Analysis: the economics behind the rise and fall of spectator demand for hurling and football games.
With gate receipts and average attendances falling in 2018, was the start of 2019 an opportune time for the GAA to increase ticket prices? Research into the factors determining spectator demand for sporting events has long being the preoccupation of sports economists. The discipline of economics is well equipped to carry out this work because sporting events can be treated just like any other commodity who demand is determined by several standard economic variables such as price of the product, price of competing products and income.
Much of the literature on spectator demand comes from studies of team sports in the UK and United States. In terms of the effect of price, the vast majority of these studies find demand to be price inelastic - that is, a proportionate increase in the price of the product leads to a less than proportionate decrease in the quantity demanded for the product. Put more succinctly, attendance demand does not respond greatly to price changes.
From RTÉ One's Prime Time, is the increase in GAA ticket prices justified?
Several theories have been put forward to explain this with the most common being that people attend matches out of a sense of loyalty to support their teams and are not unduly influenced by the cost of doing this or its cost relative to other sports. Whether GAA matches are price inelastic or not requires more data and research, but attendances at early National Hurling and Football League matches have held up reasonably well despite the price increase, suggesting that this may be the case.
Research has shown there to be a stronger link between spectator demand and income especially when changes in income are examined over a long time period. All else being equal, attendance demand responds positively to the economic cycle, that is, when incomes increase, attendances increase. The opposite is also true. For example, research carried out on the effect the recession in the early part of this decade had on spending by Irish households on sporting items found attendance at sporting events to be negatively affected to a much greater extent that other sporting purchases (e.g. sports participation costs, club subscriptions). The strong positive effect that incomes have on attendances was also used by the GAA president, John Horan, in his defence of the ticket prices increases.
From RTÉ News, GAA president John Horan addresses the ticket price increases announced by the GAA in January
But can price and income changes fully explain GAA attendance demand? For example, can they explain the fall in gate receipts in 2018? It is clear that there are other variables which must also be considered when examining attendance demand. Sports economists have recognised the limitations that standard economic variables have and regularly use a range of other factors. These include the importance of the contest in terms of competition outcomes, the closeness of the competition (i.e. uncertainty of outcome), whether that be in a specific match or over a full season and a measure of the quality or entertainment value provided.
Uncertainty of outcome is a factor which is assumed to be strongly related to attendances. Clearly, the more predictable the outcome, the less demand there is from spectators. Uncertainty of outcome is also associated with the concept of competitive balance in a sports competition and a large body of research has been devoted to measuring and understanding what determines inequalities in sports leagues.
The football championship in particular has received much scrutiny in recent times with regard to competitive imbalance, with debate about the dominance of Dublin and the need for a tiered championship structure. In contrast, the hurling championship has been lauded as one of the best in recent memories, mainly due to the closeness of many of the games.
The fact that average attendances for the All Ireland football series matches in 2018 decreased by 30.6%, while average attendances for All Ireland hurling series matches in 2018 increased by 23.3% would suggest that issues like the importance of the contest and outcome uncertainty may be part of the explanation for the fall in spectator figures in the football championship. The GAA president even alluded to this, when he stated that a lack of glamour matches and the number of games in quick succession were some reasons for the drop in attendances in last year's football championship.
From RTÉ Radio 1's The Business, Irish Times Business Affairs Correspondent, Mark Paul on the rising cost of ticket prices for Premiership matches
The quality or entertainment value of the football championship in comparison to the hurling championship has also being highlighted as a potential reason for the drop in attendances. Entertainment value is a concept that sports economists find more difficult to measure. Some use a simple metric of the number of scores in a match, but this can be too crude to capture the nuances of a game. A low scoring game can be just as entertaining (or boring) as a high scoring game. This serves to demonstrate that a mix of factors attract spectators i.e. a large number of scores, but also a competitive game. Currently, it appears that hurling rather than football is providing a better spectacle in this regard.
So should the GAA be worried? The effect of increasing prices will probably not have a significant effect on attendances assuming demand is price inelastic. Incomes should not change dramatically either in the short-term. Thus the effect of these economic variables taken in isolation will, in all likelihood, be minimal.
It is changes in the other variables discussed above, which should be of more concern to the GAA. While it may be difficult for the GAA to address issues such as the uncertainty of outcome and competitive balance in the short term, improving the entertainment value of the game is something that they could address in the short term and indeed are doing so through the experimentation of rule changes for football in the National League. I would think that most GAA fans would trade off paying a little bit more for a better quality of product so the outcomes of these rule changes will be interesting. Whether they will be a success or not remains to be seen. Attendances will clearly input into that verdict.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ