Safety & Solvency: The Economic Implications of CTE in the NFL

Abstract

This paper investigates the economic impact of CTE related health concerns on National Football League (NFL) revenues and franchise values, using Difference-in- Differences (DiD) regression modeling with the NFL as the treatment group and the NBA as a control group. A series of models are deployed with measures of revenues and franchise values as dependent variables. Models control for fixed effects across entities and time as well as entity specific random effects. Results indicate that the NFL’s CTE crisis had a negative impact on franchise revenues and valuations for the period of 2016-2019. These results, combined with the state of the CTE conversation and its links to the NFL, pose a legitimate and immediate threat the NFL’s dominance of the North American sporting market.