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NBA Fans Give the League a Predictable Present on Christmas

The following is a guest post by David Berri, a Professor of Economics at Southern Utah University. He is also the lead author of Stumbling On Wins: Two Economists Expose the Pitfalls on the Road to Victory in Professional Sports, the general manager of the sports-economics blog Wages of Wins, and is a frequent contributor to the Freakonomics blog.

Before labor peace came to the NBA, it was not uncommon to hear stories that the lockout was going to negatively impact fan interest in the game (here is one example in this genre). The story basically went as follows:

This story actually gets repeated every time a labor dispute takes away games in North American sports. And the story certainly seems plausible.

Miami Heat vs. Orlando Magic on Dec 21, 2011. (Photo: RMTip21)

A few years ago, though, Martin Schmidt and I investigated the impact disputes have upon fan attendance; and much to our surprise (yes, we tended to believe the stories sports writers had told us for years) we failed to find an effect.  Attendance in the major North American sports is not statistically impacted by labor disputes.

As noted, Marty and I studied league attendance. But I suspected that we would see the same thing with respect to television ratings.  In fact, I was so confident that NBA fans were not going to hold a grudge this year, I predicted — in a moment of speaking off the top of my head to Ron Dicker of Huffington Sports — that Christmas day television ratings in 2011 would surpass what we saw on Christmas in 2010.

After I made this prediction I learned that the NBA set a record with its television ratings from Christmas of 2010.  And that led me to believe that like many economists, I had just made a prediction that was not going to come true.

And then the games were played.  Here is how USA Today’s Michael Heistand led his story on television ratings from the five NBA games played on Christmas:

That the NBA’s Christmas Day TV ratings were up nearly across-the-board shows pro leagues’ labor disputes don’t necessarily hurt fan interest.

Kurt Helin at NBC Sports added the following:

Four of the five Christmas day games drew better ratings than their counterparts last Christmas, and the one that didn’t still drew monster numbers.

So I wasn’t completely correct.  The game between the Chicago Bulls and the Los Angeles Lakers had a rating that was 6% below the Miami Heat-Los Angeles Laker game in the same time slot last Christmas.  But the Bulls-Lakers game was still the 3rd highest rated regular season broadcast in the history of the NBA on ABC.

Such ratings suggest once again that fans do not hold a grudge.  Nevertheless, the next time a labor dispute happens (and we will see another one) I predict (here I go again) that we are going to see the same stories.  Fans will once again swear that they are through with whatever sport has departed, and sports writers will argue that this labor dispute threatens the future of whatever sport is suffering from labor disputes.

And that leads one to wonder, why do we see such behavior from fans and sports writers?

For the fans the story seems fairly simple: sports must make fans happy (i.e. or as economists say, increase the fan’s utility).  We know this because fans are willing to expend money and time on sporting events.  When the games are taken away, fans have no recourse but to threaten the future earnings of players and owners. Unfortunately, this is an empty threat since to carry out that threat, fans would have to give up what makes them happy in the future. Because fans cannot do anything else but make these empty threats, these get repeated during every labor dispute.

For sports writers the story is similar, but there is an added twist.  Sport writers spend their lives writing about sports (obviously).  In other words, they spend their entire lives avoiding what many people think of as “real life”.  When these disputes happen, though, suddenly these writers have to talk about “real life” (i.e. labor issues).  So not only are these writers sad to see the games go away, the joy of watching games is replaced with the job of covering something these writers have spent a lifetime avoiding.  All in all, this must make sports writers very sad and angry.  And that leads to stories that claim these disputes are threatening the future of the world as we know it.

Fortunately, these threats from fans and sports writers are never realized after labor peace is achieved.  So maybe we shouldn’t be surprised that the television ratings were so high on Christmas day. Then again, an economist predicted this outcome, so maybe we should be surprised.