When Is the Honeymoon Over? National Hockey League Attendance, 1970­2003

John C. Leadley and Zenon X. Zygmont

Canadian Public Policy, 2006, vol. 32, issue 2, pages 213-232

Abstract: This paper uses a Tobit analysis to test for the presence of a honeymoon effect for National Hockey League (NHL) arenas using pooled cross-section time series samples from 1970 to 2003. No previous NHL attendance demand or attendance-related study has tested for such an effect. We estimate that the opening of a new arena increases attendance demand 15 to 20 percent in the first years of operation, and that the honeymoon is over after five years. This is similar in magnitude and duration to the previously estimated effects for new facilities for Major League Baseball and National Basketball Association teams. For the period 1994­2003, when 21 new arenas were constructed, the honeymoon lengthened to eight years. Because many NHL arenas are subsidized, the honeymoon effect has public policy implications if revenue projections for a new arena overestimate the initial effect or ignore the decline over time.

Date: 2006
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