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Should NFL blackouts be banned?

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  • William Putsis
  • Subrata Sen

Abstract

In this paper, the authors examine the economic and policy implications of the National Football League (NFL) 'blackout rule,' a league rule that prohibits local television broadcast of games that are not sold out at least 72 hours prior to game time. The foundation for understanding and assessing the impact of the blackout rule is an analysis of attendance using data on games during the 1996-1997 National Football League season. Expanding on previous research, three separate components of attendance (season ticket sales, game day ticket sales, and game day noshows) are examined in detail. Accounting for the endogeneity of key variables, Tobit and Probit analyses are used to estimate and predict individual game attendance. These empirical estimates are then used as a vehicle to assess the implications of game day blackouts and the potential for public policy intervention. More specifically, the authors begin by estimating the impact of the blackout on game day attendance. Using these estimates, they assess the implications of imposing a local blackout for individual team revenues. The gain in on-site stadium revenue due to the blackout (e.g., through additional ticket and concession sales) are then viewed in the broader context of the societal loss due to the game not being broadcast in the local area. The empirical results suggest that the gain in team revenue is small in comparison to the loss of viewership rights. This suggests that public policy intervention may be possible that would result in a Pareto superior market outcome. The paper concludes by exploring possible intervention strategies.

Suggested Citation

  • William Putsis & Subrata Sen, 2000. "Should NFL blackouts be banned?," Applied Economics, Taylor & Francis Journals, vol. 32(12), pages 1495-1507.
  • Handle: RePEc:taf:applec:v:32:y:2000:i:12:p:1495-1507
    DOI: 10.1080/000368400418907
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    References listed on IDEAS

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    1. Alfred E. Kahn, 1988. "The Economics of Regulation: Principles and Institutions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610523, September.
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    Cited by:

    1. Kevin Alavy & Alison Gaskell & Stephanie Leach & Stefan Szymanski, 2010. "On the Edge of Your Seat: Demand for Football on Television and the Uncertainty of Outcome Hypothesis," International Journal of Sport Finance, Fitness Information Technology, vol. 5(2), pages 75-95, May.
    2. Dominik Schreyer & Sascha L. Schmidt & Benno Torgler, 2018. "Predicting season ticket holder loyalty using geographical information," Applied Economics Letters, Taylor & Francis Journals, vol. 25(4), pages 272-277, February.
    3. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    4. Budzinski, Oliver & Feddersen, Arne, 2015. "Grundlagen der Sportnachfrage: Theorie und Empirie der Einflussfaktoren auf die Zuschauernachfrage," Ilmenau Economics Discussion Papers 94, Ilmenau University of Technology, Institute of Economics.
    5. Babatunde Buraimo, 2008. "Stadium attendance and television audience demand in English league football," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(6), pages 513-523.
    6. Mongeon, Kevin & Winfree, Jason, 2012. "Comparison of television and gate demand in the National Basketball Association," Sport Management Review, Elsevier, vol. 15(1), pages 72-79.

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