Is the League of Ireland Under supported? Evidence from a European Perspective* Raymond Bachan and Barry Reilly

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1 IstheLeagueofIrelandUndersupported? EvidencefromaEuropeanPerspective* RaymondBachanandBarryReilly Authors Affiliation: Bachan:BrightonBusinessSchool,UniversityofBrighton,Brighton,BN24AT Reilly: Department of Economics, School of Business, Management & Economics, Jubilee Building,UniversityofSussex,Brighton,BN19SL,UK. Abstract Thisstudyusesdatafrom48Europeantopflightsoccerleaguesover16recentseasonsto examine,interalia,theimpactofcompetitivebalanceandleaguequalityonattendance.the empiricalapproachpermitsaninvestigationofwhethertheleagueofirelandfareslesswell thanitshouldintermsofattendance.wefindnopersuasiveevidencethattheleagueof Irelandisundersupported. Keywords:SoccerCompetitiveBalanceQualityDemand JELClassification:D12;L83 WordCount:2,562 ThisDraft:December2015 0

2 INTRODUCTION ThelessfashionablesoccerleaguesofEuropeendureacontinualstruggletosurvivewhen operatingintheshadowofmoreprestigiousneighbours.theleagueofirelandprovidesan exampleofonesuchleague.theannualrevenuesgeneratedbythe20teamsintheleague s toptwotierswasestimatedtobeabout 10millioninthe2014season. 1 Incontrast,the neighbouring English Premier League generated 3.3 billion in revenues in the 2013/14 season,whileoverthesameperiodinthesecondtierinenglandturnoverwasabout 0.5 billion. 2 AdvocatesfortheLeagueofIrelandcontinuallyexpressirritationattheextenttowhichIrish soccer fans shirk from supporting domestic clubs in favour of mostly English ones.a VisitBritainSurveyconductedin2011foundthatoutof767,000touristtripstoBritainthat includedattendingafootballmatch,thelargestsinglegroup,comprisingaboutonefifthof thetotal,wasfromireland.afurtherreflectionofirishsupportforanenglishpremiership clubwasprovidedbyafriendlyfixturein2014whentopdublinclubshamrockrovershosted aliverpoolreserveside.thegameattracted42,000spectators,mostofwhomwereirish based Liverpool supporters. 3 The attendance was about 27 times the League of Ireland PremierDivisionaverageforthe2014season. Anumberofreformshavebeenintroducedinrecentyearstostimulatespectatorinterestin thedomesticgame,themostsignificantofwhichwastheintroductionofsummersoccerin 2003.The Football Association of Ireland (FAI) commissioned a White Paper in 2005, subsequentlyknownasthegenesisreport,tooutlineafuturestrategicdirectionforthe gameinireland.itendorsedtheproposedmergerofthefaiandtheleague,andsuggested thecreationofa10teamelitedivisionwithasimilarnumberofteamscompetinginasecond 1

3 tier.althoughtheanticipatedmergeroccurredin2007,thesuggestedleaguerestructuring nevermaterialized. TheaverageannualattendancefigurefortheLeagueofIrelandPremierdivisionoverthelast 16yearshasbeenabout1,750.Akeythemethatrunsthroughtheargumentsofthose defending the domestic league is that it underperforms in terms of attendance, and its qualityjustifieshigherspectatornumbers.thiswastheimplicitviewofthegenesisreport, which suggested a minimum average attendance of 3,120 for the Premier Division as a feasibleobjectiveby2010.thiswasneverachievedandtheleaguehasrarelyachieved50% ofthistargetinthefiveseasonssince. TworesearchquestionsthatemergefromtheforegoingiswhethertheLeagueofIrelandis undersupportedrelativetocomparableleaguesandwhetherthetypeofattendancetargets suggestedinthegenesisreportwereactuallyfeasibleorevensensible.thesetworesearch questionsareinterrogatedusingdatafrom48europeanleaguesoveraprotractedperiodof timeandsituatingtheirishperformancewithinthisbroadercontinentalcontext. Thestructureofthepaperisnowoutlined.Thenextsectiondescribesthedatausedand outlinestheempiricalmethodology.thisisfollowedbyasubsequentsectiondescribingthe results.afinaloneofferssomeconcludingremarks. 2

4 DATA&EMPIRICALMETHODOLOGY The data comprise a panel of 48 countries affiliated to the Union of European Football Associations(UEFA)andspana16yearperiodfrom2000to Theanalysisexploitsdata averaged over this period with the country providing the unit of observation.the key dependentvariableisthelogattendanceinacountry stoptieraveragedoverthenumberof years for which thesedata are available over this period.four explanatory variables are includedtocapture:marketsize(countrypopulation);economicactivity(theunemployment rate); the league s competitive balance (computed using the Herfindahl index 5 ); and the quality of the league (based on UEFA s league coefficient).the full set of variables are describedandsummarizedintable1. TABLE1ABOUTHERE Theregressionmodelisexpressedasfollows: Ln(ATTEND) i= 0+ 1UR i+ 2ln(POP) i+ 3HICB i+ 4COEF i+ i [1] wherei=1, 48and iisanerrorterm. ThemodelisestimatedusingtheOLStechnique,soestimationiseffectivelyconductedusing abetweenestimator. 6 Theexpressioninequation[1]assumesthatcompetitivebalance(and quality)influenceattendance.thus,weignoreissuesonthedirectionofcausalitybetween attendanceandcompetitivebalance,astheevidenceonthisremainsambiguous. 7 However, wetaketheviewthattheestimationof[1]providesausefulframeworkwithinwhichourkey researchquestionsrelatingtotheleagueofirelandcanbeinvestigated. 3

5 EMPIRICALRESULTS Table2reportstheOLSestimatesforspecification[1].Theequationfitsthedataexceptionally wellasevidencedbythehighadjustedrsquared.inaddition,theregressionmodelisalso foundtobefreeofheteroscedasticity.thepointestimatesaregenerallywelldeterminedand consistentwithpriorintuition.acountry spopulationisfoundtoexertapositiveeffecton average attendance, while the unemployment rate impacts it negatively. 8 The estimated effectfortheherfindahlindexconfirmsaninverserelationshipbetweencompetitivebalance andattendance.theestimatesuggeststhataonepointimprovementincompetitivebalance isassociatedwithanincreaseinaverageattendanceof8.1%,ceterisparibus.theplaying standardoftheleague,asproxiedbytheuefaleaguecoefficient,alsoexhibitsapositive effectwithaonepointriseyieldinga15.4%increaseinaverageattendance. TABLE2ABOUTHERE Thekurtosis(andnormality)diagnostictestsrevealevidenceofoutliers,andthisisconfirmed bytheboxplotoftheregressionequation sresiduals(seefigure1).thetworesidualsthat featureasoutliersinthisfigurearethescottishpremiershipleague(apositiveresidual)and thewelshpremierleague(anegativeresidual).inordertoaddressthisissueweincludean impulse dummy for each of these two observations, which nets out (or excludes) their empiricalcontributiontotheanalysis.inaddition,wealsoincludeanimpulsedummyforthe LeagueofIrelandtoinformourprimaryresearchquestion.Themagnitudeoftheimpulse dummy coefficient provides an estimate of the prediction error for the observation in question.the corresponding tratio is the studentized residual with a significant tratio indicatingtheobservationasanoutlier. 4

6 TheinclusionoftheimpulsedummiesfortheScottishandWelshobservationsresolvesthe normalityproblembutdoesnotmateriallyalterthereportedestimatesforthesetofincluded covariates.the studentized residuals in both these cases are found to be statistically significant.inparticular,theresidualforthescottishpremierleague(spl),whichisabout 3.4standarderrorsabovetheregression line,suggestssupportforthespliswellabove whatwouldbeexpectedgiventhecountry spopulation,economicconditions,andthequality andcompetitivenessoftheleague. 9 ThereverseisthecasefortheWelshPremierLeague.In particular, its average attendance is about 82% lower than predicted using the covariate realisationsforwales. Thesecondcolumnoftable2alsoincludesanimpulsedummyfortheLeagueofIrelandand thetratiosuggeststhattheleagueisonlyabouthalfastandarderrorbelowtheregression line. Therefore, although the negative sign suggests that attendances should be slightly higherthantheactual,themagnitudeofthegapisnotfoundtobestatisticallydifferentfrom zero.therefore,theaverageattendanceintheleagueofirelandoverthelast16yearsis broadly consistent with what would be anticipated given the values of the included characteristics.thus,thereisnopersuasiveevidencetosuggestthattheleagueisunder performingintermsofattendance. Asnotedearlier,theGenesisReportsetaminimalaverageattendancetargetof3,120,which wasviewedasachievablewithinashortperiodoftime.wenowexplorethefeasibilityofthis objective.insodoing,weholdpopulationandtheunemploymentrateconstantandfocus down on the two variables that the putative restructuring plans and policy initiatives of leagueadministratorscouldpotentiallyinfluence competitivebalanceandleaguequality. Specification[1]canbeusedtoexpressthetotalchangeinlogattendanceasfollows: 5

7 ln(attend) ln(attend) dln(attend)= dcoef+ dhicb [2] COEF HICB UsingtherelevantOLScoefficientsfromcolumnoneoftable2,theempiricalestimatesfor thepartialderivativesaregivenby: ln(attend) ln(attend) =0.1544and = COEF HICB ThechangeinthelogattendanceenvisagedbytheGenesisReportwasapproximately0.5740, whichrepresentsjustunderadoublingofattendancerelativetotheleague s16yearaverage. WhatchangesintheUEFAcoefficientandtheleague scompetitivebalancearerequiredto achievethistarget?inansweringthisquestionweallowbothofthesefactorstoperforma roughlycomparableandconcurrentrolesinmeetingthespecifiedtarget.inordertomeet thestatedobjective,theleagueofireland suefacoefficientwouldhavetoincreaseby2.135 points, while the degree of competitive imbalance in the league, as measured by the Herfindahlindex,wouldhavetofallby0.03points. The foregoing requirements represent an extremely ambitious scenario.the League of Ireland saverageuefarankoverthese16yearswasalowly38 th.theincreasewouldrequire theleaguetoimproveitsrankingby15placesto23 rd.overtheperiodcoveredbyourdata, theleaguehasneverbeenrankedhigherthan33 rd.theaverageherfindahlindexvaluefor theleagueoverthisperiodwas1.117.theimprovementincompetitivebalancerequiredto meetthetargetsuggestsanindexvalueofjustunder1.09,alevelrarelyachievedbythe leagueoverthelast16seasons. 10 Therefore,itisnotobviousthattheambitiousattendance targetcontainedwithinthegenesisreportwaseitherfeasibleorsensible. 6

8 CONCLUDINGCOMMENTSANDREMARKS ThereisgeneralagreementthattheLeagueofIrelandoperatesinaverychallengingand difficultmarketenvironment.inadditiontothedirectcompetitionfromthepremierleagues ofenglandandscotland,italsofacesdomesticcompetitionforspectatorsfromotherpopular team sports within the country, primarily professional rugby and the Gaelic Athletic Association(GAA)amateurcodesofhurlingandfootball.AdvocatesoftheLeagueofIreland maypuzzleastowhyitfailstoattractbettersupport,butalackofcompetitivebalanceand itspoorqualityaretwoimplicatedculprits.wefindnopersuasiveempiricalevidencethat theleagueofirelandisundersupported.thelevelsappearappropriategivenbothitsquality anditscompetitiveness. TenyearsaftertheGenesisReport,themorerecentlypublishedConroyReportnowprovides atemplatetodelineateanewwayforwardfortheleagueofireland.itproposes(again), interalia,atenteamleagueforthe2017seasonwithasplitforafinalseriesofmatches involvingteamsinthetopsixpositions.fortunately,incontrasttoitsprogenitor,thelatest contributiontothedebateresistedanytemptationtospecifyattendancetargets.forsure, the proposed reduction in the number of teams within the league is likely to improve competitivebalance.thismayeventuateinagreaterconcentrationoftheleague splaying talentamongasmallernumberofclubs.thismayalsoenhanceaveragefixturequalityand theoverallstandardofplayintheleague. 11 Thecurrentstudysuggeststhatameliorating competitivebalancemaybeonemechanismthroughwhichattendancelevelsareenhanced. However,improvementsincompetitivebalancearelikelytoyieldonlyverymodestincreases inattendance. 7

9 TheempiricalanalysisreportedheresuggeststhatlongsufferingLeagueofIrelandsupporters shouldperhapsspareathoughtfortheirevenmorebeleagueredwelshcounterparts.since itsinceptionin1992,thefootballleagueinwaleshasfacedaperennialstruggletoattract spectators.theaverageattendanceinthetoptierintheprincipalityinthethreemostrecent seasonswas311.theaverageattendanceforthesecondtieroftheleagueofirelandover thesameperiodwasabout50%higher. 12 OurestimatessuggeststhattheWelshPremier Leaguepuncheswellbelowitsweightintermsofattendanceandshouldbesecuringaverage figuresthatareatleasttwice(ifnotmorethan)theirexistinglevels.however,theleagueis caughtuncomfortablybetweenthepopularityofrugby,ontheonehand,andapairofwelsh soccerclubs,ontheother,thatnotonlycurrentlycompeteinthetoptwotiersinenglandbut arelocatedwithinageographicalareawherenineofthewelshleague s12teamsarebased. 13 LeagueofIrelandsupportersshouldatleastbegratefulforthesmallmercyprovidedbythe IrishSeaandthefrictionitintroducesininhibitingevengreaterflowsofIrishfootballfansto England. 8

10 ENDNOTES 1.ThisisbasedoncalculationsprovidedintheConroyReport(2015). 2.SeeDeloitte(2014)formoredetails. 3.LeagueofIrelandsupportersappeartoreservemuchoftheirodiumfortheIrishfansof EnglishPremiershipclubs.Theattendanceatthisparticularfixturepromptedafairlyheated debateonanationallytelevisedprogrammewithformerleagueofirelandplayerandclub managerdermotkeelyusingapejorativetermtodescribethe42,000irishbasedliverpool supporters. 4.The48leaguesthatfeatureinthisanalysisincludeallUEFAaffiliatedcountrieswiththe exceptionofandorra,thefaroeislands,gibraltar,lichtenstein,maltaandsanmarino.in addition,thepanelforthe48countriesisstronglyratherthanperfectlybalanced.thisisdue tomissingattendancedataforsomeoftheincludedcountries.however,attendancedatafor thefull16yearsareavailableforthemajorityofcountriesfeaturedintheanalysis. 5.SeeOwen(2014)foradescriptionanddiscussionoftheHerfindahlindex. 6. We also attempted to exploit a countryspecific fixed effects estimator. However, the absenceofadequatevariationwithincountriesformeasuresrelatingtoleaguequalityand competitivebalancepreventedameaningfuluseofthisestimatorinthecurrentcontext. 7.Forinstance,Hall,SyzmanskiandZimbalist(2002),usingdatafromEnglishsoccer,report evidencethatcausalityrunsfromrevenuestoperformance.thefindingsofbrandesand Franck(2007),usingtimeseriesdataforanumberofEuropeanleagues,suggestthatcausality mayrunfromattendancetocompetitivebalanceforcertainleagues.however,theauthors arecircumspectintheconclusionsofferedonthisissue. 8.WeexperimentedwithusingreallogpercapitaGDPinsteadoftheunemploymentratebut theestimatedeffect,thoughpositive,waslesswelldeterminedthantheunemploymentrate registeringonlyaprobvalueof TheaboveaverageSPLestimateisheavilydriven,formanyoftheyearsthatfeatureinthe analysis, by the popularity of the old firm contests involving Glasgow s historical rivals RangersandCeltic. 10.Itisacknowledgedthattheestimatesusedherereflectaveragesover48leagues.Itmay wellbethecasetheyoverestimatetheresponsesinabsolutetermsforthespecificcaseof Irelandperhapsrenderingthetargetanevengreaterchallengetoachieve. 11.Reilly(2015),inastudyfocusingonmatchleveldemandintheLeagueofIreland,found strongevidenceoffixturequalitybeingakeydeterminantofspectatordemand. 12.SeeJenaandReilly(2015)forattendancefiguresfortheLeagueofIrelandsecondtier. 13. For example, football clubs like Colwyn Bay, Merthyr Town, Newport County and Wrexham also compete in different tiers of the English league. In addition, English PremiershipclubsbasedinLiverpoolandManchesterdrawsizeablesupportfromtheNorth 9

11 Walesarea,andexcellenttransportationnetworksallowmanyWelshfanstheopportunityto supportpremiershipteamsinevenmoregeographicallydistantpartsofengland. 10

12 REFERENCES Brandes, L. and E.Franck (2007). Who Made Who: An Empirical Analysis of Competitive BalanceinEuropeanSoccerLeagues,EasternEconomicJournal,Vol.33,No.3(Summer),pp Conroy Report (2015). SSE Airtricity League Consultation Process 2015 Report, Conroy ConsultingLtd.,Ireland. Deloitte(2014).AlltoPlayFor:FootballMoneyLeague,DeloitteSportsBusinessGroup. FootballAssociationofIreland(2005).WhitePaperontheStrategicDirectionoftheEircom League,GenesisStrategicManagementConsultants. Hall,S.,Syzmanski,S.andA.S.Zimbalist(2002).TestingCausalitybetweenTeamPerformance and Payroll The Case of Major League Baseball and English Soccer, Journal of Sports Economics,Vol.(May),pp Jena,F.andB.Reilly(2015).TestingtheUncertaintyOutcomeHypothesisusingDatafrom Second Tier Soccer in Ireland, Mimeo, Department of Economics, School of Business, Management&Economics,UniversityofSussex. Owen, D. (2014). Measurement of Competitive Balance and Uncertainty of Outcome in HandbookontheEconomicsofProfessionalFootball,editedbyJ.GoddardandP.Sloane, pp EdwardElgarPublishingLimited. Reilly,B.(2015).TheDemandforLeagueofIrelandFootball,EconomicandSocialReview,Vol. 46,No.4(Winter),pp

13 Table1:VariableDescription&SummaryStatistics Variable VariableDescription Mean ln(attend) Theaveragelogattendanceinthecountry stop league (1.2976) ln(pop) Theaveragelogofthepopulationofthecountry (1.3644) UR Theaverageunemploymentrateinthecountry (6.0656) COEF TheaverageUEFAcoefficientforthecountry s league (3.9679) HICB TheaverageHirfindahlindexforthecountry s league (0.0467) Notes:Thedataarecountryaveragesover16yearsandthesamplesizeis48;standarddeviationsare reportedinparentheses. 12

14 Table2:TheDeterminantsofAverageAttendanceinEuropeanLeagues Variables Constant UR Ln(POP) HICB COEF OLSEstimates *** (3.5195) * (0.0123) *** (0.0819) *** (2.3310) *** (0.0286) OLSEstimates *** (3.5195) * (0.0099) *** (0.0648) *** (1.4000) *** (0.0230) ImpulseDummies: SCOTTISHPREMIERLEAGUE *** (0.4801) WELSHPREMIERLEAGUE *** (0.4125) LEAGUEofIRELANDPREMIERDIVISION (0.4106) AdjustedR StandardErrorofRegression N DiagnosticTests: Probvalues Probvalues Heteroscedasticity Skewness Kurtosis Normality Notes:***,**and*denotestatisticalsignificanceatthe0.01,0.05and0.10levelusingtwotailedtests; denotesnotincludedinestimation. 13

15 Figure1:TheBoxplotofOLSResiduals Residuals Notes:TheOLSresidualsarefromtheestimatedequationreportedincolumnoneoftable2. 14