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Money prizes and media value in tennis: who leads the spectacle?

ESI-rg (Economics, Sports and Intangibles research group) By Francesc Pujol and Pedro Garcia-del-Barrio Money prizes and media value in tennis: who leads the spectacle? Acknowledgments

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Money prizes and media value in tennis: who leads the spectacle?

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  1. ESI-rg (Economics, Sports and Intangibles research group) By Francesc Pujol and Pedro Garcia-del-Barrio Money prizes and media value in tennis:who leads the spectacle?

  2. Acknowledgments We thank Bruno Mateu, Bernd Frick, Shannon McSween, Antonio Dávila, Jordi Fàbrega, Jorge Alvarez-Campana, Aarthi Rajaraman, Peter von Allmen, Francois Rycx and Uwe Sunde. We also gratefully acknowledge financial support from MEC: Spanish Ministerio de Ciencia y Tecnologia (SEJ2007-67295/ECON)

  3. Context The media value of players is a key intangible asset. ESI-rg – Universidad de Navarra has developed procedures to establishing homogeneous measures of intangible assets within the sport and spectacle industry. This paper applies ESI-rg methodology for analyzing the tennis industry of spectacle

  4. ESI-rg methodology has been broadly applied to: • Football (Spanish LFP, Champions League, World Cup in Germany) • Basketball (NBA and World Cup in Japan) • Formula 1 • ESI-rg data sets include also other fields: • US Baseball, Tour de France, English and Italian football, etc.

  5. Aims 1. Apply ESI-rg methodology for evaluating the media value of tennis players. 2. Analyse some aspects of this industry. 3. Estimate the relationship between sport performance and media value in tennis. 4. Explore if policies on money prizes could be more efficiently implemented (in accordance with the contribution of the agents who produce the spectacle).

  6. Data Sources:ESI-rg (authors own collection) WTA (http://www.sonyericssonwtatour.com) ATP (http://www.atptennis.com) Sample size: the 1,400 more relevant tennis players (700 at the WTA and 700 at the ATP). Periodicity: weekly records on notoriety (news) and popularity (presence at the Internet).

  7. Media Value 1. Degree of interest drawn by a player. 2. Is generated by the sport attainments as well as other personal characteristics of the player. 3. Create feelings of satisfaction, emulation, admiration, etc. 4. Is nourished through the mass media. 5. Influences the capacity of the player to generate revenues.

  8. Media Valueevaluation ESI-rg measure of media value is obtained through combination of the popularity and notoriety indexes. Popularity:degree of interestthattheplayerattractsfrom fans - Capturedbythenumber of web pageslinkedtotheplayer. Notoriety:degree of attentiondevotedtotheplayer in the media - Calculatedbythenumber of news in themainlanguages.

  9. Level of popularity reflects the interest that each player draws from the general public all around the world. • ESI-rg index of popularity • captured by the number of personal web pages, blogspots, specialized web pages of official sport institutions, commercial firms, etc. • Level of notorietyreflects the mass media exposure received by each player. • ESI-rg index of notoriety • calculated as the number of news generated by the player at each period of time in the main languages: English, Spanish, French, German, Italian, Portuguese and Dutch.

  10. Source: ESI-rg (authors own elaboration), ATP and WTA.

  11. Source: ESI-rg (authors own elaboration), ATP and WTA. FUENTE: ESI-rg elaboración propia, ATP y WTA.

  12. Evolution of Media Value (main tennis players, 2007)

  13. Media value concentration in Tennis

  14. Media value concentration in Tennis

  15. Concentration and winner-take-all hypothesis (Frank and Cook, 1995). • The huge degree of media value concentration indicates the existence of winner-take-all element. (The industry of tennis is a paradigmatic winner-take-all market). • Workers who are slightly better than their competitors become the winners of the market, earning much larger earnings than the others. (the wages of the former group exhibit a more than proportional magnitude with respect to its productivity).

  16. Factors generating Media Value in tennis 1.Media value levels stem from a number of sources, among which the sport achievement is a major factor: - Current sport performance (influence mainly through Notoriety) - Past sport success (impact especially on Popularity) 2. In markets like tennis spectacle, the level of notoriety and popularity is a major source of revenues. Hence, the following causal sequence can be stated: • Sport success  Media Value  Revenues

  17. Sport achievements and evolution of the notoriety (Roger Federer, 2007)

  18. Sport achievements and evolution of the notoriety (Rafael Nadal, 2007)

  19. Evolution of in Media Value (Andre Agassi, 2007)

  20. Evolution of in Media Value (Filippo Volandri, 2007)

  21. Other sources of Media Value in tennis The level of media value is determined by: Current sport performance, which attracts earnings through: gate revenues, merchandising, TV contracts, publicity, sponsorship, etc. Past sport performance, since there is a legacy element: players benefit from high WTA or ATP historical records. Number of tournaments in which the player participates in the current season. Otherpersonal characteristics of the individuals, including non sport-related factors.

  22. Sport performance and Media Value • Previous studies carried out by ESI-rg reveal a strong statistical relationship between sport success and media value. • ESI-rg report of the media value in Formula 1 recognized sport performance of the pilots as the key element to explain their media value. • (real and fitted values of media value in the estimated model were extremely close; the R-squared was very high). • Formula 1: Sport success  Media Value

  23. Real and predicted media value of Formula 1 pilots (2006) VM predicted

  24. Media Value and economic revenues • Previous studies conducted by ESI-rg show a strong statistical relationship between media value and revenues. (the media value is a major feature to generate revenues) • Reports on media value in Football released by ESI-rg show that the teams enrolling players with more talent (who possess special skills) benefit from larger economic rents. • Football: Media Value  Revenues

  25. Media Value and revenues of football clubs (2006) Total revenues

  26. Summary statistics of the regressions for WTA players

  27. Estimates of the Media Value model (Women) Number of obs = 698 F( 6, 691) = 63,66 Prob > F = 0,0000 R-squared = 0,8916 Root MSE = 1,1689 Media Value | Coef. Rob.Std.Err. t P>|t| -----------------+----------------------------------------- WTA 2007 | 0,0046 0,0004 10,03 0,000 WTA historic | 0,0030 0,0005 6,11 0,000 Slam 2007 | 4,5383 3,2358 1,40 0,161 Nºtorneos 2007 | -0,0315 0,0075 -4,18 0,000 Idioma | -0,3138 0,1120 -2,80 0,005 Tamaño País | 0,0015 0,1114 0,01 0,989 _cons | 0,0170 0,1122 0,15 0,879

  28. Summary statistics of the regressions for ATP players * Earnings expressed in ‘000 of US $.

  29. Estimates of the Media Value model (Men) Number of obs = 680 F( 6, 673) = 149,65 Prob > F = 0,0000 R-squared = 0,9253 Root MSE = 0,8010 Media Value | Coef. Rob.Std.Err. t P>|t| ----------------+---------------------------------------- ATP 2007 | 0,0043 0,0003 14,36 0,000 ATP historic | 0,0041 0,0010 3,85 0,000 Slam 2007 | 1,0031 0,8949 1,12 0,263 NºTorneos 2007 | -0,0615 0,0074 -8,24 0,000 Idioma | -0,2444 0,0728 -3,35 0,001 Tamaño país | 0,1871 0,0691 2,71 0,007 _cons | 0,3678 0,0947 3,88 0,000

  30. Summary statistics of the regressions for all the players * The information on Money Prizes is expressed in ,000 of US $

  31. Estimates of the Money Prizes model (including Nº tournaments) Number of obs = 1378 F( 3, 1374) = 106,00 Prob > F = 0,0000 R-squared = 0,8473 Root MSE = 133,0 Prizes 2007 | Coef. Rob.Std.Err. t P>|t| ---------------------+--------------------------------------- Media Value | 98,7883 9,8614 10,02 0,000 Nº Tournam 2007 | 1,5542 0,6633 2,34 0,019 Women | 29,5679 7,1539 4,13 0,000 _cons | -25,6840 7,5526 -3,40 0,001

  32. Estimates of the Money Prizes model (excluding Nº tournaments) Number of obs = 1378 F( 2, 1375) = 53,75 Prob > F = 0,0000 R-squared = 0,8463 Root MSE = 133,38 Prizes 2007 | Coef. Rob.Std.Err. t P>|t| ---------------------+--------------------------------------- Media Value | 99,3284 9,6221 10,32 0,000 Women | 25,8666 7,3864 3,50 0,000 _cons | -5,2970 9,7207 -0,54 0,586

  33. Extensions of the paper: 1.Replicate the analysis of the media value model using (current and past) Prizes, instead of the WTA or ATP rank. (it will allow us running the regression for the whole sample, including jointly men and women). 2.Use the deviations from the predictions of the media value model as a way of estimating the non sport-related attractiveness of individual players.

  34. Some ESI-rg reports • Pujol, F. and Garcia-del-Barrio, P. (2008) (with the colaboration of J. Elizalde), “ESI-rg Biannual Report on Media Value in Football”. February 2008, ESI-rg - Universidad de Navarra. • Pujol, F. and Garcia-del-Barrio, P. (2007), “Report on Media Value in Football. The English Premiership extends its supremacy”, ESI-rg, Universidad de Navarra. (English version) • Pujol, F. and Garcia-del-Barrio, P. (2007), “Tres colíderes, un campeón: valor mediático en la Fórmula 1”, Technical Note 2/07, ESI-rg, Universidad de Navarra. (Spanish version) • Pujol, F. and Garcia-del-Barrio, P. (2007), "What is the Contribution of David Beckham to Real Madrid?", Technical Note 1/07, ESI-rg, Universidad de Navarra. (English and Spanish version) • Pujol, F. and Garcia-del-Barrio, P. (2006), "Report on the Media Value of Football. September 2006", ESI-rg, Universidad de Navarra. (English and Spanish version) • Pujol, F. and Garcia-del-Barrio, P. (2006), "Informe final: El valor mediático del Mundial de baloncesto 2006", ESI-rg, Universidad de Navarra. (Spanish version)

  35. ESI-rg recent publications • Garcia-del-Barrio, P. and Szymanski, S. (2008), “Goal! Profit maximization vs. Win maximization • in football leagues”, AIES-IASE Working Paper Series, Paper No. 06-21. Forthcoming. • Barros, C.P. and P. Garcia-del-Barrio (2008), “Effieciency measurement of the English Premier League with a Random Frontier Model”, Economic Modelling, Forthcoming. • Garcia-del-Barrio, P. and F. Pujol (2008), “El papel del fútbol en la sociedad actual. Fútbol: ocio y negocio”, Revista Empresa y Humanismo, Vol. XI, nº 1/08 • Garcia-del-Barrio, P. and F. Pujol (2007B), "El valor mediático del mundial de Baloncesto 2006", • Intangible Capital 3 (4): 129-156. (http://www.intangiblecapital.org/index.php/ic/issue/view/38) • Garcia-del-Barrio, P. and F. Pujol (2007A), "Hidden Monopsony Rents in Winner-take-all Markets. Sport and Economic Contribution of Spanish Soccer Players", Managerial and Decision Economics 28: 57-70. • Garcia-del-Barrio, P. and F. Pujol (2005), "Està la popularitat dels esportistes inclosa en la valoració • de mercat?", Revista Econòmica de Catalunya, N. 51, pp. 56-69.

  36. More information: ESI-rg home page (www.unav.es/econom/sport) ESI-rg tennis (www.uic.es/esirg)

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