PUB - Publikationen an der Universität Bielefeld

Research Question If a sports competition is broadcasted live, consumers may opt for substituting gate attendance with watching that game live on TV (or online). This might be worrisome for teams, particularly those in lower divisions, whose game day revenues typically exceed broadcasting revenues. So far, however, the literature testing this claim empirically is inconclusive. We examine whether (at least parts of) this confusion might be traced back to shortcomings in the econometric modelling process. Research Methods We use attendance data for 1,138 games in German third division football from the 2015/16 to 2017/18 seasons and compare results for our demand equations between ordinary least squares (OLS) and endogenous treatment regressions (ETR). ETRs explicitly account for any selection bias, that is, the broadcasters' preference to select the most attractive games for live broadcasting (which are expected to also attract comparably larger gate attendances). Results and Findings While OLS models reveal a significant positive impact of live broadcasts on gate attendance, this effect reverses when estimating ETRs. Even though there is suggestive evidence for postponing ticket demand to some extent to later games, the overall negative effect remains robust and large. Implications Our findings highlight the relevance of controlling for the selection bias when analysing the impact of live broadcasting on stadium attendance. From a managerial point of view, our findings suggest that increasing the number of games broadcasted live in German third division football might not be advisable, since additional broadcasting revenues may not exceed predicted losses in ticket revenues.