At the stadium or at home: the effect of broadcasting matches

Abstract

Purpose The purpose of this paper is to analyse simultaneously the effect of attendance at the stadium on the size of the TV audience, taking into account the effect of price and uncertainty of outcome hypothesis on both the TV audience and stadium attendance. The paper assumes that a home-team effect exists and influences potential spectators’ decision to go to the stadium or to stay at home. Design/methodology/approach The data set consists of all 228 matches broadcast live and on open air from the Brazilian League across the seasons 2013–2015. The econometric approach of the present paper is based on three simultaneous equations through the Three-Stage Least Square estimator. This method is chosen in order to avoid endogeneity between ticket prices and live attendance and, consequently, with the television audience, too. Findings This work finds a correlation between TV audience and attendance at the stadium. However, it has been demonstrated that those matches that are more expensive have a larger TV audience. Scheduling and UO appear to be relevant for TVs and clubs. Scheduling is relevant, as weekend matches have a smaller TV audience but higher attendance at the stadium. Practical implications The findings indicate that Brazilian football clubs should find optimal prices for matches in order to maximise both TV audience and attendance. Originality/value Analysing simultaneously the effect of attendance at the stadium on the size of the TV audience, taking into account the effect of price on all three of these variables, is new. Another novel aspect is the use of data on audience size to observe a possible substitution effect. The authors also distinguish between home and away matches, assuming that a home-team effect exists and influences potential spectators’ decision to go to the stadium or to stay at home.