Does competitive balance explain stadium attendance? Evidence from Finnish men’s football

This is a self-archived version of an original article. This version may differ from the original in pagination and typographic details. Author(s): Title: Year: Version: Copyright: Rights: Rights url: Please cite the original version: CC BY 4.0 https://creativecommons.org/licenses/by/4.0/ Does competitive balance explain stadium attendance? Evidence from Finnish men’s football © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. Published version Mangeloja, Esa; Szeróvay, Mihaly Mangeloja, E., & Szeróvay, M. (2024). Does competitive balance explain stadium attendance? Evidence from Finnish men’s football. Soccer and Society, Early online. https://doi.org/10.1080/14660970.2024.2305139 2024 Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=fsas20 Soccer & Society ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/fsas20 Does competitive balance explain stadium attendance? Evidence from Finnish men’s football Esa Mangeloja & Mihaly Szeróvay To cite this article: Esa Mangeloja & Mihaly Szeróvay (24 Jan 2024): Does competitive balance explain stadium attendance? Evidence from Finnish men’s football, Soccer & Society, DOI: 10.1080/14660970.2024.2305139 To link to this article: https://doi.org/10.1080/14660970.2024.2305139 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. Published online: 24 Jan 2024. Submit your article to this journal Article views: 218 View related articles View Crossmark data Does competitive balance explain stadium attendance? Evidence from Finnish men’s football Esa Mangeloja a and Mihaly Szeróvay b a School of Business and Economics, University of Jyväskylä, Jyväskylä, Finland; b Faculty of Sport and Health Sciences, University of Jyväskylä, Jyväskylä, Finland ABSTRACT In this article, we examine the Finnish football league attendance characteristics. Sport leagues usually claim that outcome uncertainty is necessary to maintain interest among fans. In this paper, uncertainty of outcome hypothesis is tested applying football data from the highest tier in Finnish men’s football, currently known as Veikkausliiga. The time period covers 1947–2022. Empirical results show that Finnish football attendance is positively related to competitive balance between the rivalling teams. Increased alcohol consumption in the society is not related to football attendance, but we found that the number of games played during the season is positively related to ticket sales. Number of teams in the league seems to be negatively related to attendance. Further studies could investigate the time of the year, the condition of the stadium and the ticket pricing to see whether there is a correlation with on-site attendance. Introduction Studying questions about the behaviour of fans, and more specifically, the factors that influence and predict fan attendance have been popular in sport economics research in various sports, such as in American football, baseball, and football (soccer). 1 Nevertheless, spectator demand studies on Nordic football leagues remain an underdeveloped research area. 2 Fans hope their team to win, but those in charge of competition formats aim to create a setting in which the outcome of matches is difficult to predict. Academic research to date in football is enormous, with over 24,000 articles listed on Google Scholar, nearly 14,000 citations listed on PubMed and nearly 60% more articles than the next most studied sport. 3 The aforementioned papers, however, mainly cover leagues in the so-called Big 5 countries in Europe, that is, the Premier League in England, the Bundesliga in Germany, the La Liga in Spain, the Serie A in Italy and the Ligue 1 in France. There is much less research on smaller, so-called ‘Beyond the Big 5’ football countries, including the Nordic region. 4 This scarcity applies to studies about the economics of football, and more specifically, about the uncertainty of outcome and match attendance as well. Relatedly, increasing the understanding on factors that are associated with attendance is relevant, because in smaller football countries the composition of mainclub revenues – broadcasting, commercial and match-day revenues – may be different to that of Big 5 countries due to, for example, proportionately smaller CONTACT Esa Mangeloja [email protected] School of Business and Economics, University of Jyväskylä, Jyväskylä, FIN-40014, Finland SOCCER & SOCIETY https://doi.org/10.1080/14660970.2024.2305139 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4. 0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent. media revenues. 5 In the Finnish context, football research in economics is limited, with only a handful master’s dissertations about the topic. This paper addresses the aforementioned gaps and explores factors that have influenced stadium attendance in the top division of Finnish men’s football and discusses the broader societal context in which football takes place.The classical research theme in sports economics is the uncertainty of the outcome hypothesis (henceforth, UOH), which is usually labelled as competitive balance and developed by seminal works by Rottenberg 6 and Neale. 7 The theory proposes that successful leagues must be based on relatively even competition. This degree of parity within a league is labelled as competitive balance. Sports leagues usually claim that outcome uncertainty is necessary in order to maintain interest among fans. However, as Mills and Fort note, 8 empirical results on the influence of outcome uncertainty on game attendance are mixed. It is important to note that scholars differentiate between various perspectives of competitive balance: match, seasonal, and the long-term competitive balance, the latter referring to multiple seasons. 9 In the North American Major Leagues, play-off uncertainty has been investigated due to the different league structures as well compared to most European leagues. Gyimesi 10 points out that there is scarce empirical research exploring the link between long-term competitive balance and attendance, and in those existing studies the findings seem to be inconclusive. The most researched field in this subject is the baseball attendance in Major League Baseball (MLB). Attendance behaviour of ice hockey leagues is examined by various researchers. 11 There also exists a wide range of literature on football and basketball. Hart published the first econometric analysis of attendance at English football matches including the uncertainty of outcome measure as one of the explanatory variables. 12 Subsequently, football game attendance has been analysed in several papers, most notably by Forrest and Simmons. 13 Our research contributes to the existing football literature by testing empirically the revealed preferences, not just behavioural attitudes, or attendance intentions. We use econometric tools for analysing real-world historical football data and apply sociological and economic theories to more conventional viewpoints. This contributes and connects to existing sports economics literature on UOH. It has been noted that especially the research groups focusing on sport management, economics, business, and sociology have been important drivers in football market research. 14 Additionally, we use unique long time-series data (1947–2022) from the Finnish elite football league (Veikkausliiga), as there exists a clear shortage on fan attendance studies on Nordic football scene. Veikkausliiga is the very few summer leagues in Europe, which offers a particularly interesting case in football. Various measures for ‘sinful’ effects on football fan motivations (alcohol usage, violence) are also considered. In this paper, our focus is on the effect of UOH and economic variables to football attendance in Finland. The Finnish football context Finland has been characterized by a strong civic sector with voluntary activities having a key role in running sport clubs, which has delayed the emergence of a market-oriented environment for sport. Football’s developmentalong amateur principles were also strengthened by the decision of the Football Association in the 1920s. 15 Alack offitforpurpose facilities, late urbanization, and an agriculture-focused economic structure were not favourable for professional football either. 16 Finland is a country where modernization and nation-building processes occurred – contrary to many other European countries – without football playing a key role. The social and cultural relevance of football did not appear until the postmodern era in those countries. 17 Even though football is the most popular team sport when looking at the number of registered players, participation on the grassroots level, for a long time, did not translate into international success or considerable growth in attendance. 18 Indeed, the number one spectator sport in the country is ice hockey, currently only rivalled by the emerging e-sportscene. 19 Since the 1970s, commercial actors have started to play an increasing role in the sports landscape. The involvement of the market has become essential as running clubs competitively require 2E. MANGELOJA AND M. SZERÓVAY resources. Market actors expected increasing publicity. Consequently, the sport product – market – media triangleemerged, marked by interdependencies between the actors involved. The league system with launching the Veikkausliiga as the top tier in men’s football took place in 1989. This can be seen as a clear sign of professionalization; however, up to now no significant football business has emerged in Finland. Even nowadays, the clubs in Veikkausliiga represent semi-professionalism of various degrees. Nevertheless, these developments suggest that Finland has been increasingly connected to the international football system. Attendance numbers have remained quite stable during the last decades in the top division. In Figure 1, the average attendance numbers are presented. With the Championship series established in 1930– the first national series in a league format – football’s popularity has gradually grown in the 1940’s among spectators, which has been reflected in moderate attendance levels since then. In Table 1, the basic characteristics of Veikkausliiga teams are presented. A club from the Finnish capital Helsinki, HJK, has the longest and most successful history – with a stunning total of 31 league titles on the men’s side – in Veikkausliiga. Veikkausliiga is currently made up of 12 teams with a typical European open league system. The team finishing 11th plays a two-legged relegation battle against the second-placed team from the First Division (Ykkönen). Since the 2018–2019 season, Veikkausliiga has undergone a structural change with the implementation of a play-off phase after the regular season. The aim is to create more meaningful games and excitement towards the end of the season. The regular season is played as a round robin tournament, bringing the total number of matches to 132. The table is then split into an upper six-team ‘Championship Series’ and a lower ‘RelegationSeries’ made up of the lowest placed teams. The winner of the championship series wins the championship, and the lowest placed team in the relegation series drops to Ykkönen. Further, a five-team final stage is played to determine the allocation of a UEFA Europa League qualifier spot for the following season. These modifications have increased the total number of games played to 167 during the season. Theoretical framework and research on stadium attendance The first contributions to the economics of soccer literature are widely acknowledged as being analysed by Peter Sloane. He was the first to note the special characteristics of soccer players' labour market and he questioned the appropriateness of a profit-maximizing objective function for soccer team owners. More relevant to our work, he also discusses the implications for special competitive Figure 1. Average attendance of the championship series (mestaruussarja 1948–1989) and Veikkausliiga (1990–2022), time period of 1948–2022. Source: The Football Association of Finland statistics. SOCCER & SOCIETY 3 environment of team sports compared to other industries. 20 The collective interest of a league’s member teams in preserving some degree of competitive balance to maximize spectator interest makes elite team sports business environment unique related to other conventional industries. 21 A well-documented review of contemporary attendance factors is written by Patrick Feehan. 22 A recent review of the current attendance literature by Dominik Schreyer and Payam Ansari 23 concludes that while there is a rich and continually growing body of empirical literature modelling the determinants of stadium attendance research, analysis on smaller football leagues is lacking. As several researchers note, spectator demand studies on Nordic football leagues remain an underdeveloped research area. 24 In this article, we aim to alleviate this shortage by examining the Finnish football league attendance characteristics. As with usual products and services, attendance demand is influenced by economic factors, such as price and income. In addition, team performance, uncertainty of outcome, competition from televised games, sociological factors, match scheduling, weather conditions, the rivalry of teams, and the size of the league are potential explanatory variables for stadium attendance. 25 Recent scientific literature in football has seen numerous approaches applied by scholars to gain a better understanding of stadium attendance across various elite leagues. Bradbury pointed out that, in accordance with many earlier studies, on-field performance is positively correlated with attendance. 26 Positive novelty effects for newer teams and football-specific stadiums have also been identified; nevertheless, stadium age did not prove to be significant. Furthermore, substitution in demand has been looked at in the German context with the finding that scheduling overlaps (spatial and/or temporal overlaps) of games across divisions affect demand. 27 Demand variables explaining stadium attendance typically include consumer preferences, economic variables, quality of viewing and characteristics of the sporting contest. 28 In this paper, we will concentrate on examining these types of explanatory variables. UOH, which attempts to capture the competitive balance of a match or a league, has been an especially popular concept to explain football attendance. Research on league-level UOH has continuously taken steps forwards, for instance, by applying the concept of ranking mobility as a dynamic indicator of long-term competitive balance. 29 In addition, some researchers have employed the concepts of competitive advantage as well as competitive intensity, the latter enabling a more nuanced analysis by taking into consideration the relevance of league standing and sporting stakes when calculating the uncertainty of outcome. 30 Measuringcompetitive balance – when looking at end-of-season outcomes – may be carried out by way of two fundamental dimensions, win dispersion (static, within season) and performance persistence (dynamic, across season). 31 Despite the growing literature on the topic, UOH remains a controversial subject on attendance literature as it is not unanimously supported in the empirical research. Nevertheless, even an opposite effect can be found on several Table 1. Veikkausliiga teams in the 2023 season (summer season from April to October), ordered by the number of seasons played in the top tier league. Club City Stadium Capacity # of seasons HJK Helsinki Bolt Arena 10,770 83 KuPS Kuopio Savon Sanomat Areena 5,000 65 FC Haka Valkeakoski Tehtaankenttä 3,516 64 VPS Vaasa Elisa Stadion 6,009 57 FC Lahti Lahti Lahti 4,000 49 Ilves Tampere Tampere Stadion 16,800 40 FC Inter Turku Veritas Stadion 9,372 25 IFK Mariehamn Mariehamn Wiklöf Holding Arena 1,650 17 FC Honka Espoo TapiolanUrheilupuisto 4,100 13 SJK Seinäjoki OmaSP Stadion 6,000 11 KTP Kotka Arto Tolsa Arena 4,780 9 AC Oulu Oulu Raatti Stadium 4,392 3 Note: Number of seasons includes seasons played in Veikkausliiga (1990–present) and preceding Mestaruussarja (1948– 1989) and seasons of predecessor teams after season 2022. In the case of mergers, the seasons of the predecessor with the most seasons are counted. 4E. MANGELOJA AND M. SZERÓVAY occasions. 32 Many spectators support the home team and therefore rather prefer to see their team play a much inferior team when winning is more probable. Fans rather care about the reputation of clubs than the thrill of outcome uncertainty. 33 On the other hand, several papers find support on the outcome uncertainty hypothesis. 34 UOH will be one of the main explanatory variables in our attendance modelling. There exist various theoretical schools for explaining the football fan behaviour. We draw our empirical model mainly on thepersonal investment theory(PIT) 35 which offers a multi-pronged explanation of factors explaining the attendance decisions of sports consumers. Figure 2 reveals the connection between PIT and other contemporary attendance theories. PIT divides attendance antecedents into three main categories: fan-focused, relationship-focused, and product-focused antecedents. First, regarding the fan-focused factors, Sloan named five main theoretical bases, which are salubrious effects, stress and stimulation seeking, catharsis and aggression, entertainment, and achievement-seeking theories. 36 Fan motivation for attendance surges from various sources. Sports involvement is attractive, because it provides pleasure, mental well-being, reduces aggression levels, gives aesthetic entertainment, and gives life manageable amount of positive stress and stimulation. As Frey and Gullo show, 37 sports give its practitioners happiness (more than any other way around). Sports allow people to relieve the strain of everyday life by providing excitement. Spectating sports brings people happiness, 38 which is also supported by Baade and Tiehen. 39 Second, relationship-focused factors stem from identification, trust, and commitment. In addition to the PIT, these factors are also relevant to the social identity theory (SIT), which focuses on identification with an entity which can influence how individuals think, act and feel, because a key function of the entity (e.g. team or organization) is providing members with a strong sense of who they are based on their membership with the entity. 40 Indeed, membership of a social group, for example being a football team fan, is an important mediator of an individual’s cognitive and behavioural processes. Relationship-focused factors can also be analysed within the context of the Serious Leisure Perspective (SLP) developed by Stebbins. 41 Further, the Psychological Continuum Model (PCM) 42 elaborates the analysis of the relationship-focused factors. Third, product-focused factors can be best captured by contemporary economic theory, which suggests that the demand for spectator sports depends on various economic and other determinants. 43 Those include, for example, the price of the event, incomes of spectators, Figure 2. Personal investment theory and its relationship to other attendance theories. SOCCER & SOCIETY 5 unemployment, prices of substitutes groups, market size (usually proxied by local population), importance of the contest, and closeness of the competition (measured by the uncertainty of outcome). Drawing on this broad framework provided by PIT, we sharpen our focus by applying fan-focused and product-focused variables as explanatory variables. Unfortunately, we do not have valid data for relationship-focused variables. Nevertheless, we use several quality of viewing and sporting contest characteristic variables (such as the number of goals, number of teams in the league and number of games during the season). Characteristics of the sporting contest also include the quality of the games. The number of goals scored during the games increases fan excitement, so that is often used as an explanatory variable in attendance studies. 44 The number of games played during the season is typically included in attendance models. 45 More games played increases the total seasonal attendance and could also increase the average gameday attendance as the league gets more media attention. Several studies have also included the number of the teams in the league as an explanatory variable. Increasing the number of teams in the league could reduce the attendance, as there will be more games with greater points’ difference between the teams and more matches of less importance, more games with bad weather and the inclusion of teams from smaller towns. A number of teams have usually been found to be having a negative effect on the attendance. 46 On the other hand, more teams in the league could also increase the number of local derbies and geographical coverage, which could have a positive effect. Our main focus in this paper is using UOH and additionally also economic factors (incomes and unemployment) as explanatory variables to test the significance of those variables suggested by economic theory. UOH measures the relative quality of the games. 47 Economic variables are essential for the potential spectators’ budget constraints and for factors that affect their attendance costs. Increased income and lower cost increase demand for spectator sports. Economic growth, income level and unemployment rate are examples of variables representing the budget constraints for fans (measured at the macro-economic level). Football ticket is usually found to be a normal good as income is positively associated with sports’ spectatorship, 48 while some results suggest that football spectating might in some cases be an inferior good with a small price elasticity. 49 Unemployment is usually found to be positively associated with attendance. Increased spare time outweighs the direct decrease in purchasing power. 50 Several studies also include the geographical explanatory variable regarding the size of the population in the area. Population is usually a significant and positive driver for attendance. 51 In addition to PIT, when choosing the applied demand explanatory variables, we follow the example of previous research where demand variables are explaining consumer preferences, quality of viewing, characteristics of the sporting contest and economic variables. 52 Data and model The time-series model is estimated to explain the attendance of Finnish men’s top division football matches (on the league level). The data consists of the years 1947–2022 with 72 yearly observations of the variables, which is the maximum data period for which the data is available from the reliable public sources of the Football Association of Finland. Demand factors of elite sports are commonly analysed applying Rottenberg’s uncertainty of outcome hypothesis (UOH). 53 It states that fans prefer close matches between rivalling teams. Uncertainty of result makes games interesting and worth buying an entrance ticket. It has been previously estimated that the ideal probability of winning is about 60–66%, favouring home team win but leaving some uncertainty and excitement into match day. 54 Competitive balance is usually evaluated using various measurements. The most commonly used measurement is ‘r’ ratio, which is the actual standard deviation of winning percentages to the ideal standard deviation. 55 Alternative measurements include the Herfindahl– Hirschman index and the Gini coefficient. In our model, the competitive balance is measured 6E. MANGELOJA AND M. SZERÓVAY by the value of ‘r’-ratio, which is calculated as a relation of actual-to-idealized standard deviation. The value of the actual-to-idealized standard deviation is calculated as: rt¼ffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi PN i¼1wi;t0:5 � �2=Nt q0:5=ffiffiffi st p where w i,t is the win quotient for team i in season t, N is the number of teams, and s is the season length in rounds. The larger value of ‘r’ implies a more competitive unbalance between the teams of the league. If competitive balance is an important factor for game attendance, a negative sign is assumed for the regression coefficient estimator. The focus is to test whether competitive balance can significantly explain the attendance. In addition to the plain ‘r’ –ratio, also squared competitive balance indicator was considered as an alternative explanatory variable to test for possible nonlinear effects, but no nonlinearities were found. Therefore, no nonlinear competitive balance indicators are included in our model. In this paper, our perspective is the long-term competitive balance (multiple seasons) as opposed to shortterm (single game) and mid-term (one season). Finnish sports culture includes alcohol consumption during the games as one important factor for drawing more fans to see matches. Additionally, there is a clear increasing trend of alcohol consumption in Finland since 1970s, being nowadays about 10 l per capita (over 15 years old population and pure 100% alcohol). According to research on Finnish sports fan base, over 50% of the Finnish fans believe that alcohol consumption increases the entertainment value of elite sports. 56 The percentage of positive attitudes is especially high among the fans of football and ice-hockey. Finnish society has changed for more open-minded alcohol consumption in public spaces such as football arenas. Consumption behaviour has transformed from spirits to beer and wine drinking, which has maybe become one element of the game experience for some football fans. Therefore, the alcohol consumption trend is also tested as a potential explanatory variable to the model. 57 Our estimated models include the explanatory variables suggested by the PIT and previous research literature on soccer stadium attendance. Several basic economic variables are also included in the model as game tickets of elite series are expensive and attendance could be assumed to increase during the economic booms and decrease when the economy hits into recession. The economic variables included in the model are per capita economic growth and unemployment. Negative sign for unemployment variable is assumed as game tickets are expensive in Finland. On the other hand, unemployed people would have more free time to spend in games so the assumed correlation is somewhat ambivalent. The number of games played during the season, the number of goals and the number of teams in the league are included for obvious reasons as more games, goals and more teams imply more ticket sales. The number of goals made increases the entertainment value and the quality of games, thus increasing the attendance. We also include Finnish population data to our model and test its significance, as it could be argued that changes in the overall national population would increase the potential attendance to football games. Football is not a violent sport (contrary to, e.g., ice-hockey, which is the most popular spectator sport in Finland nowadays), but we also allowed the possibility of violent behaviour on the field to affect fan enthusiasm in some way. Aggressive play on the field could entertain some fans but may be a negative signal for family-oriented spectators. Therefore, we do not make any assumptions of the sign or significance of the penalty variable. A number of penalties (yellow and red cards) were tested for correlation with attendance, but no signals of any relation were found. Attendance measures had no statistically significant correlation with yellow or red cards given during the season. Correlation coefficients were −0.4974 and −0.3534 with yellow and red cards, respectively. 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