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When Is the Honeymoon Over? National Hockey League Attendance, 1970­2003

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  • John C. Leadley
  • Zenon X. Zygmont
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    Abstract

    This paper uses a Tobit analysis to test for the presence of a honeymoon effect for National Hockey League (NHL) arenas using pooled cross-section time series samples from 1970 to 2003. No previous NHL attendance demand or attendance-related study has tested for such an effect. We estimate that the opening of a new arena increases attendance demand 15 to 20 percent in the first years of operation, and that the honeymoon is over after five years. This is similar in magnitude and duration to the previously estimated effects for new facilities for Major League Baseball and National Basketball Association teams. For the period 1994­2003, when 21 new arenas were constructed, the honeymoon lengthened to eight years. Because many NHL arenas are subsidized, the honeymoon effect has public policy implications if revenue projections for a new arena overestimate the initial effect or ignore the decline over time.

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    Bibliographic Info

    Article provided by University of Toronto Press in its journal Canadian Public Policy.

    Volume (Year): 32 (2006)
    Issue (Month): 2 (June)
    Pages: 213-232

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    Handle: RePEc:cpp:issued:v:32:y:2006:i:2:p:213-232

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    1. Jones, J C H & Ferguson, D G, 1988. "Location and Survival in the National Hockey League," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 36(4), pages 443-57, June.
    2. Dennis W. Carlton & Alan S. Frankel & Elisabeth M. Landes, 2004. "The Control of Externalities in Sports Leagues: An Analysis of Restrictions in the National Hockey League," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 112(S1), pages S268-S288, February.
    3. Angelo Cocco & J. C. H. Jones, 1997. "On going south: the economics of survival and relocation of small market NHL franchises in Canada," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 29(11), pages 1537-1552.
    4. Dennis Coates & Brad R. Humphreys, 1999. "The growth effects of sport franchises, stadia, and arenas," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(4), pages 601-624.
    5. McDonald, John F & Moffitt, Robert A, 1980. "The Uses of Tobit Analysis," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 318-21, May.
    6. Whitney, James D, 1988. "Winning Games versus Winning Championships: The Economics of Fan Interest and Team Performance," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 26(4), pages 703-24, October.
    7. Daniel, Rascher, 1999. "A Test of the Optimal Positive Production Network Externality in Major League Baseball," MPRA Paper 25832, University Library of Munich, Germany.
    8. Leo Kahane & Stephen Shmanske, 1997. "Team roster turnover and attendance in major league baseball," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 29(4), pages 425-431.
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    Cited by:
    1. Sung Il Hong & Michael Mondello & Dennis Coates, 2011. "An Examination of the Effects of the Recent Economic Crisis on Major League Baseball (MLB) Attendance Demand," Working Papers, International Association of Sports Economists;North American Association of Sports Economists 1123, International Association of Sports Economists;North American Association of Sports Economists.

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