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"BOK Appeal": Will the BOK Center Really Help Attendance in Tulsa?

Reading through the relatively positive press from the mainstream media in Tulsa regarding the Detroit Shock’s recently announced relocation, one thing that stood out was the attention given to the relatively new BOK Center, where the "Shock" will play.

Tulsa World: Arena dates available
The BOK Center has been a hit in its first year in Tulsa and has become one of the top concert venues in the country. Don't expect that to change with the arrival of the WNBA team. The WNBA team will play in the summer and try to get many of its 17 home games on the weekend, said Jerry Goldman, the arena's assistant general manager.

Certainly the presence of a state-of-art facility is a strong marketing tool for any city seeking to secure a professional sports team and the BOK Center appears to be quite impressive.

But how impressive? Impressive enough to actually help with its newest tenant’s attendance?

While a few commentators have alluded to the "BOK appeal", Jimmie Tramel of the Tulsa World explicit articulated the value of the BOK Center to the new team’s attendance.

Tulsa World: Six reasons why WNBA will succeed
3, BOK appeal. No matter what the event is, people will go to the BOK Center because the new arena is just that cool. People showed up for a Journey concert at the BOK Center even though the replacement singer was a Steve Perry-soundalike the band discovered on YouTube. People would go to the BOK Center to watch the Captain without Tennille or the Tennessee Three without Johnny Cash. Odds are people will gravitate to the BOK Center to watch a different Tennessee Three — Candace Parker, Tamika Catchings and Alexis Hornbuckle.

Although Tramel’s argument about the BOK appeal seems plausible (if not slightly facetious), it’s also reasonable to wonder whether that is actually true: do arenas – particularly newer arenas – have any effect on professional sports attendance?

The answer is generally "yes" (to different degrees across the major professional sports), but the increase in attendance is best described as a "novelty effect" based on the studies from sports economists.

While a "novelty effect" results in short-term attendance gains for an established team, it would presumably be negligible for a "novel" team and do very little for attendance in the long-term.

In other words, although having a state-of-the-art arena is valuable to draw a professional franchise to a city, it probably has little to do with a franchise’s capacity to build a fan base. Nevertheless, the literature on the effects of new arenas is actually quite interesting to dig into.

What is the Novelty Effect?

Prof. Craig A. Depken best describes the novelty effect in his article, "New Stadiums and Concession Prices in Professional Football and Baseball."

The majority of [studies that focus on the team that plays in the new arena] investigate the so-called "novelty effect" or changes to attendance attributed to the new stadium itself, in addition to or despite the quality of the team. (p. 1)

In their article, "When is the Honeymoon Over?", John C. Leadley and Zenon X. Zygmont present a more precise definition that better represents what the studies about the novelty effect usually do: examine the relationship between the age of the arena and attendance over time.

The honeymoon effect represents the relationship between spectator attendance at a professional sporting event and the age of the sports facility at which the event is held. Opening a new stadium or arena may result in an initial surge in attendance, but in time, the novelty of the new facility fades and attendance begins to decline.

In other words, what we know about new arenas is that they provide an initial boost that tapers off over the course of a decade in pretty much any sport. So there is some merit to Tramel’s notion that a new arena does attract fans.

However, a new team in a city previously without a team won’t experience a "boost" as the result of a novelty effect – there is no prior attendance record to get a boost from. But that does not necessarily invalidate the original argument – one could still argue that the presence of a new facility could hypothetically generate greater attendance than an older facility would.

There is no way to test that in this case – unless we can find an alternate universe in which the Detroit Shock moved to an aging facility in Tulsa – but we can still explore the argument using the studies done.

A line from the conclusion of an article on the subject by Dennis Coates and Brad R. Humphreys summarizes the problem with claiming that a new arena might help the WNBA.

…we find mixed evidence about the effect of fan loyalty, as measured by the number of years a franchise has been in a particular city, on average attendance.

Since the WNBA is still a niche league to some extent and the loyalty of fans in Tulsa is obviously unknown, it’s really difficult to determine anything about the effect of a new facility on the Shock’s attendance.

Nevertheless, some of the data from these studies is quite interesting.

How do new facilities influence professional sports franchises?

Most of the studies on the effect of new arenas on sports teams have studied the National Basketball Association, National Football League, and Major League Baseball. While it might be tempting to assume a similar effect on the NBA and WNBA, it might not be that simple.

It’s possible that the number of home games played in a facility influences the novelty effect (e.g. there are only 8 home games in an NFL franchise meaning the demand for the games is higher independent of new arenas), as well as the capacity to "sell out" (increases demand) and perhaps even seasonal effects (the MLB is outdoors in the summer, the NBA is indoors in the winter/spring).

So as a summer sport with relatively few home games (17) in a niche league, it’s hard to even apply the findings from other leagues to the WNBA, although it obviously shares the most features with the NBA.

If we are to assume that the NBA is the closest counterpart to the WNBA, then it would be fair to say that the newness of the BOK center will not make much difference on Tulsa’s team. Coates & Humphreys summarize the novelty effect across sports as follows.

[The novelty effect of new facilities over the first 10 seasons] is positive and significant in all three professional sports, suggesting that new sports facilities increase attendance holding constant on-field success, market size, and other factors. The novelty effect is largest in MLB, an increase in average attendance of about 11% per year in each season over the 10 season period, somewhat smaller in the NFL, an 8% increase, and smallest in the NBA, about a 4% increase.

The studies have found pretty consistently that in the NBA, the novelty effect persists through four or five seasons and then declines sharply. Given that the NBA draws better than the WNBA to begin with and only had a 4% increase, it’s difficult to imagine a WNBA team ever getting a major boost from a new facility.

What do the studies mean for the "Shock"?

Although there might not be a novelty effect from the BOK Center in Tulsa, one thing that stands out from the Coates & Huphreys article is that there might not be much value to being the only professional franchise in town.

The variable "# Other Franchises" is the number of other professional teams in each city. This variable reflects the scope of alternative sporting events attendees have to choose from in each city in the sample in each year. The point estimates on this variable are statistically different from zero at the 5% level only in MLB, although the P-values indicate significance at the 10% level in the NBA. The signs of these variables suggest that other sports are substitutes for professional baseball and, to a lesser extent, professional basketball in cities. Each additional competing professional sports franchise reduces average attendance at MLB games by about 1,800. (p 10)

If the "other franchises" effect is only 1,800 in baseball – which on average draws about 30,000 people per game – it’s highly unlikely that it will have an effect on the WNBA.

Ultimately, Coates & Humphries suggest that fan loyalty might matter more than a new arena, but it’s a construct that is so hard to measure – made even weaker by the relatively short existence of WNBA fans – that it’s hard to make claims about it.

However, building on the aforementioned studies, a potential claim worth examination is as follows: fan loyalty is influenced by the quality of the experience in a facility, including parking and proximity to major transportation routes. As such, a new facility in an accessible location would benefit a team. The question for the WNBA is how much?

The bottom line is that the level of attendance in Tulsa is going to depend more on the strength of the product on the floor and their ability to market the team over the coming months. It will be most interesting to compare their effort to that of some of the more recent WNBA cities.

Transition Points:

One of the most interesting findings from these studies had to do with the arguments in favor of building new arenas for the sake of economic impact, as described by Coates & Humphries:

Despite the repeated claims to the contrary by proponents of public subsidies for professional sports facilities, there is no evidence that professional sports teams or franchises have a positive economic impact on the surrounding communities, and some evidence suggests that they have a detrimental effect. (p 16)
The reason? The novelty effect. There seems to be agreement among sports economists that public financing of a stadium is a bad idea because the arena stops paying for itself once that novelty effect wears off.

Our results suggest that the novelty impact of new facilities on average attendance occurs over a much shorter period of time, as little as four to ten seasons. Financing a new facility over two or three decades that increases attendance for only five to ten years makes little sense in economic terms unless revenues from the years of boosted attendance exceed in present value terms the financing costs, and those revenues are banked to cover those future costs. Given the relatively short duration of the novelty effect on attendance, alternative financing methods should be explored in the future.

But the obvious thing Tulsa has going for it is the Shock’s success from the previous season(s) – according to Leadley & Zygmont, a team’s winning percentage from the previous season has a significant positive effect on attendance. Would be interesting to know how much that influences a relocation.