Competition and Fan Substitution Between Professional Sports Leagues

Abstract

A peculiarity in professional sports is the fact that leagues regularly hold monopoly power within their sports. However, whether and to what extent these leagues may compete with other leagues across sports is relatively unexplored. This paper contributes to the literature by analyzing competition and fan substitution in Germany, where top-tier league managers in handball, basketball, and ice hockey have recently claimed that their teams suffer from football’s dominant position. Our attendance demand models confirm the existence of significant substitution effects in this setting, which suggests that leagues indeed do compete economically across sports for fan attendance.

Substitution Effects and the Transnational Demand for European Soccer Telecasts

“…In markets in which a large share of the viewers has no particular loyalty to a league or a club, 3 general (i.e., unaffiliated) soccer fans might seek to consume any soccer telecast available. As such, telecasts of different leagues might indeed constitute close substitutes (Mills & Winfree, 2016; Wallrafen et al, 2022). However, since each league has different characteristics (e.g., in terms of (club) brands and/or the style of play), viewers might also be interested primarily in a specific league.…”

“… 4. While our focus is TV viewing, it is worth noting that several studies have already dealt with the impact of foreign soccer telecasts on domestic in-stadium attendance (e.g., foreign leagues-Norway: Solberg & Mehus, 2014; English Premier League-Denmark: Nielsen et al, 2019). Moreover, studies have examined the impact of supranational competitions (e.g., UEFA Champions League telecasts) on in-stadium attendance (e.g., English Football League: Buraimo et al, 2009; German Handball, Volleyball and Ice Hockey Leagues: Wallrafen et al, 2022). …”