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Criteria For Mlb Expansion Cities Essay

1037 words - 5 pages

Criteria for MLB Expansion Cities

Ultimately, there are three exceptionally important criteria for deciding on good candidate for an expansion team. The first criterion is that the stadium must be controlled or owned by the baseball team. The stadium is a crucial aspect because most of the team’s revenue is generated in relation to the stadium. This stadium revenue comprises of ticket sales, parking, merchandise and concessions. Thus, without a stadium, the team will not be able to generate a stable source of revenue. The second criterion is that local ownership must have strong roots within the community. Without ties to the community, fan attendance could decrease. This is because fans ...view middle of the document...

According to Bill Giles, some other factors that are accounted for are “(1) the quality of the ownership group; (2) adequate capital of the ownership group to invest in the initial franchise fee as well as other start-up costs because baseball does not like to bring in owners who have to borrow a large portion of the up-front investment; (3) an adequate facility or the promise of one; and (4) the size of the city, that is, the size of the television market, the number of potential fans, and the number of corporations that can sponsor the club” (Lord 122-3). In addition, geography is important to consider because if the MLB saturates a specific region, the profits and the popularity of the individual teams would suffer due to intense competition. The MLB must ensure that the ownership group has adequate capital to invest in both the initial franchise fee as well as other start-up costs in order to set the prospective franchises up for long term success. All in all, the MLB desires the most promising locations and owners for an expansion franchise to ensure that the league will grow financially as a whole as well.

Repercussions of Expansion

The obvious financial upside to expansion for existing owners is the franchise fee, which is split among the owners. However, there are several downsides of expansion from a financial and a player personnel point of view. In terms of financials, there are two weaknesses to MLB expansion. The first disadvantage is that the threat and power of relocating is lost with expansion. “At the same time, the baseball hierarchy maintains ‘believable threat locations,’ that is, cities without clubs that give teams the ability to threaten to relocate if their current cities do not approve public subsidies for ballpark construction or renovation” (Lord 117). Therefore, if these prospective locations are saturated with new baseball organizations, the MLB owners lose their financial superiority in terms of relocating to more desirable cities. Also, baseball wanted to limit expansion to uphold a high level of competition for potential new teams, thus increasing new...

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