Saturday, October 05, 2002

Radley Balko of The Agitator argues it is a myth that small-market baseball teams don't have a chance by looking at this year’s playoff team. I’ve seen other bloggers link to Balko’s post, so I feel it’s my duty to point out the two biggest errors in Balko’s argument.

The first problem is Balko only looked at this year’s playoff teams. To come up with a true picture of the lack of competitiveness of small-market teams, Balko needed to look at playoff teams since 1995, when the last collective-bargaining agreement was signed. Bob Costas’ Fair Play: A Fan’s Case for Baseball argued that all of the data from 1995 through 1999 showed that big-market teams had a huge advantage in making the playoffs.

The Minnesota Twins making the playoffs this year is absolutely not proof that small-market teams can regularly compete with big-market teams. Minnesota played in the weakest division with other small-market teams. By taking advantage of the weighted schedule, Minnesota’s record against the American League Central was 50-25. A rainout against the worst team in baseball, Detroit, prevented Minnesota from tying Boston for the best division record in baseball at 51-25. Minnesota didn’t even have a winning record against the rest of the American League. Playing on turf in a dome, which is extremely rare in baseball now, gives Minnesota a distinct home-field advantage, and Minnesota did win two-thirds of its home game, tied for best in the American League. But as you might have guessed, Minnesota has the worst record of the eight playoff teams. Yes, a team can get lucky every so often in baseball.

If there is a true anomaly in baseball, it is the Oakland A’s, who have made the playoffs the last three years. Oakland is probably the best run team in baseball, but we all know Oakland and Minnesota will not be able to afford to keep these teams in tact under free agency.

The second problem with Balko’s analysis is he linked to Nielsen Media Research data for metropolitan market sizes, and discussed teams sharing a media market by splitting the market. Since media markets aren’t evenly split by multiple teams and there is overlap, a more appropriate way to look at media markets is this study that estimates the true market size of a baseball team.

But even true market size of a baseball team isn’t the best way to determine who the haves and have-nots are in baseball. The data that really matters isn’t how big the market is, but how much money is actually derived from the local market. This spreadsheet at Major League Baseball shows the local television, radio, and cable revenue dollars for each team for 2001. You can see that the New York Yankees' local media revenue was $56.75 million, which is almost 23% higher than the next team, the New York Mets. Seven teams generated less than $10 million dollars in local media revenues, and 25 of the 28 baseball teams not located in New York generated local media revenues less than half of the Yankees' $56.75 million.

But even local media revenue isn’t the complete picture. The Major League Baseball spreadsheet shows game-receipt revenue and other local revenues. If you look at this money, which is a lot more than the local media revenues, you can very easily guess which smaller-market teams have new, taxpayer-financed stadiums. San Francisco and Seattle are making a killing on their stadiums, and both have made the playoffs two out the last three years.

One last item to consider is the depth of the owners’ pockets. Teams with wealthy owners willing to lose money to win have done well like Arizona, Cleveland, and Florida in 1997 under Wayne Huizenga. Teams without deep pockets or teams with large corporate ownership that demand financial accountability have not done so well.

Baseball has a lot of competitive problems. Ultimately when so many teams consistently don't have a chance to win, it's bad for the entire sport. Kids in small markets are far more interested in football, so the fan base is drying up. To make up for the low ratings and revenue shortfalls, Major League Baseball resorts to doing silly things like expanding the playoffs and designating wild-card teams.