Watching others participate in sports and learning from them is called _____.

After COVID-19 shut down most professional sports leagues last year, fans have been eagerly returning to games and matches. But what will keep them coming back after the pandemic?

Leagues might assume that their star athletes and state-of-the-art stadiums are enough of a draw. However, research suggests that spectators also value something far simpler: the suspense of not knowing who will win.

In fact, stadiums sell more tickets when the outcome of a game is less predictable, says a study by Harvard Business School Professor Karim R. Lakhani and Patrick J. Ferguson, an assistant professor at the University of Melbourne. Put another way: the more evenly matched teams are on the field, the less certain the final game score, and the bigger fan interest.

Professional sports leagues around the world, major revenue generators for team communities during normal times, lost billions of dollars in 2020 amid pandemic closures. While Lakhani’s study focuses on Australian football, the principles apply to any league trying to re-engage fans and revitalize the businesses that depend on them.

“We’re talking about billion-dollar leagues that are cultural institutions in their communities,” says Lakhani, the Dorothy & Michael Hintze Professor of Business Administration. “A vibrant sports scene is the lifeblood of many cities.”

Take the suspense out of the game and you’ll lose spectators; no one—not even die-hard fans—wants to sit through a match where the result is a foregone inclusion. Ferguson and Lakhani decided to test this theory using data from the Australian Football League (AFL), the wildly popular sport also known as “footy.” They detailed their findings in the recent working paper Consuming Contests: Outcome Uncertainty and Spectator Demand for Contest-Based Entertainment.

Getting more people in seats

The researchers studied AFL game attendance, team line-ups, injuries, gambling trends, and performance data from 2013-2018. They found that when injuries and roster switch-ups make a win or loss seem more certain, fan interest drops off, citing attendance and wagering data.

In fact, just one standard deviation increase in injury-induced outcome uncertainty drove average attendance up 11 percent, the equivalent of adding 3,700 spectators.

“Aggregated across a full season’s worth of games, this amounts to an additional 750,000 spectators,” Ferguson says. “This is potentially worth tens of millions of dollars in additional revenue for the league.”

Unique aspects of the AFL, whose strict policies aim to keep player rosters evenly matched—made it a natural setting to examine this question. The AFL emphasizes competitive balance and the league enforces rules governing player drafts, free agency, revenue sharing, salary caps, and even ticket prices. Tickets must be sold at face value under league rules, eliminating the unauthorized sales of tickets at higher prices by third parties.

Other popular sports around the world also employ some of these policies, including the US National Football League’s salary cap. However, footy has a wider range that made it easier to isolate what economists call a specific “shock” or unexpected change—in this case, injuries, Ferguson says.

Gambling and controlling for loyalty

Sports betting, which is legal in Australia, provided an observable measure of fans’ expectations about game outcomes, particularly in the wake of a player injury. The nature of Australian football—limited protective gear, high-speed play—arguably makes its players more prone to injuries than athletes in many other sports. And that means more lineup changes.

Clubs announce lineups of 22 players a few days before a game, and gamblers closely follow these announcements. When the league announces a player injury, betting odds can swing widely, the researchers say.

“You can see the dynamics of people's betting behavior moving with the injury announcements,” Ferguson says.

When injuries make a game seem less closely contested to fans, as reflected in betting odds, stadium attendance decreases, the researchers say. Some 32,602 spectators attended the average game examined, the authors write, with a range of 4,370 spectators for the least-well-attended game to 93,370 spectators for the highest.

“A lot of the stadiums seat 60,000; and the largest stadium seats upwards of 100,000 people,” Ferguson says. “Given the size of these stadiums, we don’t have to worry about sell-outs capping attendance, like you would see in the English Premier League or the NBA.”

To identify the causal effect of outcome uncertainty on attendance, the authors concentrated on injuries to teams not favored to win in the regular season games. These types of injuries worked to make games strictly less even. They also controlled for perceived home team advantages and longstanding rivalries.

The importance of competition

So, what can teams in other sports learn from Australia? One lesson might be that consumers actually enjoy even competitions—and that may mean that adding more restrictions, like salary caps for players, would bolster popularity. In sports economics, Ferguson notes, there’s “quite a bit of debate” around salary caps because they can restrict a player’s ability to move between teams and increase their pay. On the other hand, a more evenly-matched group of teams, rather than a lop-sided competition with just a single team of superstars, may actually drive fan interest up, the paper suggests.

After all, it’s not easy for the average spectator to watch a match in person, even without a pandemic. That said, there are many die-hard fans who are undeterred by torrential rain, exorbitant ticket costs, or global contagions. It says a lot about the human condition, Ferguson says.

“Understanding why we go to live sports tells us something more general about what makes us tick,” Ferguson says. “It tells us something about the nature of our preferences for information and entertainment; our taste for surprise and suspense.”

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Is defined as the actions performed when searching for participating in and evaluating the sports activities that consumers feel will satisfy their needs?

Which of the following is one of the benefits you receive when you participate in sports?

What are the four main segments of sports marketing?