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‘Fan Equity’: Ottawa vs. Detroit

George’s recent post has turned me on to Emory University’s ranking of what they’ve called ‘social media equity’ among NHL fan-bases (Detroit was first – congratulations) and the broader work they’ve done on sports marketing statistics.

My Senators have not done well in these rankings.

Ottawa ranked 26th in the social media study, and was declared to be the ‘worst hockey city in Canada’ by the authors. This conclusion follows on the heels of an earlier study released by the same authors last week, which looked at ‘Fan Equity’. This study ranked Ottawa 28th out of 29 teams (Jets were excluded, due to their move) and had the following to say:

“This is just embarrassing for a Canadian team. Let us respond to the Ottawa fans right now. We don’t care that you sell out – read the description of the method.”

I’m not a statistician, but I do love a good argument – so I’m going to take them up on their offer and try to defend the Senators’ honor. I’m going to try to do this by comparing Ottawa with the team they’ve ranked 7th 14th (earlier mistake corrected) in ‘Fan Equity’, the Detroit Red Wings.

First, the aforementioned method is summarized by the authors as follows:

The basic procedure begins with a statistical model that predicts a team’s box office revenues based on market potential (population and median income), team quality (winning rates) and other factors (such as team payroll). We then compare the predictions from this model with each team’s approximate box office revenues to determine which teams over and under perform.

The period studied is the last three years. At the outset, I’ll concede that Detroit has the higher winning rate (more points over the three seasons considered). They’ve also had the higher payroll with Ottawa having been closer to the bottom in that department in recent years. I don’t really know how they used these numbers (presumably it’s harder to sell tickets for a team that doesn’t win as much and doesn’t spend as much), how they accounted for injuries to star players, etc. So I’m going to mostly leave those numbers aside for the purposes of this little critique.

The numbers I’m going to concern myself with are population, median income, and ticket price and how they’ve been used to reach their conclusions, and calculate the predicted box office revenues that form the basis of their model.

The 'City of Detroit' has a population of just over 701,000 and a median income around $25,000. The 'City of Ottawa', by contrast, has a population of just over 880,000 and a median income of about $33,000 CDN. Ottawa has a very slightly higher average ticket price than Detroit (15 & 16 on last season’s list of ticket prices, respectively).

On the basis of those numbers, a sellout in Detroit would seem to produce a much higher 'fan equity' than a sellout in Ottawa. Detroit is producing the same result from a smaller fan-base with a lower disposable income. This would seem to validate the types of results they’re coming up with.

But as anyone who's ever been to both these cities can tell you, what we think of as 'Detroit' is far larger than Ottawa. The reason for the discrepancy is that the 'City of Ottawa' is an amalgamated city comprising a mostly rural area of over 1000 square miles, whereas the 'City of Detroit' is under 150 square miles, and all of it urban and dense.

Compare the 'Metro' populations of the same two Cities - 'Metro Detroit' (which probably doesn't include neighboring Windsor) has an area over 3000 square miles and a population of almost 4.3 million. 'Metro Ottawa' (which does include neighboring Gatineau) has an area just over 2200 square miles, and a population just over 1.2 million (and if you were to extend it to 3000 square miles to encompass the same area as Detroit, you'd probably still only capture a few more relatively small urban centres and a lot of thinly populated rural area).

Using these numbers, Detroit now has an additional 3.5 million 'fans' to draw on to create a sellout. Ottawa only gains an additional 300,000 ‘fans‘ - so it follows that Ottawa selling out its rink is a far more impressive feat than a Detroit sellout at approximately the same average ticket price. Even with Ottawa’s slightly higher median income, Detroit has an extra 3.1 million potential butts for its seats to draw on for every game.

Should it not therefore follow that Detroit would have a much higher expected box office revenue? Would that not be particularly true if you concede (as I have) that they had the better team over the period considered? Maybe the fact that Ottawa sells out fairly consistently is even worth caring about?

As I say, I’m no statistician – most if not all of my numbers here are taken from the ever reliable Wikipedia  - and I’m not privy to the undoubtedly complex and detailed work behind the final results.  But -  I was invited to ‘read the method’, and when I did so and applied my logic to it, I still see how Ottawa (and its fans) could be getting unfairly shafted.

Filed in: NHL Teams, Detroit Red Wings, Ottawa Senators, NHL Talk, NHL Business of Hockey, | KK Hockey | Permalink
  Tags: emory+university, sports+marketting

Comments

Hockeytown Wax's avatar

“The ‘City of Detroit’ has a population of just over 701,000 and a median income around $25,000.”

Sorry ... I just have to laugh at the accuracy of the study knowing full well 99% of the people that actually go to Red Wings games are from the suburbs so those city figures mean squat.

Ottawa should be ashamed of themselves simply based on the fact its a Canadian city ... forget about the population size and average income.

Detroit teams will out-draw a Canadian team because we have so many highly populated suburbs that surround the city.

The only thing that would balance things out form Ottawa’s perspective is, they have just a hockey team and a football team ... no basketball or baseball to siphon more income out of peoples pockets.

There is a whole lot more data that study needs to take into consideration to make it more accurate ... and they didn’t.

Just thinking about it makes my head hurt ... LOL

Posted by Hockeytown Wax from West Bloomfield, Mi. on 09/19/13 at 05:58 PM ET

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

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