The Sports Economist

Labels: Major League Baseball, statistical innovation

Seattle’s Major League Soccer expansion team has already landed more than 30 sponsors with only a few weeks to go before the season opener in March. That includes deals with Virginia Mason, QFC and a blockbuster deal with Microsoft worth a reported $20 million that will have the Sounders’ green jerseys emblazoned with the Xbox 360 logo.

The Sounders have sold about 20,000 season tickets, which eclipses the number sold by the 32-year-old Mariners team, which estimates it will sell about 14,000 by the start of the season.

Of course, the Mariners play more than four times as many games as the Sounders, and an M’s season ticket therefore costs much more. Plus, the recently announced return of future Hall of Famer Ken Griffey Jr. could give Mariners marketing a big bump.

So far the Sounders have drawn 28,000 to 32,000 for their games. By comparison, the LA Galaxy led reported MLS attendance last year (from Soccernet) at 26,000 per game with about half of the 14-team league drawing over 15,000 per game. As the excerpt mentions, the total expenditure for 81 regular season baseball games exceeds that for 18 soccer matches. The total is about a 3:1 difference according to the article.

I'm not so concerned with whether soccer has "passed" baseball in Seattle, but the fact that it has pulled up into the same neighborhood says something positive about soccer's growth but negative about baseball's long, slow decline from its former position as king of U.S. sports. Baseball has been both the beneficiary and victim of television. TV has raised salaries in baseball as in all sports but it has also boosted other sports, football in particular, relative to baseball and may have created incentive problems.

Has baseball hitched its wagon too closely to TV over the years? Certainly, baseball does not want to go into TV purgatory like the NHL. However, TV's contractual horizon and MLB's long term horizon do not necessarily dovetail. Boosting short-run TV ratings and revenues over the last 30 years with World Series games going into the early morning hours in the east may not boost long term interest in the game. One writer noted that the trend has been longstanding now -- even Carlton Fisk's famous homer in the 75 series came after midnight ET. Here's a Ron Fimrite piece from SI.com in the wake of last season's Phillies-Rays closer-to-dawn-than-sunset finish.

Labels: Major League Baseball, soccer

Labels: Major League Baseball, new stadium, stadium subsidies

Labels: Major League Baseball, ticket prices

Labels: attendance, Major League Baseball, ticket pricing

For the 455th consecutive time last Wednesday afternoon, 96-year-old Fenway Park in Boston sold every seat for a Red Sox game, tying baseball's record.
At the same time that Boston's Daisuke Matsuzaka was throwing his first pitch before 37,373 paid customers, Florida Marlins pitcher Chris Volstad was throwing one at 21-year-old Dolphin Stadium before 584 fans — counted by the players themselves.
That's all you need to know to understand why government's frenzy to waste half a billion dollars to build a Marlins stadium is off base.
As auto dealer Norman Braman plays his hand in court as the only public figure willing to buck the giveaway, the Marlins play to the smallest attendance in baseball, by thousands, day after day.
Even the Marlins' pitiful average of 16,576 paid through last Wednesday's game is suspect, because while players were counting 584, the Marlins were reporting an "official" 11,211 — though that's still far less than a third of capacity. Whether almost nobody bothered to use their tickets to see a team fighting for a title or the Marlins were fudging numbers, who knows?
What is perfectly clear is that few show up. No new stadium would change that.

Labels: Major League Baseball, stadium subsidies

Thomas T. Roberts, a prominent arbitrator best known for his mid-1980s ruling that major league baseball club owners had improperly colluded to prevent free-agent players from obtaining richer contracts, died last Wedenesday. He was 84.

Roberts (Loyola University, Loyola Law School) was fired twice by Major League Baseball management for issuing rulings in favor of the players. In 1986, he ruled that teams could not negotiate drug-testing clauses with players individually; they had to deal with the players union under the collective bargaining agreement.

After being reinstated, Roberts issued his most famous ruling in the baseball case widely-known as the “collusion case” in which he found that, following the 1985 season, no teams had sought to sign free agents unless their old clubs had lost interest in them. He termed that “a strong indication of concerted action,” something prohibited by baseball’s collective bargaining agreement. Roberts was fired again by management. But in 1990 his ruling was vindicated when the owners agreed to pay affected players $280 million plus interest to settle the collusion cases.

Labels: arbitration, collusion, Major League Baseball

The Kansas City Royals have raised ticket prices for next season by 15%. This announcement comes on the heels of another not-so stellar season. It also comes after taxpayers in Jackson County* approved a tax increase to help pay for renovations to Royals Stadium. So given that background, it's no surprise that Royals senior vice president of business operations Kevin Uhlich has trotted out that good ol' war horse:

“Dayton Moore’s mission is to make this into a contending team again. We haven’t been to the playoffs in 22 years. To get back there, we needed to improve our international presence, our scouting, add minor-league teams. This requires money, and frankly, we couldn’t do that with our present budget.”

We sports economists are skeptical about such claims about the connection between ticket prices and player/scouting/etc. payroll. A more likely claim is that there is correlation between ticket prices and payroll, but no causal relationship. Both are driven by an increase in demand for the game. This increase pushes up ticket prices and it increases the demand for players etc. which, in turn, drives their salaries upward.

Colleagues Ken Park, Soonhwan Lee, and I have a paper that we are revising that looks at the long-run elasticity of ticket demand of individual baseball teams using an attendance time-series demand model for several Major League Baseball teams (rough draft here. I hope to have a revised draft up soon). We estimate the Kansas City Royals have a long-run elasticity of demand of 1.46. If so, then without an increase in the demand for tickets, an increase ticket prices generates less revenue for the team, not more.

So something doesn't add up. Could it be that Kansas City is simply seeing a surge in demand for their games, a surge that seems to be league-wide for the most part, even given how poorly the Royals have played over the recent past (0.426 WPCT in 2007, 0.383 in 2006, and 0.346 in 2005 along with last-place finishes in the AL Central in each of those years)? They drew less than 18,000 fans per game in 2005 and 2006 but almost 20,000 fans per game in 2007. Could it be that they are simply adjusting their prices towards some equilibrium in response to a demand shift?

*Jon Meyers noted in the comments that it was the voters of Jackson County, Mo. that passed the tax increase to renovate Kaufmann Stadium, not Johnson County. I have made the correction and I thank Jon for noting my mistake.

Labels: Elasticity of demand, Major League Baseball, ticket prices

While many pundits expound on the Mets' phenomenal collapse and the Phillies' race to the top of the NL East, few had paid much attention to the rise of the Rockies to claim the NL wild card spot. The Rockies won 14 of their last 15 games, the last 14 of which came against division brethren. More importantly, those 14 were against teams that finished with winning records. You can't say that about the Phillies. You can't say that about the Cubs. You can't even say that about the Mets, which makes their collapse even more mind-boggling. Give the Rockies their due. They had a great finish to the season against some tough customers and they had a miracle comeback last night.

Unfortunately that finish will come with an asterisk in the minds of some. It looked to me as if Matt Holiday did not touch home plate to score the winning run in the bottom of the 13th. His hand clearly was knocked off the plate by Padre catcher Michael Barrett and Holliday's hand was blocked from the umpire's view by Barrett's foot. The umpire, judging by his delayed and casual call, wasn't sure if he touched home plate. If he did, it was by the oil on his fingertips and it is tough to see how the umpire can give the benefit of the doubt to the Rockies. Maybe this is evidence of home team bias on the part of the umpire. Had the game been played in, say, the Canary Islands, would the call have been reversed? We'll never know. Likewise, we will never know how the game would have played out had Holliday been called out.

Still, it was an exciting game and a great conclusion to the Rockies season.

Labels: Colorado Rockies, Major League Baseball, San Diego Padres