodelwerecomparedto

evaluatewhichmetroareasprovidethemostopportunityforMLSexpansion.Inorderto

dothis,thetheoreticalnewfranchisesinthemodelswereassumedtohave1.39pointsper

game(theMLSaveragein2014),andwereassumedtobeanewfranchisethatyear,

meaningtheirfranchiseagewas0.

IV.Results

25

Oncealldatacollectionwascompleted,itwasanalyzedusingtheRprograming

language.Specifically,thethreemultiplelinearregressionsdescribedinthemethodology

sectionwerecreatedtoaddresswhatfactorswereimportantindeterminingtheviabilityof

anMLSmarketasmeasuredbyattendanceandbypresence.Thecoefficientsfromthefull

(controlvariablesandindependentvariables)attendanceregressionmodelwerethenused

toproject2014attendanceforpotentialMLSexpansionlocations,andtheindependent

variablesfromthepresencemodelwereusedlikewise.Thissectiondetailstheresultsof

thoseanalyses.

i.EvaluationofHypotheses

Table4:SummaryofHypothesisTests

Table4showstheresultsofamultiplelinearregressionranonallcontrolvariablesandallindependentvariables.“***”indicatesasignificance<.001,“**”<.01,“*”<.05,and““>.05. Thefivehypothesesposedbythisstudywereevaluatedbycreatingamultivariable

linearregressionmodelwithattendanceasthedependentvariable.Findingsindicatedthat

apositiverelationshipexistedbetweenpopulationsizeandMLSfranchisesuccess.Results

alsoindicatedastatisticallysignificantrelationshipbetweenattendanceandpopulation.

Foreachadditionalonemillionpeopleinametroarea,ateamsawapproximatelyan850

personincreaseinpergameattendance.However,forlargercities,countertothisimpact,a

26

negativerelationshipexistedbetweenthenumberofotherprofessionalsportsteamsina

marketandMLSfranchisesuccess.Essentially,althoughlargerpopulationstendtoleadto

moresupport,theyalsotendtoattractmorecompetitionintheformofothersports

franchises,eachofwhichreducedprojectedattendancebyapproximately1,300pergame.

Theresultsfurtherindicatedthatapositiverelationshipexistedbetweenspending

onentertainmentandMLSfranchisesuccess.Metroareasthatspentmoreon

entertainmentsawattendanceriseapproximately4peoplepereveryadditionaldollar

spentonentertainmentonaverage.Supportalsoindicatedapositiverelationshipbetween

educatedshareofthepopulationandMLSfranchisesuccess.MSAswhereagreater

percentageofindividualscompletedaleastabachelor’sdegreestendedtobettersupport

MLSfranchises.

Countertoexpectations,testingrevealedanegativerelationshipexistsbetween

communityattachmentandMLSfranchisesuccess.Essentiallytheresultsindicatedthat

thehigherpercentageofpeoplelivingintheirplaceofbirth,thelesstheysupportedan

MLSfranchise.

Asapointofcomparison,eachhypothesisincludedinthepresencemodel

(population,needforaesthetics,desiretoacquireknowledge,andcommunityattachment)

resultedinacoefficientwiththesamesign,signifyingacomparablerelationshipwith

presence.However,forthepresencemodelonlypopulationanddesireforknowledge(as

educationalattainment)resultedinstatisticallysignificantfindings(AppendixA).

Comparingtheresultsofthecontrolmodel,theattendancemodel,andthepresencemodel

yieldedTable5belowwhichcomparestheresultingbetavalues(coefficients)and

significancesofeachfactorconsideredineachmodel.Table8alsoprovidestheR2value

27

thatresultedforeachmodelwiththeattendancemodelholdingthehighestvaluefollowed

bythepresencemodelandlastlythecontrolmodel.

Table5:Comparisontableofresultsofthecontrol,attendance,andpresencemodels

Notes:.“***”indicatesasignificance<.001,“**”<.01,“*”<.05,and““>.05.

ii.Controlmodelresults

Thetablebelow(Table5)outlinesthegenericresultsofthecontrolmodelwhich

includeddummyvariablesforeachyearinthedataset,theageofthefranchiseinthatyear,

andthepointspergameassociatedwiththefranchiseforthatyear.Forthefullresults,see

AppendixB.

ThecontrolmodelhadanR2valueof.3711,indicatingthatitexplained

approximately37%ofthevarianceinattendance.Thisprovidedabaselinetowhichthefull

attendancemodeliscompared.

28

Table6:SummaryofControlModelResults

Notes:Table2showsthatpointspergame(on-fieldsuccess),franchiseage(novelty),andsomeyears,didhaveasignificantimpactonattendance.“***”indicatesasignificance<.001,“**”<.01,“*”<.05,and““>.05.

Thecontrolmodelalsoshowedthatseveralofthecontrolvariablesweresignificant,

includingpointspergameandfranchiseage.ItalsoshowedthatMLShasseenyearover

yeargrowthwitheachyearhavingapositiverelationshipwithattendancetovarying

degreesofsignificance.Theseresultssupportedpreviousresearchwhichindicatedthat

noveltyandfranchiseon-fieldsuccesshaveanimpactonsportsconsumptionandfan

motivation.Thismodelalsogeneratedpredictedattendancevaluesfor2014forexisting

MLSlocations(Table6)wherewerecomparedtoactualattendancenumbersasacheckof

theaccuracyofthemodel.

29

Table7:ControlModelPredictedAttendancevsActualAttendancefor2014

iii.Fullmodelresults

Thefullregressionmodelbuiltoffthecontrol.Thefullattendancemodeloverallhad

anR2valueof.527,indicatingthatitexplainedanadditional15%ofvariationinattendance

comparedtothecontrolmodel.Forthefullresults,includingexactcoefficientsand

significancevalues,aswellastheresultsofthecontrolvariablesinthefullmodelsee

AppendixC.Asacheckofaccuracy,theresultingmodelgeneratedpredictedattendance

valuesforthe2014seasonwhichwerecomparedtotheactualattendancefor2014as

showninTable7.

30

Table8:FullModelPredictedAttendanceVsActualAttendancefor2014

iv.Projected2014attendanceandpresenceforpotentialexpansionlocations

Oncecoefficientvariablesweredeterminedthroughthefulllinearregressionmodel,

thosecoefficientswereusedtoestimateattendancevaluesforpotentialexpansion

locationsforMLSfranchises.Aspreviouslymentioned,potentialMLSexpansionlocations

werelimitedtoUSmetropolitanstatisticalareaswithpopulationsoveronemillionpeople.

TheresultsareshowninAppendixDandtheprojectedattendancevaluesinthetable

representtheexpectedattendanceforanexpansionfranchise,soformetroareasthat

alreadyhaveMLSfranchises,thisrepresentsasecondfranchise.Asapointofreference,the

averageMLSattendancefor2014was19,148.Utilizingthecoefficientsgeneratedbythe

presencemodel,predictedpresencevalueswerealsogeneratedforallMSAsintheUS,

theseresultsareshowninAppendixE.Tocomparetheresultsofthemodels,Figure4

showsascatterplotoftheprojectedpresencemodelresultsagainsttheprojected

attendancemodelresults.Theseresultsarelimitedtopopulationsoveronemillionbutthe

fullresultscanbeseeninAppendixF.

31

Figure4:ProjectedPresencevsProjectedAttendanceforMSAswithPopulations

overonemillion

Figure4illustratesthedifferencebetweenthetwomodels.Notably,thetopten

resultsfromtheattendancemodelplaceabovelocationswithfranchises,andalltenof

theseMSAsscoredbelowa.5inthepresencemodel,butstillrankamongthetoplocations

basedonthatmodelaswell.

32

V.Discussion

Thissectionwilldiscussinterestinginsights,newquestionsforresearch,and

opportunitiesforimprovinguponthisstudy.

i.AttendanceModel

ConsideringthecomparisontotheactualattendancedatashowninTable7,the

attendancemodelprovidesafairlyreliablepredictivetool.Seattlecreatedthelargest

discrepancybetweenpredictedandactualasexpectedduetoitsstatusasanoutlier

comparedtotypicalMLSattendance.Thatsaid,eachofthemodelscreatedpossessed

strengthsandweaknesses.Asintended,theattendancemodelprovidedaninsightintothe

potentialsuccessofanewfranchise,notjusttheabilitytosaywhereateamshouldor

shouldnotexist.Thecorrelationbetweenpopulationandtotalsportsmaydistortthe

modelsome(Table8),butthisdidnothaveaslargeofanimpactontheattendancemodel

asonthepresencemodelandIfeltthatdespitethecovariance,bothwereimportant

factorstoevaluate.

Table9:Fullmodelindependentvariablecorrelationtable

Note:Totalsportsandpopulationwerehighlycorrelatedbutultimatelywerebothincludedinthefullattendancemodel.

33

Also,duetobeingtrainedonadatasetmadeupofonlylargecities(thosewithMLS

franchisesalready),theattendancemodelgeneratedrelativelyasmallcoefficientfor

population.Thistendedtobiasthemodeltobemoreforgivingtowardssmallercitiesin

comparisontothepresencemodelandbecauseofthis,hadInotfilteredoutpopulations

smallerthanonemillion,Boulder,ColoradowouldhavebeenthetoplocationforMLS

expansionprojectingnearly37,000inaverageattendancedespitetheMSAonlyhavinga

populationofapproximately350,000.

Further,themajorityofprojectedexpansionlocationshavehigherprojected

attendancesthancurrentMLSteam.Thisresultedpartiallyduetoeachofthesefranchises

beingnewandnotfeelingthenegativeimpactoffranchiseage,butalsoindicatesthatthe

modellikelytendedtooverestimateattendances.Thenegativeimpactofagemayhave

resultedfromtheimpactofnoveltybutitalsomayhaveresultedearlyMLSfranchise

locationsnotbeingwiselyselectedormanaged.In2014fourofthefiveleastattended

franchiseswerefoundingmembersoftheleague.Thefifthofthosefranchises,Chicago,is

alsoamongtheolderteamsintheleague,joiningtwoyearsaftertheleague’sfounding.This

hasseriousimplicationsforMLSandforstrugglingfranchisesasitprovidedevidence

suggestingsomefranchisesshouldeitherberelocatedorfoldedinfavorofbetterlocations,

oratleastnewerfranchisesshouldMLScontinuetostrugglefinancially.Thisraisesthe

questionofdidfranchiseageanddecreasingnoveltyreallydrivedownMLSattendance,as

suggestedbythemodel,orweretheoriginalfranchisesjustpoorlychosen?

ii.PresenceModel

34

Thepresencemodelinthisstudyservedasabenchmarktowhichtheattendance

modelcouldbecompared.Countertotheattendancemodel’sbiastowardssmallcities,the

presencemodelreflectsbiastowardsgenerallylargercitiesbecauseitwasestimatedona

datasetcontainingallMSAswherepopulationvariedmoredramatically.Thismodel

appearedtomorecloselyreflecttheapproachMLShastaken,witheightofthetopten

predictedmarketsalreadyhostingfranchisesandwithMiamiandAtlantaabouttomakeit

tenoutoften.

iii.Controlvariablesplayabigpartinattendance

Oneinsightgainedfromtheresultsshowedthatthecontrolvariablesexamined

explainedafairamountofthevariationinattendanceinMLS.Thisisinterestingbecauseit

meansthatwithallreasonablemarkets(heredefinedasmetroareaswithpopulationsover

onemillion)thereisacertainbaselineattendanceyouwouldexpecttosee.Italsomeans

thatafairamountofthefranchise’ssuccesscomesdowntoeffectivemanagementwhich

wasmostclearlyrepresentedbythelargeimpactthatwinninghadonMLSattendance.

ReferringbacktoTable8,KansasCityembodiedthisfact.ForyearsSportingKansasCity

(previouslytheKansasCityWizards)struggledtoattractfansbutinrecentyearsthe

team’ssuccess(includingachampionshipin2013)pullsinfansleadingtooneofthetop

attendancemarksinMLS.ThePhiladelphiaUnionshowedtheoppositeimpactastheir

marketseemedpoisedforsuccessbutyearsofapooronfieldperformancehaslikely

drivendownattendance.Understandingtheimpactofmultipleyearsofon-fieldsuccessor

failureprovidesanavenueforfuturestudiestoexplore.Althoughotherfactorsplayedan

35

importantroleinpredictingattendance,thesefindingsalsolendsomecredittothefamous

quotefromAlDavis,formerOaklandRaidersownerandGeneralManager;“Justwin,baby!”

iv.ModelsagreeMLSisnowmakingsolidexpansiondecisions

Despitehavingnoformallyexpressed,researchbasedmethodforevaluatingMLS

expansionlocations,theleagueseemstohaveagoodunderstandingofwhatmakesa

marketattractive.MLSfranchiseshavebeenannouncedforAtlanta,Minneapolis-St.Paul,

andMiamiwhichrepresentedthreeofthetopfiveprojectedcitiesforMLSattendance,and

threeofthetopeightcitiesforpredictedpresenceinMSAswithoutfranchises.

Additionally,theseresultsalsoprovideAtlantaFC,MinnesotaUnited,andthefuture

Miamifranchisearoughestimateofhowmanyfanstoexpectintheirfirstyearandcould

beusedtodetermineidealcapacitiesforstadiums.InMinnesotaUnited’scase,they

recentlyannouncedplansfora20,000seatstadiumbutthemodelsuggeststheycouldfilla

stadiumsignificantlylarger,althoughprojectedattendancefromthismodelappears

somewhatinflated.

v.Modelcouldbeexpandedtoincludemorevariablesforhigheraccuracy

Withboththecontrolandindependentvariables,therecertainlyexistedmore

variablesthatcouldbemeasuredandincludedinthemodelandthiswouldhavedrivenup

theR2value(perhapsjustartificiallybasedonthemechanicsofhowlinearregression

works)toexplainmoreofthevarianceinattendance.Thislistofvariableswasdeliberately

ashorterlistwithanemphasisonvariableswithsupportinexistingliteraturetoavoid

artificiallyinflatingtheR2value,butthelistofvariablesonecouldexploreinbuilding

36

similarmodelsisalmostunlimited.Anotherreasonthislistofvariableswasusedisthat

therewaslittlecorrelationbetweenvariablesotherthanpopulationandnumberof

professionalsportsteamsinthatmetroarea.Otherfactorsthatwereinitiallyincludedbut

eventuallyremovedfromconsiderationduetolackofsupportinliteratureorhigh

correlationincludedaverageage,ethnicmakeup,stadiumage,andhouseholdincometo

nameafew.

vi.Residencyinstateofbirthapoorproxyforcommunityattachment

Basedontheresults,oneareathatshouldberevisitedinfutureworkishowto

evaluatecommunityattachmentbecauseresidencyinstateofbirthseemedtodoapoorjob

ofmeasuringthatsentiment.Communityattachmentwasafactorthatcamethroughthe

literatureasbeingoneofthemoststronglyinfluentialfactorsindeterminingMLSfan

motivation,sotoseeitnegativelycorrelatedwithMLSattendanceintheresultsseemed

unlikely.Itispossiblethattheunderlyingassumptionwasincorrectandinfactindividuals

whochoosetoliveinastatedifferentfromwheretheywerebornhaveagreatersenseof

attachmentbecausetheychosethatcommunitydespitehavingrootsinanotherlocation.

Whateverthecausemaybe,theresultseemedtobenotthatcommunityattachment

negativelyimpactsMLSattendance,butratherthatcommunityattachmentwasnot

accuratelymeasured.

VI.Conclusion

37

Thissectionservestoreinforcethemaintakeawaysoftheresearch,illustratethe

limitations,synthesizethenewknowledgewhilecontinuingopeningupnewareasfor

exploration.

i.Summaryofkeytakeaways

Theresearchandresultsusedinthispaperhaveseveralstrengthsworthnoting

withimportantimplicationsgoingforward.First,thisstudyusedpubliclyavailabledata

andexistingresearchresearchbutapplieditinanewwaytohelpexpandtheliterature

aroundsportsexpansionmodelingand,inabroadersense,thewaybusinessesthingabout

enteringanewmarket.

Additionally,thestudyprovidedaframeworkthatitcouldbeappliedtoother

professionalsportsleagues,andotherbusinesses,lookingforwaystodetermineideal

expansionlocations.Itwouldbeparticularlyusefultosmaller,youngerprofessional

leagues,orfranchises,thatmaybeviewedasinferiorintheeyesofthegeneralpublicwhen

comparedtomoreestablished,traditionalbrandsliketheNFL,MLB,NHL,andNBAin

soccer’scase.Additionally,thevalidityandaccuracyofthisstudywouldbeeasytotestas

allinformationusedwaspublicallyavailableandrequiresnoprimarydatacollection.That

said,thequalityofthestudywouldbegreatlyenhancedwithwidescaleprimarydata

collection.Additionally,thehypothesesproposedarerelativelygeneralizableandrequire

littleifanyexpertiseinthefieldofsportswhichmeansmoreindividualswillbeableto

utilizethisresearchintheirownwork,evenifitisinanotherfield.

Also,theuseofmultiplelinearregressionallowedfortheanalysisofmultiple

variablesatonce,whileprovidinginformationabouthowthosevariablesworktogetheras

38

well.Examiningsimplyonevariableinasimplelinearregression,orevenutilizingmultiple

simplelinearregressionswouldbeanoverlynarrowapproachandwouldbelessefficient

atminimizingthenoiseinthedata.Byputtingallofthevariablesintoonemodel,it

informedthemodelabouthowthosevariablesworkedtogethertobuildamorecomplete

pictureofhowtomodelattendanceforMLS.

Further,itisimportanttokeepinmindthatalthoughthisresearchprovideda

frameworkforfutureresearch,eachexpansionquestionwillhaveitsownnuancesandits

ownimportantvariables.WhatistrueforMLSmaynotbetrueforselectingMcDonalds

expansionlocations,andmaynotevenbetrueforselectingothersportsexpansion

locations.Duetothis,itremainsimportanttoalwaysstartwiththeliteraturetounderstand

whatmaybemostsignificantindeterminingthesuccessofexpansionlocationsinaspecific

industry,thenusetheavailabledatatodeterminethedegreeandsignificanceoftheeffect.

ii.Studylimitations

Themethodologythatwasusedinthisstudyalsohadmanylimitations.First,

proxieshadtobeusedtoevaluatesomeofthevariablesbeingstudiedduetolimitationsin

thedataavailable.Specifically,theproxyusedforcommunityattachmenthaslittlegrounds

intheliterature,butcommunityattachmentwasanewideaworthtestingandthiswasthe

mostviableoptionwiththedataavailable.Therewerealsosomelimitationstothe

entertainmentspendingdata.TheConsumerExpendituresurveydidnotcollectdataonall

metroareasbutratheronaselectfewfromeachoftheirfourpredefinedregions.These

metroareasprovidedvariedslightlyyeartoyearbutforexample,the2014metroareas

wereChicago,Detroit,Minneapolis-St.Paul,Cleveland,NewYork,Philadelphia,Boston,

39

WashingtonD.C.,Baltimore,Atlanta,Miami,Dallas–FortWorth,Houston,LosAngeles,San

Francisco,SanDiego,Seattle,andPhoenix.Forcitiesnotlistedspecifically,theirregional

averagewasused.Asisevidentbythelistprovided,mostMLSmetroareaswereprovided,

butthisdatasetwasalargerlimitationonprojectingexpansioncitiesandlikelygenerated

regionalbiasesbasedontheneedtouseregionalaverages.

Additionally,thestudyonlyaccountedforMLSfranchisesbasedinAmerica.Thisisa

limitationbothontheoriginalmodel’saccuracyandontheabilitytoselectthebest

possiblecitiesforexpansion.Theoriginalmodelwaslimitedbynotbeingabletoinclude

severalyearsofdataforTorontoFC,VancouverWhitecaps,andMontrealImpact.

Additionally,metroareassuchasEdmonton,whichhasstrongsupportforalowerdivision

soccerfranchise(EdmontonFC),wereleftoutduetothedatainconsistenciesCanadian

teamswouldintroduce.

Further,thelackoftransparencyinMLS,andprofessionalsportsoverall,with

regardstofinancialreporting,providedalimitingfactor.Attendancewasusedasa

dependentvariabletomeasurethesuccessofafranchisehoweverattendancedoesnot

necessarilymeanprofitabilityforateam.FactorssuchasTVdeals,merchandise,ticket

prices,andothersallcontributetotheoverallprofitabilityandsustainabilityofafranchise.

Formostlargerprofessionalsportsleagues,Forbesalsoprovidesyearlyvaluationsalong

withrevenueandprofitabilityreports,howeverthesewereonlyavailableforthreeyears

forMLSatthetimeofthisstudy,whichprovidedlimitationsofitsown.Instead,raw

attendancedatawasusedandforsmallersportsleaguesliketheMLS,thisrepresentsa

morereasonableapproachtotakebecausethemajorityoftheirrevenuedoescomefrom

attendance(Kim&Trail,2010).Thatsaid,MLSnowoperatesunderanewTVdealthrough

40

theircollectivebargainingagreementthatwilldramaticallyincreasethepercentageof

revenuecomingfromTV,thusthisapproachmayneedtobealteredinfuturestudies,but

didnotimpactthisstudyasittookeffectbeginninginthe2015season.

Finally,thisstudyattemptedtoaddressthelimitationsofpreviousworkthathad

studiedthepresenceofafranchisebyusingsomemeasureofsuccess.Bymakingthis

decision,itintroducedanewlimitationintothestudy.Becauseattendancebecamethe

dependentvariable,thesamplestudiedfortheattendancemodelconsistedofonly

locationsthathadMLSfranchises.Itispossibletheselocationshadsomethingaboutthem

thatmadethemsystematicallybetterlocationsandthatfactormaynothavebeencaptured

bytheattendancemodel.ThisatleastpartiallymanifestsitselfintheneedtofilterMSAs

withlowpopulationsbecausethemodelwastrainedondatacontainingonlyhigh

populations(thuslimitingthevarianceofthatfactor).Inandefforttoaddressthis,athird

modelwascreatedthatutilizedthesamevariablesasthepresencemodel(egnocontrol

variablesandremovingtotalsports),butusedattendanceasthedependentvariable,and

wastrainedonthecompletesetofMSAs.DuetothehighnumberofMSAshavingno

attendanceatall,thepredictedattendancevaluesasawholewerequitelowhoweverthis

providedanadditionalrankingsystemforevaluatingthequalityofexpansionlocations.

InterestinglyenoughthismodelalsogeneratedMiami,Atlanta,SanFrancisco,andPhoenix

asthemostappealingexpansionlocations,withMinneapolisratinghighlyaswell(Table9).

Thisonlyfurtherstrengthenedtheclaimothermodelsmadethatalsoprojecttheseastop

locations.

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Table10:AttendanceModelTrainedonAllMSAs

Note:MSAsthatdonotcurrentlyhaveMLSfranchisesareboldedaspotentialexpansionlocations.iii.Closingthoughts

Althoughthestudydidhaveanumberoflimitations,thisstudyalsocontributedto

theexistingliteratureinameaningfulway.Someresearchhadbeendoneintoevaluating

42

expansionlocationsforprofessionalsportsleagues,butincomparisontoothersports

managementresearchquestions,theresearchbasewasrelativelythin.Bytakinganother

lookatthisquestionwithnewdata,newresearchvariables,andaslightlyaltered

approach,thisresearchcontinuedtopushforwardtheunderstandingofwhatmakessome

citiessupportprofessionalsports,andothersignorethem.Thisresearchalsovalidated

recentdecisionsmadebyMajorLeagueSoccerwhileleadingtoquestionsaboutolder

expansionlocations.Italsoopenedthefloorexaminewhatothervariablesnotincludedin

thismodelmightimpactMLSattendance.Finally,thisresearchcanservesoccerfans

locatedinmarketswithoutMLSteamsassomethingtheycanpointtoastheytryto

persuadepotentialteamowners,andtheleagueitself,tobringthebeautifulgametotheir

city.

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AppendixA:PresenceModelResults

44

AppendixB:ControlModelResults

45

AppendixC:FullModelResults

46

AppendixD:ProjectedAttendanceForTopCandidateMSAs

Note:MSAsthatdonotcurrentlyhaveMLSfranchisesareboldedaspotentialexpansionlocations.

47

AppendixE:ProjectedPresenceValuesfortopMSAsin2014

Note:MSAsthatdonotcurrentlyhaveMLSfranchisesareboldedaspotentialexpansionlocations.SaltLakeCity,homeofRealSaltLake(acurrentMLSfranchise)isnotshowninthistablebecauseitrankedsolow.Itspredictedpresencevaluewasapproximately.07.

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AppendixF:ProjectedPresencevsProjectedAttendanceforallMSAs

49

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