ATTENDANCE PAlTERNS AT VICTORIAN AND SOUTH AUSTRALIAN FOOTBALL GAMES

by PETER FULLER and MARK STEWART

I. Introduction The Coodabeen Champions once suggested that if the Australian

Football League (An) was to begin making apologies for their mistakes, it should also come clean and apologise for the greenhouse effect, child poverty and third world debt. This reflects a belief widely held by many football enthusiasts that the AFL is conspiring against the best interests of the game.

However, the statistical analysis in this paper suggests that in the matter of spectator appeal, the AFL's policies have played a part in reversing a long term downward trend in attendance in Victoria. In South Australia, the admission of the Adelaide Football Club (AFC) to the national compe- tition in 1991 has seen an increase in the number of people attending football in that State.

We recognise there may be many other criteria by which the success or otherwise of football administrators might be judged. Many of these factors do not lend themselves to easy quantification. Therefore this paper confines itself to the objective measure of spectator numbers. A simple econometric model is used to quantify the determinants of attendance at football matches.

Earlier studies have established the key factors affecting attendance for a variety of spectator sports in Britain and the United States.' These include the

real price of admission (nominal price corrected for inflation), real income of possible attendees (nominal income corrected for

potential supporter base (population of the relevant geographic area), uncertainty of outcome of the contest, significance of a particular game (team quality, style of play, star players

stadium size,

inflation),

etc . . .)

~ _ _ _ _ ~ ~~ ___

*Department of Economics and Finance RMIT. This paper is a revised version of an RMIT Centre in Finance Working Paper (4/93) April

1993. If readers require more details of the statistics presented here they should refer to the above mentioned working paper. 1. See Cairms et a1 (1986) for a summary of the previous studies.

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safety of spectators, and television coverage. Borland and Lye (1991) studied attendance at Australian football. They

considered attendance for each VFL match 1981/86.’ They identified vari- ables specific to individual games, as well as season-specific factors that influenced attendance. Real price, real income, television and unemploy- ment were the season-specific variables tested, while the match-specific factors included ground capacity, the weather, uncertainty of outcome, prior success of the competing teams, lagged attendance (as a measure of habit) and the effect of split rounds.

Borland (1987) considered season aggregate VFL attendances 1950/86. He looked at a number of variables, including the real price, real income, television and uncertainty of outcome.

This paper also examines season attendance, but it extends the time frame to 1948/94. The South Australian experience during a similar period has also been considered.

11. Scope of this Study In this analysis the focus is on attendance at minor round A F W L foot-

ball games played in Victoria (Melbourne and Geelong) and minor round South Australian National Football League (SANFL) and Adelaide Football Club (AFC) games played in South Australia (Adelaide). Attendance at finals and games played outside Victoria and South Australia have been excluded.

In any product analysis it is necessary to define the market. In this paper we are looking at the markets for football spectators in Victoria and South Australia.

The Victorian attendance figures were derived by excluding home game attendances for Sydney (1982 on), Perth and Brisbane (1987 on) and Adelaide (1991 on) from VFWAFL figure^.^

The South Australian attendance figures were obtained by adding AFC home game attendances to SANFL minor round attendances from 1991/93. Prior to 1991 the data obviously refers to the SANFL only.

The analysis was confined to minor round matches because additional/ different factors are likely to affect finals attendances (for example varied admission prices, ground capacity and the support base of the teams involved).

Chart 1 shows average attendance per minor round game in both States.‘ As Melbourne’s population is approximately three times that of Adelaide

it is not surprising average attendance per game is substantially higher in

2. The AFL was known as the Victorian Football League (VFL) until 1991. 3. Prior to 1982 there were a handful of VFL games played outside Victoria. No attempt was

4. The Victorian data series is 1948 to 1994, the South Australian data is 1948 to 1993. made to consider the impact of attendance at these games.

a4

CHART 1 AVERAGE A T E N D A N C E PER GAME

01:::::::::::::::::::;::::::::::::::; i : : : : : : : : : - 4 (ID N * O m N d O m O N I O ( I D 0 N I O m N * t % ~ m 0 w 8 O 0 9 a h ~ ~ ~ ~ a ( 1 ~ 0 m m ~ ~ ~

yorm

Victoria than in South Australia. A more appropriate comparison can be made by considering attendance on a per capita basis. That is, proportion- ate to the populations of the cities where games are played. Chart 2 illustrates this.

This chart shows that for most of the post-war period South Australian attendance (on a per capita basis) was higher than that for Victoria.’ In both States (until recently) attendance was in decline, indicating football

CHART 2 A77ENDANCE PER GAME PER MILLION PEOPLE

5. Chart 2 was produced by dividing A F W L attendance per game by Melbourne plus Geelong’s population. Adelaide’s population was used for SANFUAFC games. The popu- lation figures were derived from Census data.

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was becoming proportionately a less popular form of entertainment. The popularity of football in Victoria reached its nadir in 1987. In each subse- quent year attendance has risen, with the exception of 1991.6 In South Australia, football’s popularity reached its lowest point the year before the introduction of the AFC in 1990.

111. Factors Influencing Football Attendance In both Victoria and South Australia the reversal of these downward

trends in attendance appears to coincide with significant changes in each competition. In the mid to late 1980s the AFIJVFL introduced a number of modifications. Among these were:

the continuation of progress towards a national competition with the introduction of F’erth and Brisbane (1987) and Adelaide (1991) follow- ing the relocation of South Melbourne to Sydney in 1982. the move towards night and Sunday games. In 1975 the 22 minor round games were played on just 23 different days, while in 1994 the equiva- lent number of rounds were played on 53 different days in Melbourne and/or Geelong. While this allows a football fanatic to contribute to attendance figures on a multiple basis during most weekends, its major impact is probably to permit those with other Saturday afternoon commitments to attend matches schedules at other times. the continuation of ground rationalisation. Richmond (1965), North Melbourne (1985) and Essendon (1992) all moved their home games to the MCG. Fitzroy (1967)’ and Hawthorn (1974) began playing at Princes Park, while Hawthorn (1991/92) and St Kilda (1993) moved to Waverley Park. In 1985 36% of all minor round games played in Victoria were either at the MCG or Waverley Park (formerly VFL Park), while in 1993 this figure was 59%. These moves have generally shifted matches to grounds with greater capacity as well as providing improved spectator comfort. the introduction of the national player draft in 1986, the salary cap in 1984 and subsequent modifications to these arrangements, which were designed to make the AFL/VFL more competitive? the recent draft concessions for the perpetual poor performing clubs. In South Australia the major change was the entry of the Adelaide team

in the national competition in 1991. Prior to this attendances at football

6.1991 was the year of the construction of the Great Southern Stand at tbe Melbourne Cricket Ground (MCG).

7. Since 1968 Fitzroy has also spent time at the Junction Oval and Victoria Park, before returning to Princes Park, and in 1994 moved home yet again, this time to Footsaay.

8. The first national player draft took place in November 1986, allocating players for the 1987 season. A modified version of the draft, applying to interstate players only, was introduced in 1982.

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games in South Australia had been in continuous decline. One of the reasons for the falling popularity of the SANFL may have been the less than favourable comparison with the now national AFL competition. This was being highlighted by live telecasts of AFL games in direct competition with SANFL games.

To ascertain the impact of these changes in the increase in attendance in both States, the conventional determinants of sporting event popularity were systematically examined.

In seeking to explain variations in the sales of any product a key variable is price. Specifically the price of the product and the prices of close sub- stitutes and complements (items used in conjunction with the product). As Borland and Lye indicate, the total cost of attending football should include the prices of the complementary products such as transport, park- ing, food, cost of reserved seating at some venues, etc. Like those researchers, however, the present inquiry could not find adequate reliable data on these factors. Also, like the earlier studies, the prices of close sub- stitutes were not considered. Rather, we used the real price of admission (excluding inflation), as this measures the price of attending football rela- tive to the price of all products.

Chart 3 shows the real minimum price of adult admission to the “outer” for minor round games in both states.

CHART 3 REAL PRICE OFADMISSION

10.0 9.0

* 7.0 8 6.0 5.0 I 4.0 3.0 2.0 1 .o

ao

This chart indicates that the real price of attending football has generally been higher in Victoria than South Australia. The real price in Victoria rose slowly from 1962, and substantially from around 1970 until 1985; thereafter it declined slowly, with rises during the past five seasons. In South Australia both the increases and the declines followed a similar

87

pattern, although the advent of the AFC has increased prices in the last three years.9

Another important determinant of sales of any product is real income. Many studies of attendance at sporting fixtures have drawn interesting inferences about the relationship between variations in income and atten- dance patterns. Average weekly earnings were used to measure the impact of changes in income on the popularity of football in each state.

Much of the attraction of spectator sport is derived from the uncertainty of outcome. Research has tended to confirm the intuitive proposition that spectators will be attracted to (prospectively) even contests.'O We measured competitiveness by calculating the standard deviation of wins of teams in the competition at the completion of each season. According to this mea- sure a perfectly competitive season would imply each team winning and losing precisely the same number of matches. In recent AFL circumstances this would mean all teams would conclude a 22 match season with 11 wins and 11 losses and our competitiveness index would read zero.

Because of the change in the number of teams in the competition over our data period we developed two competitiveness indexes. 1. The first index was calculated for only the top twelve teams in the

AFWVFL competition, and the top eight in the SANFL. Chart 4 presents this index for the AFWVFL.

2. The alternative index was the coefficient of variation for all teams in the AFLNFL and SANFL competition.

Chart 5 shows this for the A F W L . CHART 4

COMPE'lKWENESS (AFUVFL)

9. From 1991-93 the South Australian figures are a weighted average of the cost of admission to AFC games and SANFL games.

10. See Cairns et al. (1986).

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CHART 5 COMPETITIVENSS (Anlvn)

60

1 5 0

1 4 0

im O m B t 10

0 0

~ O N b O Q O ~ d W Q O N b O ~ O N b Q ~ O N * b ~ ~ ~ ~ ~ W W W W W ~ ~ ~ ~ ~ Q Q ~ Q Q ~ ~ ~

w..n

Although these measures are an indicator of competitiveness it must be remembered that

in Victoria it was only from 1970 to 1986 that all teams played each other twice, so the measure will be affected by this. the AFUVFL index applies to all games regardless of where they were played, while our AFL/VFL attendance data is for games played in Melbourne and Geelong only. in South Australia the index is for SANFL games, but since 1991 approxi- mately half of the attendance in that State has been at AFC AFL games. For the AFL,iVFL the two indexes tell slightly different stories, but they

both suggest that the draft and salary cap (introduced in the mid to late 1980s) may contribute to greater evenness of the competition.

A number of potentially influential factors were not reviewed, either on the basis of a judgement that they were unlikely to be relevant, or on practical grounds. As aggregate season attendance figures were used game specific factors could not be considered. Factors such as the weather, prior success of competing teams, ground capacity (other than in general terms) and the entertainment value were not considered. We also did not test for the impact of television coverage as matches are virtually never telecast direct to potential spectators. Finally, it is our impression that objection- able crowd behaviour is not a significant negative influence on attendance, notwithstanding occasional incidents of a quite serious nature.

VI. Results and Conclusions In earlier sections the paper discussed factors that may be important in

explaining attendance at football matches. This section reports the results from a simple econometric mode1 used to test some of the hypotheses (details of the econometrics are in the APPENDIX).

the minimum real price of admission for minor round games The variables found to be statistically significant were:

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the number of different days on which games are played during the season the construction of the Great Southern Stand at the MCG, which suggests ground capacity is important, and the competitiveness index. In both cases football supporters were also found to be creatures of

habit. This was evident as changes in factors affecting attendance take time before having an influence.

In summary, price matters, attendance is greater if matches are scheduled at different times, competitiveness appears to have some effect, stadium capacity is consequential; but changes to these factors do not have instantaneous effects on attendance.

The effect of price changes can be best seen through an economic measure known as price elasticity. This measures the responsiveness of quantity demanded to changes in price." The short- and long-run elasticities for both Victoria and South Australia have been calculated and are presented in Table 1 of the APPENDIX. Taking Victoria's long-run elasticity as an example, it implies that an increase of 10% in the real price is likely to eventually reduce attendances by approximately 6%. Therefore, the extra revenue derived through charging higher admission prices will only be partly offset by reduced attendance. So the AFL could increase gate receipts by charging higher prices. A similar story can be told about the estimates of the South Australian elasticities. The implication is that in terms of revenue derived from attendance, both the AFL and the SANFL are under charging.

Variables tested and found to be insignificant included: real income the introduction of new teams into the A F W L the unemployment rate, and changes in club membership arrangements. The insignificance of income and unemployment indicates that football

cannot be classed as either a normal or an inferior good." Borland (1987) using annual data from 1950 to 1986 found football in Victoria to be a normal good, while Borland and Lye's 1991 study, using weekly data from 1981 to 1986, found football to be an inferior good. Therefore, it may not be surprising to find we cannot be conclusive about how football atten- dance varies with income. That is, attendance at football matches appears to show a certain amount of insensitivity to changes in people's economic circum~tances.~~

It should also be noted that the introduction of new interstate teams did not significantly affect Victorian attendances. Although interstate teams

96 change in quantity demanded % change in mice

11. A price elasticity formally defined as - - 12. A normal good is one whose consumption increases as income increases, while for an

inferior good consumption falls as income increases.

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draw smaller crowds when playing in Melbourne, this appears to have been balanced by the increased interest generated by the advent of a national competition.

To the extent that increased attendance at football matches is deemed the yard stick by which football administrators are judged, we can only endorse their recent actions. Football has become more popular in both Victoria and South Australia, and the lower real cost of admission, pricing below the revenue maximising point, increased competitiveness, allowing people the opportunity to attend games at different times, ground rationalisation and the move to the national competition (especially in South Australia) seem to have played a part in this.

Appendix A number of different model specifications and explanatory variables

were tested, but the model which performed best for both Victorian and South Australian data was a non-linear partial adjustment model of the form:

AlnATTEND = h (InATTEND*, - InATTENDt-,) (1)

Where ATTEND is average attendance per million people per minor round game and h is an adjustment parameter. ATTEND* is the equil- ibrium value of ATTEND and is defined as:

lnATTEND*, = & + a, In PRICE, + a2 In COMP, + a, 1nDAYS + a, D1 (2)

Where: PRICE = real price of admission to the outer for a minor round game. COMP = competitiveness index, measured by the coefficient of variation

of the number of games won by each team at the completion of all minor rounds. This was thought to be the superior measure of competitiveness."

DAYS = the number of different days on which games are played during the season.

D1 = a dummy variable used to take account of the construction of the Great Southern Stand at the MCG.

Substituting equation (2) into (1) yields the estimating equation:

InATTEND, = + p, In PRICE, + p2 In COMP,

13. This is consistent with the finding of other studies reported in Cairns et al. (1986). 14. The coefficient of variation was thought to be the best measure of overall competitiveness.

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+ p3 1nATTEND-, + p, In DAYS, + p5 D3 Where:

Po = constant, p, =Act,, pz = a o c 2 ,

p 3 = (1 -A ) p 4 = k 3 p 5 = k 4

(3)

The results for Victoria, using weighted least squares and data from 1948

Po = 1.412, 'pl = -0.115, p2 = -0.049

p3 = 0.816 p, = 0.189 & = -0.160

n = 46 R2 =0.918 DW = 1.901

Therefore h = 0.185, a1 =-0.622, az = -0.264 a3 = 1.025 a, = 0.866

The results for South Australia, again using weighted least squares, but data from 1948 to 1993 (t statistics in parenthesis).'e

Po = 6.005, p1 = -0.239, p2 = -0.103

p3 = 0.441

n = 45 Rz =0.890 DW = 2.064

h =-0.659 Therefore h = 0.589, a, =-0.405, az = -0.175

to 1994 (t statistics in ~arenthesis).'~

(2.5 17) (-3.039) (-1.027)

(1 3.688) (3.232) (-7.007)

(3.817) (-3.990) (-1.346)

(2.431)

The models were also estimated for various sub-periods but with so few observations very little could be made of these results.

The competitiveness coefficients are negative (although insignificant in Victoria and significant only at the 20% level in South Australia). The insignificance of this variable in Victoria may be attributed to the chance correlation between COMP and DAYS (if DAYSis excluded COMP becomes significant).

15. Following Borland (1987), weighted least squares, and not ordinary least squares, was

16. The competitiveness index used for the SANFL needs similar qualifications to those men- used to avoid the heteroskedastic component in the error term.

tioned in section V. DAYS and D1 did not apply in South Australia.

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TABLE 1 OWN PRICE EwsTlclllES

Short Run Long Run

Victoria 4 . 1 1 5 -0.622 South Australia -0.239 -0.405

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