JONAS P. FUNK (*)
Are black professional athletes subject to racial discrimination? This question has received an enormous amount of popular and scholarly attention. However, despite numerous economic studies that have attempted to provide an answer, the evidence remains mixed and inconclusive. In this study, we examine whether patterns of television viewing are systematically correlated with the racial composition of teams in the National Basketball Association (NBA). To our knowledge, the television viewing habits of sports consumers, as reflected in Nielsen ratings, have not been studied by economists looking for evidence of racial discrimination in professional sports.
The next section examines an important subset of the literature on racial discrimination in sports: discrimination by sports consumers or more colloquially, fans. Section III describes our data set, including the main focus of our study: Nielsen ratings for local, non-cable NBA basketball games. Section IV reports the main results of the econometric analysis. The principal finding is that the size of television audiences viewing NBA games is positively correlated with increasing participation by white players in NBA games. This result indicates the presence of consumer discrimination in the market for NBA players. Section V reports the results of further analysis to quantify the relationship between commercial advertising revenues and the number of viewers watching NBA games. We find that commercial advertisers pay more for commercial slots when more viewers are tuned in, indicating that white players provide teams with extra advertising revenues. Our estimated revenue differential is comparable in magnitude to a white-black salary differential documented by several existing studies of the NBA, suggesting that advertising revenues may explain much of the salary differential. Section VI summarizes our findings.
II. WHAT DO WE KNOW ABOUT CONSUMER DISCRIMINATION IN PRO SPORTS?
A number of economic studies have examined whether consumers of professional sporting events discriminate against black athletes. (1) Three main approaches have been pursued, yielding mixed results. One approach examines whether fans are willing to pay more for sports memorabilia of white players than of non-white players, an approach pursued in several studies of baseball. Nardinelli and Simon (1990) found significantly lower demand for baseball memorabilia of non-white (i.e., black or Hispanic) players, as reflected in the prices of baseball cards. This result was partly corroborated by Andersen and Lacroix (1991), who found lower prices for the baseball cards of blacks, though not for Hispanics. On the other hand, Gabriel, Johnson, and Stanton (1995) uncovered little evidence of price differentials in the baseball cards of the different racial groups.
A second approach has been to examine voting by fans for all-star teams. Hanssen and Anderson (1999), for example, have applied this approach to major league baseball. They discovered significant voting discrimination against black players during the 1970s which has, however, steadily decreased over time. They find little evidence of discrimination currently against blacks. To our knowledge, this approach has not been applied to other professional sports.
A third approach examines whether the racial composition of a team influences fans' willingness to attend sporting events. Again the evidence is mixed. Schollaert and Smith (1987) found that the racial composition of an NBA team had an insignificant effect on attendance at games. Similarly, Brown, Spiro, and Keenan (1991) found attendance unaffected by the amount of time played by black players. On the other hand, Kahn and Sherer (1988) found attendance significantly higher for NBA teams fielding more white players. (2)
Fan interest in and loyalty to a professional team may, of course, be manifested in other ways. …