Finding a home: The search for the next MLB city (Part 1) and (Part 2)

[Matt]

A lot of people talk about how the Rays and other teams are the victims of unfortunate ballpark/city situations. However, if it came to it, where would they move to? In this series, I'll break down what cities have the resources, people, and drive to become the next host of a MLB franchise.

A sad fact in life is that not every business enterprise can be successful. When times get tough enough, sports franchises are forced to change the way they work (sometimes with extreme measures like relocation). This series is going to explore just how feasible relocation currently is. The question being asked here is this: if any of the 30 MLB franchises decided to up and move, where could they go and what would be their likelihood of success?

To start, let me make one thing very clear: this post is not about expansion. Adding a newMLB team changes the dynamic of the discussion. Establishing a brand is different than relocating a brand to a new market. Here is the setup:

1) All North American markets are open for business. This includes several major Canadian and Mexican metro areas. (Note: For this series, the only non-U.S cities included are Mexico City, Montreal, Toronto, and Vancouver.)

2) Markets that currently host a team are eligible to gain another team.

3) Host cities will be categorized by metro area.

4) Measures for all metro areas will include: population, Gross Domestic Product (GDP), GDP/Capita, volume of college graduates, age demographics, and unemployment rate.

5) For metro areas currently possessing MLB franchises, the following measures will also be used: attendance, percent capacity filled, and average wins per season.
Setting Up the Study
Before talking about the numbers, the framework of the study needs to be set up. Firstly, there were 46 metro areas included in the study: the 26 current MLB markets and 20 other metro areas. There were no minimum requriements that metro areas had to meet. Secondly, Gross Domestic Product is used to help define the economic state of the area.GDP is defined as an area's output of goods and services, and this measure is typically measured in one fiscal year. (Note: For this study, 2010 is used as it was what was available.)GDP allows you to see how money is being earned or is flowing through a given market and serves as a way to measure the affluence of a market. However, GDP is a set number and doesn't take into account how many people it took to produce the goods involved.

To measure the markets in another way, GDP per capita is used, which is an indicator of the money being earned by the individuals within the market. Within the markets studied in this research, GDP/Capita was heavily dependent on the volume of college graduates in the area, with an R of .65. This makes it important to know the volume of college graduates in an area. GDP numbers were borrowed from this graph from economist Joe Cortright. The ranges of college graduates were turned into ranks (15-24 is 1, 25-34 is 2, etc) and measured against other variables such as GDP. The last major items considered were unemployment rate and demographic information, both of which help to tell more about the current ability of a metro area's population to possess and spend disposable income on baseball.

Analyzing Current MLB Cities

When attendance and wins are added to the above variables,the current state of MLB metro areas can be analyzed. To help define what cities might need to host a team, here are the minimum and average numbers for each of the key variables:

• Population: 5,057,409 Average; 1,555,908 minimum (Milwaukee)
• GDP: $291,137,577 Average; $84,574,000 minimum (Milwaukee)
• GDP/Capita: $57.57 average; $40.85 minimum (Tampa)
• Unemployment Rate: 7.14 Average (rate); 9.9 maximum (Detroit)
• College Graduate Score: 2.68 Average; 2 minimum (multi-way tie)
• 5 year Attendance Average: 29,757 Average (rate); 19,947 minimum (Miami)

This sets up a nice framework for what should be expected of MLB teams. When compared to non-MLB metro areas, current MLB metro areas have much higher populations, much higher GDP, larger GDP/Capita, a better average college graduate score, and a lower rate of unemployment. In short: MLB cities are already MLB cities for a reason.

Setting Up a Predictive Model

The next step here is using the information to set up a model to determine whether or not a city putting up a bid for a team will be able to maintain a strong enough business model to survive on its own. Attendance is a driving force behind any strong organization. Getting people in the park increases the opportunity to create revenue through concessions, merchandise sales, and other avenues in addition to ticket sales. Due to this, attendance is going to serve as the main focus for this predictive model. If fans don't come out to games, then teams are going to struggle to make money.

To find out what makes people show up, the main variables mentioned earlier were related to attendance.. For this study, five-year averages were used for attendance. The primary factor in whether or not fans would attend games is the average number of wins achieved per season. When the average number of wins over a five year span was related to the average attendance, a correlation of .68 was found. The evidence suggests that people pay to watch their teams win, which means the first step in determining success is figuring out how often a team will win.

The problem that this causes is the fact that this scenario calls for any potential team to move. This even includes franchises like the Yankees and the Red Sox. Therefore, when the results of the model are shown, they will be shown for a "bad" team (70 wins), an "average" team (81 wins), and a "good" team (90 wins). GDP, GDP/Capita, and population size were also tested. In the case of GDP/Capita, no evidence was found to suggest it has a true impact on attendance. The same was not true for GDP and population size, both of which correlated to attendance with an R north of .47. While the impact may be small, these are factors that can be used to help build a model.

Using regression analysis, a model can be developed to help predict expected attendance in a given market (assuming a certain number of wins). Here is the equation I formed for expected attendance:
.2277*(.00005*(GDP) + 25925) + .4559*(626.68*(Wins)- 20623) + .2211*(.0008*(Population) + 25494) + .095 (league average attendance)

That is a laundry list of numbers and variables, so here is how it breaks down: 22.77% of the variance in attendance is believed to be caused by GDP within a metro area, 45.59% is believed to be caused by win total, 22.11% is believed to be caused by population size, and the remaining 9.5% is being treated as the cause of the fact that people simply enjoy going to baseball games and will do so regardless of the market they are in. (Note: Other variables such as age demographics and unemployment rate were tested and found to have no noticeable relationship with attendance.) Below is a graph of the relationship between actual vs. predicted attendance:

Since the relationship between GDP and attendance was the weakest of the three, I wanted to see how the model would do if GDP was not used in the equation. When GDP is removed,the equation becomes:
4559*(626.68*(Wins)- 20623) + .2211*(.0008*(Population) + 25494) + .323 (league average attendance)
The results of this change are shown below:

When wins, population size, and a given assumption that people will attend games simply because they love baseball are used to to predict attendance, a relatively strong model can be formed (.72 R) that is stronger than simply using wins alone.

Conclusion

Current MLB cities are prime real estate for MLB franchises. They boast high populations, high GDP, high rates of GDP/Capita, high volumes of college graduates, and relatively low unemployment rates when compared to the other 20 metro areas included in this study. However, it appears that not all current MLB franchises are thriving in their cities, which means that the next MLB city is going to have to do more than score well in the given model for predicted attendance. In the next post, I will start breaking down metro areas and analyze whether or not they are viable options to become the next MLB host.

 

[Matt]

There are many metro areas competing to be included among those that can feasibly host MLB franchises. This post takes a look at those most unlikely to gain the status. They are a group known as the "Underdogs."

The match up of David versus Goliath is not new to the world of sports, and things are no different when it comes to finding a new market to host an MLB franchise. Of the 46 metro areas included in this study, a small group of five stands the tallest task of all: overcoming small population sizes to be considered for a MLB team. To be more specific, this group presented as "The Underdogs" includes the five metro areas in the study that are smaller than Milwaukee (the smallest MLB metro area).
Finding a Home: The Search for the next MLB City

Read part one of the series here, where the study is defined.


Why is Milwaukee so significant for defining the group? Well, it's because of just how much smaller the Milwaukee metro area is compared to the other MLB hosts. The area has a population size 37.75% as large as the average of the 46 markets included, and it has a population 30.76% the size of the current MLB hosts. The Underdogs are going to need to present something more to the table to be seriously considered as a market, given they are the only markets smaller than Milwaukee. Let's take a look at The Underdogs and what they bring to the table.

Underdog #1: El Paso, Texas
El Paso is the smallest of the Underdog metro areas. Of the 46 markets included in this study, it is the only one with a population below one million people. Due in part to its small population size, El Paso produces only 13.57% of the Gross Domestic Product (GDP) that the other 46 markets produce. This creates a major uphill climb for the city which will need to be covered by affluence and the ability for corporate involvement.

Unfortunately, El Paso does not present the kind of affluence that is desired from a MLB host. It produces GDP/capita at 69.13% of the rate that the average market does, and it is estimated that the number of individuals with a college degree living in the area sits between 15-24% (making it one of two such cities in this study). When the area's high unemployment rate (8.9%) is included, El Paso is seen as even less desirable.

In the first post in this series, I came up with a model for predicted attendance which can be seen here. When El Paso is run through the model, here are the results:

"Good Team" (90 wins expected): 31,701 fans per game

"Average Team" (81 wins expected): 29,130 fans per game

"Poor Team" (70 wins expected): 25,988 fans per game

Overall, attendance is lower on average in reality than it is when predicted in the model. To give perspective, El Paso (with a Poor Team) has the second lowest predicted attendance when compared to MLB cities (only ahead of Pittsburgh).

Without a strong corporate presence and weak results in affluence and predicted attendance, El Paso does not seem to have a shot at becoming a MLB host market. The news is not entirely bleak, however. Last September, El Paso was announced as the next home of the Padres' AAA affiliate after the Tuscon Padres were purchased by Mountainstar Sports Group of El Paso.

Underdog #2: Louisville, Kentucky
Louisville comes in as an Underdog for two reasons: it has the second smallest population of metro areas included in the study and is only 99.4 miles from Cincinnati (according to Google Maps). Currently, Louisville serves as the host market for the Reds' AAA affiliate (the Louisville Bats). The Bats do extraordinarily well for a minor league market, as they frequently finish near the top of the attendance figures, which provides a boost to Louisville as a potential host.

In terms of population, Louisville is much larger than its fellow Underdog El Paso. The metro area is home to more than 1.2 million people, although it only has a population size 24.43% of the average MLB market. In terms of affluence, Louisville scores well. Despite a small GDP, Louisville boasts a GDP/capita 91.64% of the average MLB market (this puts them in the neighborhood of Cincinnati) and it is estimated that between 25-34% of the residents have graduated with college degrees. Below are the results of the attendance predictor:

Good Team: 31,778 fans per game

Average Team: 29,206 fans per game

Poor Team: 26,064 fans per game

Ultimately, Louisville's biggest weakness is that of all of the Underdogs: a lack of a large sum of GDP. However, Louisville does have the affluence to compete as a MLB market, which means that it should be considered for hosting a MLB team. For now though, Louisville will likely have to continue to play host to a AAA team.

Underdog #3: Oklahoma City, Oklahoma
Oklahoma City is nearly identical to its sister Underdog Louisville. In terms of affluence and population the metro areas are nearly identical. Oklahoma City is also the host of theAstros' minor league affiliate Oklahoma City Red Hawks. As expected, the attendance predictor numbers come out pretty similarly:

Good Team: 31,781 fans per game

Average Team: 29,210 fans per game

Poor Team: 26,067 fans per game

It might seem a tad frivolous to run the numbers, but it's important to remember than an extra three fans per game amounts to an extra 243 fans per season. Every additional fan that attends a game has an opportunity to spend more money, have a good time at the ballpark, and can go on to tell other people about that good experience. Developing a fan base is all about outreach, so those extra fans are important. Because of this and the fact that Oklahoma City is 211 miles from the nearest MLB market (Arlington), Oklahoma City is a better potential landing spot for a team than Louisville.

As an added bonus for Oklahoma City, the metro area was awarded the NBA's Seattle Supersonics in the recent past. The franchise, known as the Thunder, operated at 100% attendance capacity during the 2012-2013 season. They haven't operated below 97.7% capacity since their relocation to Oklahoma City.

Underdog #4: Memphis, Tennessee
Even though it is only the 2nd largest of the Underdogs, Memphis is the strongest candidate among the Underdogs to host an MLB franchise. The reason for this is a combination of its population size (26.20% of the MLB average) and affluence ($49 GDP/capita and 25-34% college graduate rate). The only true mark against Memphis is its 9.3% unemployment rate, which is high relative to the MLB average.

Good Team: 31,794 fans per game

Average Team: 29,223 fans per game

Poor Team: 26,080 fans per game

These attendance figures are strong enough for Memphis to compete with the weakest of MLB's franchises. Much like Oklahoma City, Memphis plays host to both a AAA affiliate (St. Louis' Memphis Redbirds) and a NBA franchise (the Memphis Grizzlies). Memphis serves as a viable candidate to host an MLB franchise if the new ownership group can deal with the fact that the new franchise would be 283.6 miles from St. Louis (one of the absolute strongest MLB markets).

Underdog #5: Jacksonville, Florida
Jacksonville may be the most populous of the Underdog markets, but it might just be the weakest candidate to host a team. Jacksonville carries a population similar in size to Memphis, but it is roughly 8% less affluent in terms of GDP/capita, and it actually produces less overall GDP than Memphis does. Here is what the attendance predictor believes:

Good Team: 31,798 fans per game

Average Team: 29.226 fans per game
Poor Team: 26,083 fans per game

There is, however, one thing the attendance predictor cannot account for: Jacksonville is a Florida market, and Florida markets do not do well. Tampa averages under 21 thousand fans per game, and Miami has averaged under 20 thousand fans per game over the last five years (and currently, with a one year old stadium, they aren't drawing at all). It isn't quite fair to just assume that Jacksonville will follow suit with Miami and Tampa as a weak market, so let's borrow some figures from the NFL's Jacksonville Jaguars.

The Jacksonville Jaguars operate in the bottom third in attendance nearly every year. In fact, attendance problems have gotten so bad that the team has had documented concernsover games being blacked out on television. The Jaguars have issues drawing fans for 8 games out of a season for the sport that draws better than any other. Therefore, it is not reasonable to assume than an MLB franchise would be any different, especially in a less popular sport over 81 games.

Conclusion
To me, rooting for the Underdog is almost always fun. In this case it does not appear that the Underdogs have much of a shot. Their population sizes and overall production of GDP are generally too small to be considered viable candidates to host a team. That being said, if Milwaukee can host an MLB franchise it wouldn't surprise me to see one of these five cities eventually get a shot at hosting a MLB team.
A reminder: never underestimate the underdog.
--

 

[Villain]

San Jose, Portland, and Salt Lake City seem like they'd be half decent options.

 

[NAHSTE]

Had this discussion before. Only viable sites I can see are a third NY area team, Portland (but they didn't support minor league ball twice and their stadium has been converted to soccer-specific), Omaha (stadium is almost up to MLB caliber already, fanbase supports college and minor league baseball) and maybe Nashville or Memphis (oppressive summer humidity/heat would be prohibitive to attendance).

 

[Villain]

Had this discussion before. Only viable sites I can see are a third NY area team, Portland (but they didn't support minor league ball twice and their stadium has been converted to soccer-specific), Omaha (stadium is almost up to MLB caliber already, fanbase supports college and minor league baseball) and maybe Nashville or Memphis (oppressive summer humidity/heat would be prohibitive to attendance).

Since covered Stadiums seem to be so trendy, a team in Nashville of Memphis could go with a convertible roof. Then they'd be attractive to attendance with a controlled climate. They could even do an Arizona Cardinals-style rollout field with natural grass.

 

[MVPete]

http://www.draysbay.com/2013/1/30/3...nly-300-tampa-bay-rays-season-ticket-accounts

During yesterday’s aggressive meeting with Pinellas County, Rays principal owner Stu Sternberg finished his part of the presentation with this fun fact: of all the season ticket holders for the Rays, only 300 accounts are from St. Petersburg. This accounts for only 800 to 900 seats in the Trop.
Aptly noted by go-to stadium news reporter Noah Pransky, the city of St. Petersburg is home to 250,000 people. The implication here is that less than half a percent of St. Pete residents are season ticket holders for the Tampa Bay Rays.
Sternberg had previously noted that, by their measure, only a quarter of Rays fans actually live in Pinellas County, which has just over 900,000 residents, and that at least a third are in Hillsborough County, home to over 1,250,000 people.
In other remarks that made St. Pete’s viability for baseball sound untenable, Sternberg complained about the lack of business participation from downtown St. Pete companies, and Rays VP Michael Kalt noted that downtown St. Pete is only the 4th largest employment center in the Tampa Bay area – behind Downtown Tampa, Westshore, and even the Carillon/Gateway region. During question and answer after the presentation, Kalt mentioned that strong corporate support exists in each of these locations.
Carillon is home to the most recent stadium proposal for the Rays, sponsored by and located in Pinellas County. Still, the Rays refuse to consider one option until all are on the table. Sternberg also remarked that, according to the front office’s calculations, a new stadium could yield 30,000 fans per game, something some playoff teams failed to do last year.
Kalt was quick to point out the fundamental problem was the location of the current stadium, and described the benefits of redeveloping the 80+ acre property on which Tropicana Field is located. He went so far as to say that if Mayor Bill Foster and the city continue their stalemate, “There is a huge opportunity cost. Keeping us handcuffed to the Trop, it's not doing anything for the taxpayers and people of St. Pete." It was a mantra of the ownership group five years ago during the 2008 proposal for a waterfront stadium in downtown St. Pete, which was nixed by the city.
"Time is not a friend of ours,” Sternberg told the Council meeting, "for inaction. Right now, it’s in my hands, but Major League Baseball is taking an interest.”
Mayor Foster was not able to stay until the end of the meeting, but left a note saying he was available to talk with the Rays Thursday morning. Sternberg’s response? “Maybe.”


3 HUNDO!

 

[Goober]

Obviously the Rays and Athletics are both in desperate need of new stadiums. While my preferred option is contraction, the next best thing is for them to move. I think San Jose and Charlotte would be the best possible locations. Of course this would require the commissioner telling the Giants and Orioles to fuck off, so it won't happen until Bud is gone.

 

[Hasselbeck]

El Paso? :bosh:

Albuquerque shits on El Paso. MLB would work here... About the only pro sport that would

 

[MvP]

Newark

 

[Villain]

El Paso? :bosh:

Albuquerque shits on El Paso. MLB would work here... About the only pro sport that would

Pretty sure the Dodger's AAA team gets decent attendance down there.

 

[Senser81]

LOL at El Paso getting an MLB team. I would expect Gary, Indiana to be #2 on the list, with Fairbanks, Alaska being a strong contender.