The Economic Effects of the Steroid Era in Major League Baseball on Fan Behavior

Open Access
Author:
Onimus, David John
Area of Honors:
Management
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Srikanth Paruchuri, Thesis Supervisor
  • Srikanth Paruchuri, Honors Advisor
  • Vilmos Fosnocht Misangyi, Faculty Reader
Keywords:
  • Scandal
  • Steroids
  • Steroids Era
  • Baseball
  • Major League Baseball
  • Economics
Abstract:
A scandal can rock any organization to its core with potential lasting effects felt for years. The effects of each scandal are always different and can be significantly hard to determine with the ever-changing circumstances surrounding each individual scandal. Scandals are pervasive and have been felt in every industry. The sports world is no different. Major League Baseball (MLB) was rocked by the Steroids Era in the late 1990s and early 2000s. It involved hundreds of players using illegal anabolic steroids and other banned substances to enhance their performance on the field. Widespread steroid use angered the league and its fans. The MLB implemented new drug testing procedures, suspensions, and fines. Many believed fans would boycott games, causing untold economic effects on the league and its franchises. This thesis studies the first ten years (1998-2007) of the Steroids Era of Major League Baseball. It studies the economic impact of attendance and average ticket prices on each franchise for each year of the study. The results were stunning, but in various ways. Individual franchises could profit from the Steroids Era by having a certain number of scandalized players on their roster. However, as a whole, the league suffered staggering losses, losing over $100 million in seven of the ten years studied. The implementation of a league-wide drug testing policy at the end of 2002 saw these losses begin to diminish. The effects of this scandal were felt for many years and the league continues to fight the battle against steroid use.