Thursday, September 13, 2007

3rd baseball team in NYC?

Having just read Andrew Zimbalist's book on baseball economics, I got to thinking about what we'll be seeing in the near future.

I think MLB will decide to expand in the next decade for a few reasons:

-with nearly every team in a new stadium, MLB will be looking for new spikes in revenue.

-realizing that MLB needs to compete more intensely with the NFL, NBA, and MLS, MLB will look to make a land grab to make sure that the MLB flag is planted in all of the major metropolitan markets.

-along the same lines of MLB realizing that raw interest in numbers is the best measure of health vis-a-vis the other sports leagues, total "fannies in seats" will become an increasingly important metric for both the owners and advertisers. Expansion could boost annual MLB attendance -currently in the 75M range - by another 4-6MM.

-MLB is also realizing how to take advantage of marquee marketing opportunities, like Daisuke Matsuzaka. Expanding by 2 teams would provide more marquee opportunities.

-with labor peace, the the next or the following MLB-player agreement will need a sweetner. Expanding by 2 teams would add another 50 jobs for the players union.

-adding 2 teams to the current 30 just makes sense. (2 leagues of 16, and probably 4 divisions of 4 in each league.) (I could see expansion beyond 32.)

-all of the traditional arguments about expansion (dilution of the talent pool) are becoming less relevant. It's been 10 years since the last expansion, and the addition of Asian players and an increased talent flow from Venezuela could easily provide enough talent.

And, as I'll explain in a moment, adding one team in the NYC area will provide roughly the same effect of extending revenue sharing.

So, expansion makes sense, and while MLB is famous for NOT doing things that make sense, they are changing that, as Zimbalist points out in his book.

I think that if baseball expands the 2 new teams will go to Portland, Oregon, and northern New Jersey.

Why North Jersey?

The New York MSA covers more than 18M people, while the median MLB city has 3.87M people. New York could probably handle 4 teams.

This surely hasn't escaped the notice of the other MLB owners. I think another driver of expansion will be the sentiments of the 28 other non-New York owners to bring the Mets and Yanks back to the pack, financially and competitively.

The amazing thing is, expanding to the New York area could theoretically happen without any interference from the Mets or Yankees, as a portion of Northern New Jersey lies outside of the teams' territories.

The Yankees' and Mets' territory includes New York City, plus Nassau, Suffolk, Westchester and Rockland Counties in New York; Fairfield County south of I-84 and west of SR 58 in Connecticut; and Bergen, Hudson, Essex and Union Counties in New Jersey. This doesn't include Middlesex county, which while not particularly attractive in its' own right, IS adjacent to Staten Island and at the crossroads of several major roads.

In particular, I'd nominate this location in Woodbridge, NJ, which abuts the Garden State Parkway and the New Jersey Turnpike, and lies less than 2 miles from Staten Island.

This location would represent a very different market than the existing New York teams, perhaps even a new market. It'll take a while for this idea to take hold, but it makes too much sense. The only complicating factor could be the desire of an exisiting owner to move to this location prior to expansion.

For more, read the article linked above.....

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With my new friends on the Great Wall of China

With my new friends on the Great Wall of China
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