Major Lessons From the Minor Leagues - Pacific Standard

Major Lessons From the Minor Leagues

There is a measurable economic boost from hosting a minor league baseball team, a newish study finds. What might happen if we mixed in some DNA from English football?
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We know—especially after viewing this graphic in Pacific Standard—what a lousy deal capturing a sports team can be for the municipal purse, especially if building a new stadium is part of the bait. What about a notch down, in the minors? Does having a team or a new stadium repay the rosy visions of small-town boosters seeking government subsidies to lure in a AAA franchise?

According to a study by Nola Agha, an assistant professor of sports management at the University of San Francisco, they just may. Unlike their MLB uncles, having a minor league club in town may bring measurable economic benefits to a burg. To quote Agha in the dry language of economics, “The presence of positive effects is strikingly different from decades of non-positive results at the major league level.”

The biggest beneficiary of this information, however, may not be the next Branch Rickey, but promoters of a peculiarly non-American pastime: soccer. More on that in a bit.

What if minor league ball adopted English football’s relegation—the process in which soccer teams are dropped into a lesser league based on their performance?

Agha’s paper, which appeared online in 2011 for Journal of Sports Economics but which just now appears in the print version of that journal, specifies that an increase in local per capita income, a common proxy for prosperity, is associated with having certainkinds of minor league teams or their associated stadiums in town. This isn’t exactly a chamber of commerce version of Field of Dreams; the boost is “insignificant” in most instances, although unlike the majors, at least there’s no measurable negative impact. Nonetheless, a change for the better is measurable in four situations: when there are AAA and A+ teams (the top and third tiers of play), and when there are AA and rookie league stadiums in town.

On the whole, minor league play has proved both durable and popular in the last few decades after a big decline in the late 1950s and 1960s, a slump blamed (not always accurately) on television. (Karma, of course, is a bitch: the majors were in turn slaughtered by televised football.) But since that decline, minor league ball has seen a series of revivals every decade or so, leading to stories like 1988’s "There's a Baseball Boom in the Minor Leagues These Days" or books like Canadian English professor Jon C. Stott’s 2004 work, Minor Leagues, Major Boom.

Before any putative Babbitts go recruiting for a team, here’s a scouting report on the minors:

Minor League Baseball (MiLB) features 240 teams playing in six countries. (That number doesn’t capture the breadth of the semi-pro and sub-major baseball network, where a number of independent teams and leagues also play ball.) For this study, Agha only looked at the slew of secondary and tertiary U.S. markets served by minor league teams in three AAA, three AA, seven A, two advanced rookie, and 22 independent leagues. She threw out data from the first five years after a new stadium went up or a new team moved in, since previous research suggested newness created a honeymoon boom that would wane.

Total attendance in the last full season was up a smidge, to 48.4 million people, compared to the year before, although attendance per game was off a fraction, according to an annual report compiled by David Kronheim of numbertamer.com. (There are lots of moving parts here, so read the full report for details.) That’s down from the 51.6 million record set in 2008, but well up from the 25.2 million in 1990. Paid attendance in the majors was 74.9 million for last year’s regular season, the fifth highest on record.

And yet these bigger-budget big brothers, according to the “vast majority” of academic research, Agha reports, do not increase local income, employment, sales tax revenue, or spending, and oftentimes seem to be a drag on these metrics. (Interestingly, a 1999 study found that adding a pro basketball franchise to a city did increase per capita income—but adding a new pro basketball arena reduced it!) So how do minors work their economic magic?

They really shouldn’t, as Agha outlines:

Minor league baseball is major league baseball on a small scale. Teams play shorter seasons in smaller ballparks that tend to be located in smaller cities with lower per capita incomes. Minor league teams have operating budgets that pale in comparison to their major league affiliates, they employ fewer people, the salaries they pay are much smaller, and the jobs are mostly seasonal.

And they don’t even have fantasy leagues to give ‘em a boost.

As for stadia, there’s also a sniff test that has to be passed.

“Ultimately,” Agha writes, “it is hard to conceive that an AA stadium that draws an average of 3,837 attendees 70 times a year or a rookie stadium that draws an average of 1,364 attendees 35 times a year could possibly generate enough economic activity to create a measurable effect in the scope of a larger regional economy.” Or, as economics professor Dennis Coates—no fan of stadium subsidies—was quoted in a 2009 Richmond Fed examination of a minor-league-ballpark building boom, “Wouldn’t it be better to have something anchoring development 365 days a year?”

So what gives?

Given the idiosyncratic names of many teams—from the Muckdogs to the Manatees, the TinCaps to the Lugnuts and the wildly popular IronPigs labor—if nothing else there’s a fortune to be tapped in merch. (Full disclosure: I proudly own a Carolina Mudcats T-shirt, even though I’ve never been with chaw-spitting distance of Zebulon, North Carolina.)

Not as enamored of souvenirs as I am, Agha speculates that teams may bring in out-of-town visitors and capture a local clientele starved of other options, whether because of cost or geography. And when stadiums contribute, she suggests it’s because the facility is used for more than just minor-league baseball, such as sharing with the local college team or using it for concerts; that the stadium is part of a successful urban redevelopment; it provides a genuine boost to civic self-image; or, for many of these teams deep in the sticks, this is literally the only game in town.

Every time I used to go see the Fresno Giants play, in a weird coincidence it was quarter beer night. I’ve since moved away from Fresno, and have only been to the city’s swank new downtown Chukchansi Park, home to the triple-A Grizzlies, once: to see a triple bill featuring Bob Dylan, John Mellencamp, and Willie Nelson.

SO WHAT ABOUT SOCCER?
Agha suggests there’s nothing necessarily unique about baseball that accounts for this minors miracle. She speculated that similar effects might be seen in North American hockey minor leagues or in English soccer: “English football, for example, has over 140 leagues in over 20 different levels. Many of these teams are located in cities not dissimilar to minor league baseball cities, suggesting a positive effect may exist there as well.”

What if minor league ball (I'm not brave enough to suggest adding the majors) adopted English football’s relegation—the process in which soccer teams are dropped into a lesser league (or raised into a higher one) based on their performance? Look at recent history—a little guy like Wigan can topple powerhouses like Manchester City for the F.A. Cup on a Saturday and be relegated three days later—and imagine the potential glory of every prestige-hungry city hosting a team. It certainly works for college hoops during March Madness.

And while the canard that Americans just won’t take to soccer still resonates, the valedictions greeting David Beckham’s departure from the sport recall his (possibly) tonic effect on U.S. soccer. Witness this from the Christian Science Monitor:

In the end, Beckham's five years in the U.S. coincided with a flourishing of the sport. The league expanded into new and wildly successful markets from Toronto to Seattle. It went from paying for its games to be on TV to signing a national TV deal with NBC Sports. And it found a viable business model with the construction of soccer-only stadiums across the U.S. and Canada.

Perhaps widespread minor-league soccer (building off the existing American soccer pyramid) could be an economic driver for suburban and rural America. At least, that could be a goa-a-a-a-al.

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