Sports Economics: Current Research

By John Fizel; Elizabeth Gustafson et al. | Go to book overview

4
Emerging Markets in Baseball: An Econometric Model for Predicting the Expansion Teams' New Cities

Thomas H. Bruggink and Justin M. Zamparelli

Recent expansion in Major League Baseball (MLB) and announced plans for future expansion have created interest in the selection process for the host cities. According to the Major League Expansion Committee, the three criteria for evaluation of applying cities are: (1) market factors, (2) the financial backing of an investment group, and (3) stadium plans. 1 This study is concerned with the ultimate factor for long term franchise success under the current financial arrangements. Although location of business expansion has long been a topic of interest, the baseball industry has unique elements that force one to re-examine traditional location theory.

In this chapter we build an econometric model that uses market data on current and potential franchise locations to identify those metropolitan areas that are most deserving of inclusion in the next round of expansion. 2 Although we use this market viability model to identify emerging markets, it can also evaluate current problems in "small market" cities. A market viability model can also identify current home cities in which the team are predicted to do poorly. Thus it can be used in conjunction with a revenue sharing plan to distribute revenue among the teams.


BACKGROUND ISSUES

MLB owners and officials must consider market demand when making an expansion location decision. There are a variety of factors that contribute to this demand, including population, consumer incomes, corporate financial backing, identity as a sports town, and distance from other existing teams. This last factor is somewhat unique to professional sports given the monopoly positions of sports leagues. In MLB, an expansion team will not be permitted to locate in a metropolitan area that is considered to be part of an existing team's territory even if the other factors indicate an attractive location opportunity.

Hotelling's retail location model ( 1932) is based on the assumption that consumers

-49-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
Sports Economics: Current Research
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
/ 252

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.