The Economic Impact of Stadia and Teams: The Case of Minor League Baseball

This paper uses an extensive unique dataset to investigate the justification of government subsidies for minor league baseball teams and stadiums by measuring pecuniary gains in a local economy. Specifically, a dynamic panel data model incorporating 238 Metropolitan Statistical Areas that hosted affiliated or independent minor league teams between 1985 and 2006 shows that AAA teams, A+ teams, AA stadiums, and rookie stadiums are all associated with significant positive effects on the change in local per capita income. The presence of positive effects is strikingly different from decades of non-positive results at the major league level

Choosing the optimal area of economic impact

Economic impact studies tout the benefits of events like the Olympics and the Super Bowl as well as of facilities and teams. Regardless of the methodology used by researchers, all economic impact studies have one thing in common – they all measure impact on a specific area or “local economy.” One struggle for those commissioning and conducting studies is to define the best area of impact. The area of impact should be representative of the region directly effected by the event. Often, there is no a clear answer. A city, a county, a metropolitan statistical area (MSA), a region, or a state can all be defined as a local economy. The following case studies provide some two examples of events and the repercussions of changing the area of impact

Reputation and the League Standing Effect: The Case of a Split Season in Minor League Baseball

Split season league design resets standings at the midpoint of the season, thus allowing for two periods in which a team can potentially achieve success in a single season. This context allows us to test both the reputation of the first half winner and the league standing effect on demand. Examination of game-level data from the 2010 Southern League reveals fans are unaffected by measures of both team quality and league standing in the second half of the season. On the other hand, the first half winners saw an 11% increase in attendance as a percent of stadium capacity, suggesting that in the second half of the season winners matter more than winning

Is the Grass Greener? Switching Costs and Geographic Proximity in the High Status Affiliations of Professional Baseball

Professional baseball operates a tiered system of talent development facilitated by alliances between Minor League Baseball (MiLB) clubs and higher status Major League Baseball (MLB) parent teams. This study applies management theory to advance the literature on MiLB demand modeling by proposing and testing a new set of demand determinants based on interorganizational alliance principles. Team executives at the AA level should be alert to the high cost of switching team alliances and of changing to a parent club in closer geographical proximity. At the AAA level, affiliation with a winning MLB club exerts a positive effect on AAA demand

A Theoretical Comparison of the Economic Impact of Large and Small Events

In response to the increasing debate on the relative worth of small events compared to large events, we create a theoretical model to determine whether smaller events are more likely to create positive economic impact. First, event size and city size are redefined as continuums of resources. The concepts of event resource demand (ERD) and city resource supply (CRS) are introduced, allowing for a joint analysis of supply and demand. When local economic conditions are brought into the analysis, the framework determines how a city resource deficiency or surplus affects the economic impact of an event. This resource-based approach assists public officials and event organizers in making more rational decisions for hosting events when they pursue positive economic impacts. Specifically, we find small events have a higher potential for positive economic impact and hosting multiple smaller-sized events is a better strategy than hosting a big event

Modeling resident spending behavior during sport events: Do residents contribute to economic impact?

The role of residents in the calculation of economic impact remains a point of contention. It is unclear if changes in resident spending caused by an event contribute positively, negatively, or not at all. Building on previous theory we develop a comprehensive model that explains all 72 possible behaviors of residents based on changes in (a) spending, (b) multiplier, (c) timing of expenditures, and (d) geographic location of spending. Applying the model to Super Bowl 50 indicates that few residents were affected, positive and negative effects were relatively equivalent, thus their overall impact is negligible. This leaves practitioners the option to engage in the challenging process of gathering data on all four variables on all residents or to revert back to the old model of entirely excluding residents from economic impact. From a theoretical perspective, there is a pressing need to properly conceptualize the time variable in economic impact studies

A Theoretical Comparison of the Economic Impact of Large and Small Events

In response to the increasing debate on the relative worth of small events compared to large events, we create a theoretical model to determine whether smaller events are more likely to create positive economic impact. First, event size and city size are redefined as continuums of resources. The concepts of event resource demand (ERD) and city resource supply (CRS) are introduced, allowing for a joint analysis of supply and demand. When local economic conditions are brought into the analysis, the framework determines how a city resource deficiency or surplus affects the economic impact of an event. This resource-based approach assists public officials and event organizers in making more rational decisions for hosting events when they pursue positive economic impacts. Specifically, we find small events have a higher potential for positive economic impact and hosting multiple smaller-sized events is a better strategy than hosting a big event

An Investigation of Highly Identified Fans Who Bet Against their Favorite Teams

Using a mixed-method exploratory approach we describe and explain the seemingly nonnormative behaviors of highly identified fans who Bet Against their Favorite Teams (BAFT). Axial coding of qualitative data from 190 survey respondents and two focus groups indicates the emergence of common themes allowing a typology to unfold that explains the motives for and against BAFTing. Results reveal that Gamblers BAFT for reasons un-related to fandom. Hedgers, on the other hand, BAFT precisely because they are fans; they offset a perceived impending emotional loss with a financial gain, a behavior we identify as Hedging Against Future Failure (HAFFing). This research expands the theoretical knowledge of indirect tactics of image management and introduces HAFFing as a transactional, proactive, and private coping mechanism utilized by highly identified fans to regulate their psychological health. Beyond the implications for researchers of self-image management, these results are applicable to global sport managers adapting to the rising prominence and societal acceptance of sport gambling

NFL Time Management: The Role of Timeouts in End-Game Scenarios

Time management is an important part of game strategy in the National Football League (NFL), especially in the second half of a game that could be decided by a field goal. This paper determines the in-game factors that contribute to an NFL offensive team’s total time taken to reach field goal range during the final six minutes of regulation in games that are within three points or less. Using data constructed from 2009-2011 NFL regular season games, we find that neither quarterback rating nor the number of All-Pro players affect the speed at a which a team reaches field goal range. However, counter to conventional wisdom, using an offensive timeout during the final drive of the game extends the time it takes to reach field goal range by 22 seconds. On the other hand, the mere availability of an offensive timeout decreases the time it takes to reach field goal range by 19 seconds. Both of these effects are found in games where the offense is behind by 1, 2, or 3 points, but not in tied games. These findings inform in-game coaching decisions for an NFL head coach

CONCACAF Strategic Repositioning: Rebuilding Trust in the ‘Beautiful Game’

This case presents the strategic repositioning challenge faced by the Confederation of North American, Central American and Caribbean Association Football (CONCACAF) after a period of leadership and strategy instability. It reports the allegations and findings of misconduct, and discusses the steps taken by the new leadership to define a new mission and strategy