User:Cronin.patrick/The Superstar Effect

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Superstars have a much wider impact than only the change in performance caused by the presence of a superstar. In the NBA, superstars lead to higher attendance at games in addition to higher television ratings for games in which a superstar plays. This leads to an increase in revenue for both  the team which the superstar plays for, and the opposing team.

The Effect of Superstars on Game Attendance: Evidence From the NBA, a research paper written by Brad Humphreys and Candon Johnson, utilizes data collected on game attendance from the 1981 season through the 2013-2014 season to analyze the effect which superstar players in the NBA have on attendance. The study shows a significant effect on game attendance and television ratings in the NBA when a superstar is playing. The results indicate that several superstar players lead to a significant increase in attendance at both home and away games. These players include LeBron James, Dwight Howard, Shaquille O’Neal, and Michael Jordan, who had the largest impact with nearly 5000 additional fans at home games, and over 4200 at away games. The findings of another research paper titled Stars at the Gate: The Impact of Star Power on NBA Gate Revenues, further support this conclusion. The paper highlights that star power increases the demand which fans have for the NBA. It also points out that to truly measure the impact which the superstar effect has on revenues, the impact on away attendance must be measured as well. This supports the conclusion reached by Humphreys and Johnson.

Superstars in the National Basketball Association: Economic Value and Policy, a research paper written by Jerry Hausman and Gregory Leonard, analyzes television ratings, merchandise sales and game attendance to determine the economic value of superstars in the NBA. The study determines that Michael Jordan was worth over $50 million to other teams in the NBA. In addition to Jordan, superstars such as Magic Johnson and Larry Bird also had a large impact on attendance in games which they played. The final results of the study determine that when a superstar plays in a game, this creates positive externalities for the opposing team. This is due to the team receiving benefits which they are not paying for.

Examples of the effect which superstars have on attendance and television ratings are not limited to the NBA. Another prevalent example is within the PGA Tour. The research paper Superstars, Uncertainty of Outcome, and PGA Tour Television Ratings, finds that ratings for the PGA Tour are driven primarily by stars. This is more clearly shown using the 2014 US Open as an example. Martin Kaymer dominated the tournament, however television ratings were shockingly low. The study compares this to Tiger Woods dominant win at the 2000 US Open, where he was victorious by 15 strokes. Although it was evident that Woods would win the tournament, ratings were much higher than they were in 2014. This shows the presence of a superstar effect in golf, especially when Tiger Woods is competing. In the conducted research variables indicating the presence of Tiger Woods and Phil Mickelson were statistically significant, whereas variables showing how much the leader is ahead, and the total number of competitors was not significant, further showing that stars are the true driving factor for ratings on the PGA Tour.

Berri, David J., Martin B. Schmidt, and Stacey L. Brook. “Stars at the Gate.” Journal of Sports Economics 5, no. 1 (2004): 33–50.