Revenue generation in professional sport: a diagnostic analysis

Consistent with the literature, the current research suggests that a myriad of factors contribute to the revenue generation ability of major professional sport teams. Diagnostic analysis on the 2002–2003 National Hockey League, National Basketball Association, National Football League, and Major League Baseball seasons uncovers the antecedents of a measured deviation. Over 35 potential independent variables were identified and reduced to 13 factors. Linear regression identifies eight factors significantly related to revenue generation; namely Home Game Experience, Heritage, Market Support, Winning, Competition, Market Characteristics, Market Age and Radio Appeal. Results suggest that product and place considerations are most important in achieving revenue while promotion and price considerations play only a minor role. In this regard, managers of professional sport teams are provided with guidance. Recommendations for future work include alternate ways of operationalising variables and developing a more sophisticated model to represent both direct and indirect relationships.