The effects of overseas exhibition games on consumer interest: the case of the English Premier League

Abstract

ABSTRACTResearch question This paper attempts to disentangle the impact of overseas exhibition games, a strategic marketing tool frequently implemented by professional sports clubs in their endeavors to expand into foreign markets, on demand. As such, it contributes to the recently growing literature examining the internationalization processes of leagues and clubs.Research methods We implement two different studies. Study 1 analyzes the effects of games played by English Premier League (EPL) clubs in the US in summer 2015 on US residents’ willingness to pay (WTP) for add-on football packages on television. In doing so, we exploit the panel structure of geocoded data collected in two representative surveys and use inverse-probability-weighted regression adjustment estimators. Study 2 focuses on regional audience data on EPL games televised in the US. We account both for summer 2014 and 2015 exhibition games by implementing propensity score stratification.Results and findings Overall, we find that exhibition games played by EPL clubs have a positive effect on both the WTP for TV subscription packages as well as viewership. Further analysis reveals that these effects are primarily driven by top brands traveling abroad (though also some spillover benefits on EPL-wide demand emerge) and dissipate over time.Implications Facilitating the organization of overseas exhibition games seems reasonable from a commercial point of view for league management. For broadcasters, requiring certain top brands to participate in preseason tours in their national markets might be essential if they seek to improve their return on investment.KEYWORDS: Event marketingpreseason toursfriendliesinternationalizationtelevision demand AcknowledgementAn earlier version of this paper was presented at the 42nd ISMS Marketing Science Conference (2020), the Reading Online Sport Economics Seminar (2021) and the 12th ESEA Conference on Sport Economics (2021). We thank the participants as well as Dominik Papies and Joerg Koenigstorfer for their valuable comments and suggestions.Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 There is no general pattern on how clubs decide to locate exhibition games. Some clubs may visit a region several years consecutively, while others alternate between Asia, the US and Oceania. Typically, the decision hinges (amongst others) on the financial offers extended by preseason tour hosts/organizers.2 Manchester United earned £11.3 million in the 2018 preseason tour excluding any related sponsorship revenue (see Manchester United, Citation2019).3 The highest crowd ever reported for a football game in the US was at the Manchester United vs. Real Madrid friendly game on 29 July 2014 (109,318 fans).4 In detail: Survey 1 took place between 15 and 26 May 2015. Survey 2 took place between 31 August and 11 September 2015. A screen-out question about general interest in football in both surveys ensured that participants were (at least slightly) interested in football. The aim was to distinguish between individuals exercising and/or consuming the sport and those completely unacquainted with it. For a detailed description of the survey design, data quality, and representativeness of the samples see Nalbantis and Pawlowski (Citation2016, Citation2019).5 This range seems plausible as NBA game access via a basic entertainment plan costs around $100/month. Note, our main findings remain when using unwinsorized WTP (results are available upon request).6 Charleston, SC was a diary-only market during the study period. Therefore, we focus on 22 (instead of 23) exhibition game hosting DMAs.7 The cost-per-mille (CPM) varies per DMA, network and time of broadcast. The estimated median CPM for broadcast TV (excluding primetime) is $20 for a 30-second advertisement (Solomon Partners, Citation2022). EPL broadcasts include on average around 10 minutes of commercials (FiveThirtyEight, Citation2020).8 The percentages of the effects are calculated by exponentiating the ATT coefficients presented in Table 9.Additional informationFundingThe authors gratefully acknowledge that data collection in Study 1 was co-funded with a FIFA/CIES João Havelange Scholarship. The funders had no role in the design of this study, data collection, analysis and interpretation of the data. The authors are solely responsible for remaining omissions and errors.