Merchandise sales rank in professional sport

Abstract

Purpose – The purchase drivers of merchandise sales rank in professional sport are examined at both a conceptual and an empirical level. The paper aims to discuss these issues. Design/methodology/approach – A database was constructed for all 30 clubs in the National Hockey League based on a conceptual model of relevant variables. Both public and private data sources were accessed, covering an extensive 12-season period (1999-2011), including the 2004-2005 lockout when the season was cancelled. Principal-components analysis was used to reduce the number of variables for regression analysis to distinguish relatedness and to gauge the influence of those variables on merchandise sales rank. Findings – The results reveal that six club-based factors impact merchandise sales rank: Overall Fan Satisfaction, Media Exposure, On-Field Performance, Strength of a Club’s Brand, Local Market Dynamics, and Fan Capacity to Pay. These six categories of purchase drivers form a strong predictive model of merchandise sales rank in the National Hockey League. Research limitations/implications – The resulting model could be extended in future research by adding extra categories to the conceptual framework and by developing alternative or better measures of the variables the authors use. It could also be tested with other sales data as the dependent variable since the study was limited to ranking data on merchandise data for the National Hockey League clubs for each year. Future research could use the actual merchandise dollars for each club in a league to test the model. A further extension would be to model subparts of merchandise (such as jersey sales, impacts of brand changes, etc.). A similar area of future research would be to look at the role of individual athletes as opposed to clubs in driving merchandise sales rank or volume. Practical implications – For managers in professional sport, the results suggest that there are steps that can be taken to improve merchandise sales rank (and, by extension, merchandise sales volume). Practitioners can develop and follow strategies in this regard. Results also suggest that practitioners should put the achievement of high Regional Television Ratings – the strongest influencing variable on merchandise sales rank – as a priority. Social implications – The results confirm that brand is important when attempting to increase merchandise sales rank. Club managers need to be cognizant of their brand and its impact on merchandising in all decisions. Originality/value – The business of professional sport is evolving globally with new sources of revenue, including merchandising increasing in prominence. This research explores the drivers of merchandise sales rank in professional sport and provide direction on key antecedents. The study proposes and tests a conceptual model.