What causes home-field advantage

and why it matters for your business

Home-field advantage: in the NFL, the home team wins 57.6% of the time; in the NBA it’s 62.7%; and in Major League Baseball it’s 54.1%.

There are lots of theories about why there is a home-field advantage. Some say the support of the home crowd, the “12th man” as it’s called in football, affects player performance. Others think sleeping in their own beds and eating home cooking gives the home team an advantage. Still others believe that visiting teams are tired from the rigors of travel.

Those theories are wrong. In their book Scorecasting, Toby Moscowitz and Jon Wertheim use data to show that those popular theories don’t explain the home-field advantage. What does? The refs.

Home teams get preferential treatment from the officials. When it comes to close calls, the officials disproportionately favor the home team. They don’t intentionally do it. They do it subconsciously because they’re human and they can’t help but be influenced by the emotions of the home crowd.

What does this have to do with your business? A well-drafted contract should include a jurisdiction-and-venue provision—a clause that establishes where disputes will be resolved if they arise. Think of it as a home-field-advantage provision.

It would be scandalous to suggest that a judge could show any bias in favor of the “home team.” After all, every judge is divinely inspired and possesses the wisdom of Solomon. Nevertheless, all lawyers have stories about being “home cooked” at some point in their careers when trying a case on their adversary’s home turf.

If your contracts give you the home field, besides having your local refs decide any dispute, it will be your adversary that has to travel, possibly hire unfamiliar lawyers, and maybe even sleep in hotels. That shouldn’t affect their performance, just like it doesn’t affect professional athletes (don’t believe it? read the book), but it’s a potentially significant piece of leverage in litigation, which is important when more than 9 out of 10 lawsuits are settled before trial.

Coaches don’t rest their best players after clinching a spot in the playoffs. They keep going at least until they secure home-field advantage. Because of the importance of home-field advantage, you should include jurisdiction-and-venue provisions in your contracts.

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