When Going in Circles is Going Backward: Outcome Uncertainty in NASCAR

Abstract

Using data from the 2007, 2008, and 2009 National Association for Stock Car Auto Racing (NASCAR) seasons, this article shows that the uncertainty of outcome hypothesis pertains to both race attendance and television audience, with the former only responding to season-level uncertainty and the latter responding to both race-level and season-level uncertainties. Counter to conventional wisdom, the price of gasoline and unemployment were unrelated to the reported level of attendance. Furthermore, NASCAR broadcasts lose audience when competing against other high-interest sporting events and declines in both television ratings and audience size during the NASCAR season were not unique to 2009. Overall, the empirical evidence suggests that declining competitive balance might have been the common factor that reduced both television audiences and race attendance during this period.

Analysis of the NCAA Men’s Final Four TV audience

“…Feddersen and Rott (2011) include friendlies in the data, added progression through tournament play as factors in the model, and from a TV business prospective obtain an estimate of the reduction in viewing when the game is broadcast by a private instead of a public network. Berkowitz, Depken and Wilson (2011) find that the NASCAR season differs from other sports by having TV ratings that peak with the season-opening Daytona 500 and then decrease through the season, but competitiveness toward in the Chase for the Cup races can increase ratings. Tainsky and McEvoy (2012) focused attention on TV markets that do not have an NFL team in research that is valuable to local affiliates who have some input in which games to broadcast, and, in addition to effects found in previous research, find an effect for the closest team to the market (indicating a local sport fan effect) and an effect for games involving the Cowboys and Patriots (indicating a few brands may have national appeal).…”

Outcome Uncertainty, the Superstar Effect, Talent and Live Attendance in Professional Boxing

“…Focusing on the impact of a poor public image in cycling, Reeth (2013) found that the release of news of doping by competitors had a negative impact on tv demand. In NASCAR, tv viewers were found to favor both short-run and long-run UOO in a study by Berkowitz, Depken II & Wilson (2011). In a measure designed to estimate the determinants of pay in professional boxing, rather than attendance, Chaplin (2012a) found SP to have a significant impact on the guaranteed purses boxers earn.…”

The Uncertainty-of-Outcome Hypothesis and the Industrial Organization of Sports Leagues

“…For surveys of this literature, see Berkowitz, Depken, andWilson (2011), Krautmann, Lee, andQuinn (2011), and references cited therein. While the results are somewhat mixed, these studies generally support the UOH.…”