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May 4, 2007
Lies, Damned Lies
Defining a Market, Part Two
I hope yesterday's part one didn't lose you guys, because now for the (comparatively) fun part: our team-by-team breakdown. In addition to the attendance and TV estimates from my model, I have provided a comparison to the Mike Jones figures, and also the raw census data from each team's primary MSA. The numbers in parenthesis represents a team's relative market share (with 100 representing league average) and its rank among the 30 clubs in that category.
New York Yankees
New York Mets
Attendance Sphere: 14.3M (244, 2nd)
The Yankees are baseball's one and only hegemon, and they can steal fans away from other East Coast cities that are just an Acela ride away from New York. Giving them a bonus credit for 10 percent of Puerto Rico's viewing audience is piling on, but the model thinks that their superior influence rating allows them to outshine the Marlins on the island. That might not be unrealistic, given Puerto Rico's connections with New York City.
The Yankees have some slight geographic advantages in addition to their higher influence rating, as they're a slightly shorter commute from both Westchester County and Northern New Jersey, enough to make up for any advantages the Mets might have on Long Island.
Los Angeles Dodgers
Los Angeles Angels of Anaheim
The Dodgers have always drawn well, and have some built-in geographic advantages, since they're a much shorter commute from the Valley, whereas the Angels begin to run into trouble with the Padres in Orange County. Still, both the growth of the Angels' brand and regional patterns of development in Southern California are harming the Dodgers, especially in terms of TV audience. Arte Moreno deserves a lot of credit for rebuilding his franchise; our method gives the Angels about a 9:5 edge over the Dodgers in fast-growing Riverside County. Their strong brand is also helping them to encroach on Padres' territory as you head south.
Assigning the share of the Las Vegas TV market to the Angels sounds like it might be wrong, but they're both nominally closer to Las Vegas and have a higher influence rating than the Dodgers. Considering how often I go out to Vegas, I should know one way or the other.
This is high-risk, high-reward territory. The Phillies have a very dense region to draw from, with hordes of people in every direction. But they're very much encircled beyond greater Philadelphia, with the Orioles to the southwest, the Yankees and Mets to the northeast, and the Pirates to the west. On their worst days, they're a lot of people's second-favorite team.
Chicago White Sox
Even without knowing about the reach of WGN, we've come up with what looks to be the correct result. The Cubs are running about even with the White Sox in Chicago, but do significantly better in the region, where their higher influence score makes them the de facto second team in places like western Michigan, southern Wisconsin, and downstate Illinois. The difference between the Cubs and the White Sox is just enough that the dividing line between 'big market 'and 'mid-market' might go right about here.
Boston Red Sox
They're a regional team, to be sure, but once you move beyond Boston, there aren't all that many people in New England--about 4.3 million combined in New Hampshire, Maine, Rhode Island, and Vermont (Connecticut is more populous, but shared with the New York clubs). The model assumes that the Red Sox don't deserve any credit for Montreal, which is nominally closer to Boston but spiritually closer to Toronto.
Toronto Blue Jays
Toronto itself is a fairly large market, and the Blue Jays get a bit of extra credit for being Canada's last man standing, though Winnipeg goes to the Twins, and Vancouver to the Mariners.
San Francisco Giants
It might seem strange that the A's run ahead in the attendance sphere when the Giants are more influential, but it's best to ignore the current decrepit state of the Network Associates Coliseum and remember that the A's have outdrawn the Giants for long stretches of time. In particular, they should have a structural advantage drawing from the Sacramento area, although that's mitigated to some extent by the difficulty of commuting into Oakland from the West Bay.
Interestingly, the Giants might have some legitimate gripe about the A's move to Cisco Field. If we re-center the A's coordinates in Fremont, the following happens to the respective spheres of influence of the two teams:
Attendance TV/Media A's -343,343 +717,632 Giants -81,858 -793,629 Dodgers -342 -76,187 Net -425,543 -152,184
The model thinks that the A's are not making an especially good trade-off in terms of attendance, as they choke off the Sacramento-Stockton region in favor of San Jose, where the Giants will remain influential. They do potentially expand their TV audience, but most of that gain would come directly at the Giants' expense.
I ran these results by Gary Huckabay, who knows the region extraordinary well, and he was skeptical about the model's conclusions. In particular, he pointed out that the South Bay is quite a bit wealthier than the Sacramento area; the A's might not be drawing more fans, but they'll be drawing more of the "right kind" of fans. The current plans for Cisco Field, which feature a small capacity but a very premium baseball experience, dovetail well with Gary's assessment.
Was Washington a slam-dunk place to move a ballclub? The model says that the Nats' relocation from Montreal added about 1.3 million to baseball's aggregate TV audience. That's not as much as the raw gain in market share experienced by the Expos/Nationals themselves, since some of their audience was cannibalized from the Orioles and the Braves.
Note that the Braves rank 13th in their attendance market but 2nd in their TV market--it's no accident that Ted Turner invented the Superstation. There are huge numbers of people in the South that are closer to the Braves than any other club, but not close enough to drive to games regularly. Atlanta itself has grown by 20 percent since the 2000 census, but that growth is along the city's periphery rather than in its center, and the traffic in the region is terrible, so the Braves remain a television team.
The ransom paid to Peter Angelos was perfectly well justified: the model figures that the relocation of the Nationals cost the O's about a million in attendance and 4.5 million in TV ratings. With that said, the Orioles aren't a small-market team, not by any means. Although Baltimore itself isn't large, the region is full of people, and for the time being the Orioles' higher influence rating gets them a fair amount of fans from metro DC. Once the Nationals become more competitive and complete their new ballpark, the O's could suffer additional losses. Note that the Mike Jones rating predates the Expos' relocation.
Because Michigan is a peninsula, the Tigers own most of the state, but little outside of it, save for a few spares in Toledo and Windsor, Ontario. The Tigers are moving gradually down the charts as Detroit continues to shrink.
Each of the Texas teams follows the same pattern: Dallas and Houston have fairly large metro populations, but there's a lot of relatively empty land surrounding them. On the other hand, once you start dividing up the other large cities in the region (like San Antonio and Oklahoma City), both teams have the potential to do quite well in terms of TV rights.
Deceptively large in terms of MSA, Miami is surrounded by ocean on two sides and a big swamp on another. From a purely geographic point of view, a move to downtown Miami would not necessarily help the Marlins, since there's nothing south of the city, and it makes the commute longer from Fort Lauderdale and West Palm Beach. If relocated to the Orange Bowl, for example, the model estimates that the Marlins' attendance sphere would drop by approximately 300,000 people.
The Indians do a bit better than their MSA suggests. Their region is fairly dense, and they're able to draw from smaller cities like Canton, Akron, and Youngstown, while sharing Columbus with the Reds. When Jacobs Field was a bigger deal, they also got fans from as far away as Buffalo and Southern Michigan.
Still a small market by any definition, since there ain't much around Phoenix but cacti and golf courses. But the region has grown by 25 percent since 2000, and that pattern should continue.
The Reds are potentially a quasi-regional club. Although Cincinnati itself is small, they ought to be able to draw significantly from Kentucky (particularly Louisville) and Indianapolis, and perhaps to some extent from Nashville and even West Virginia. It isn't a wealthy region, but thinking of the Reds as a small-market team is a bit misguided, particularly from a TV perspective.
Jones seems to overrate the Mariners slightly, giving them credit for 80 percent of Portland, which might be the right fraction for the Mariners' TV audience, but is probably too ambitious in terms of attendance. Still, the Mariners are leveraging a relatively strong brand to expand their influence in the Pacific Northwest; we estimate that about one-sixth of their TV audience is in Canada.
San Diego Padres
If they're going to produce even mid-market revenues, the Padres are going to need to steal fans from greater Los Angeles, and particularly Orange County, but the Angels' strong brand is winning over the region. We aren't giving the Padres credit for Tijuana, as I doubt their nominally Hispanic nickname is helping them very much.
St. Louis Cardinals
The Cardinals mirror the Braves in a number of ways. Although St. Louis itself is small, it is relatively far removed from other major league cities, and the Cardinals take advantage by means of their high influence score. We have them as the dominant team in Little Rock, for example, and also holding up well in places like Des Moines and Nashville.
The Twins do just a tiny bit better in terms of TV audience, since there are few clubs around them, but there aren't many people out there in the prairie. The only positive is that the Twin Cities are home to a surprising number of corporate headquarters, so a smaller park with lots of luxury suites might do the trick.
Tampa Bay Devil Rays
Again with that peninsula problem; unless dolphins start coming to baseball games, you'd rather not have your city surrounded by water. The Devil Rays do pick up some TV audience from Orlando, but their low influence rating means that they get little credit for Jacksonville and parts north.
There was once some notion that the Rockies would be a team for the entire Mountain State region, but that is rapidly losing steam as attendance and the Rockies' brand value deflates. There aren't very many people in Wyoming or Utah, and once you get into the more populous areas, you start having to compete with the Diamondbacks and even the Texas clubs. Now that the novelty of baseball in Denver has worn off, the Rockies might have some trouble getting their mojo back.
The Rust Belt region is pretty well populated throughout, but the Pirates run into problems between their low influence score and the fact that much of their natural region lies out-of-state, particularly in eastern Ohio. We have the Indians with about a 3:1 edge in Youngstown, for example, which is roughly equidistant from Cleveland and Pittsburgh. This is a small market, and it's getting smaller.
Milwaukee really isn't that far from Chicago, but that's more a minus than a plus. The Brewers do get the occasional field trip from Chicagoland, but with two teams to compete with, they don't penetrate into Illinois to any large extent. Having Brewer loyalists in Madison and Green Bay helps slightly, but not nearly enough.
Kansas City Royals
Even if the Royals' brand were more influential, you don't become middle market by picking up fans in Omaha and Wichita. We show the Cardinals as having about a 2:1 edge overall in Missouri.
Next week, we'll use our model to evaluate potential expansion and relocation destinations. Hint: Las Vegas is like Bad Idea Jeans.