Racial Discrimination in Professional Basketball: Evidence from Nielsen Ratings

Abstract

Using data on Nielsen ratings for locally televised NBA basketball games, we find strong evidence that viewership increases when there is greater participation by white players. This finding controls for a wide variety of other factors that could systematically affect Nielsen ratings, and signifies the presence of customer discrimination in the market for NBA players. We also find that higher Nielsen ratings allow NBA teams to realize greater advertising revenues, meaning that the marginal revenue product of white players exceeds that of comparable black players. This factor explains much of the race‐based salary gap that exists in professional basketball.

Do People Value Racial Diversity? Evidence from Nielsen Ratings

“…Only the most loyal fans are likely to watch this broadcast-a group which is unlikely to be affected by the race of the quarterback. The possibility that race effects are driven by marginal fans is consistent with existing evidence on professional basketball, where white basketball player effects are often stronger in television ratings than in attendance (Kanazawa & Funk, 2001;Kahn & Sherer, 1988;Dey, 1997). 15 As a further test, we estimated models using team fixed effects, identifying the black quarterback effect by examining ratings for teams broadcast multiple times with quarterbacks of different races.…”

“…Such an expectation would be reasonable if, for example, executives considered a white own-race effect to be the dominant factor affecting ratings. Kanazawa & Funk (2001), in their study of race and Nielsen ratings for basketball games, present empirical evidence consistent with this view, although we will argue later that this evidence is also consistent with positive preferences for diversity. Own-race effects also appear to be dominant in other re- cent studies of population characteristics and media markets (Waldfogel, 2003a,b;George & Waldfogel, 2003).…”

“…Holzer & Ihlanfeldt (1998) show that firms with white clientele are less likely to hire black workers. Additional research has found evidence of customer discrimination, in the form of attendance, television ratings, or other metrics, in the market for sports entertainment (Kahn & Sherer, 1988;Nardinelli & Simon, 1990;Hanssen & Andersen, 1999;Kanazawa & Funk, 2001; see Kahn, 2000 andKahn, 1991 for literature reviews). Evidence of own-race preferences and firm responses to these preferences has been shown in the markets for radio broadcasts (Waldfogel, 2003a), newspapers (George & Waldfogel, 2003) and television broadcasts (Waldfogel, 2003b).…”

“…If black own-race effects vastly exceed white own-race effects, then television ratings should decrease as the fraction of white players increases. Kanazawa & Funk (2001) report exactly the opposite pattern: that ratings for professional basketball broadcasts in the U.S. are higher when more white players take the court. Some evidence of a similar effect in basketball game attendance exists, though the magnitude of this effect decreased in the 1990s relative to the 1980s (Kahn & Sherer, 1988;Dey, 1997).…”

Stadium attendance and television audience demand in English league football

“…They find that the number of star players involved in the match had a significant influence on the ratings for different categories of broadcast, such as national over-the-air, national cable, local over-the-air and local cable. Other studies which have examined television audience demand are Kanazawa and Funk's (2001) study of basketball in the NBA and the study by Forrest et al (2005) of the FAPL.…”