Jim Pagels, Economics Research Assistant, Johns Hopkins University
Abstract: In an age where live events are the only television programs that can garner collective mass audiences anymore, media rights deals in the four major sports (NBA, MLB, NHL, and NFL) continue to escalate by huge rates every time they are up for renewal. However, games frequently overlap with each other on the calendar. It is often discussed how NFL games allegedly crush ratings for the World Series or NBA playoff games devour the audience for their NHL playoff counterparts. If ratings are so critical to bottom lines and competition does in fact hurt ratings, though, why then do so many sports willingly overlap while other parts of the calendar are left empty? In an industry where teams hire armies of statisticians, coaches, trainers, and scouts to claw at every last inch of competitive edge and where leagues squeeze out every last drop of revenue, one would think someone would notice if that were the case—or does programming competition from other sports simply have little effect on ratings? This paper attempts to isolate the effects of overlap from each sport, examine how that competition affects viewership in each league, and quantify the value lost due to that overlap. We find that competition can have very damaging effects on TV viewership for every sport, most notably the NHL, and these losses can significantly diminish the value of programming rights. In most cases, this overlap is entirely avoidable with some relatively unobtrusive season calendar shifts.