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Ot - best/worst sports markets in the us

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This was in my inbox this morning:

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Wondering where the best/worst markets are for sports franchises

   

Los Angeles and Phoenix are located in adjacent states, but they're worlds apart in terms of sports economics.

Los Angeles is the nation's most appealing site for an expansion or relocated team, says a study by American City Business Journals. The No. 1 ranking is based specifically on Los Angeles' ability to support a new franchise in the National Football League.

Phoenix, on the other hand, is the most overextended market in the nation, according to the study. That means its income base is insufficient for its current teams, let alone new ones.

American City Business Journals analyzed 172 markets across America to determine their economic ability to support additional professional teams in baseball, football, basketball, hockey and soccer. The study focused on markets without a team in at least one of the five major sports. ACBJ publishes 41 local business journals in markets from Boston to Honolulu.

Los Angeles ranks first because of its economic power. Its income base is 13 times larger than required to adequately support a franchise in the NFL, the only league in which L.A. is not represented.

Following Los Angeles on the list of best sites for new teams are Philadelphia, Portland, Ore., Orlando and Houston: Philadelphia, the nation's sixth-largest metro area, is the biggest market not in Major League Soccer. Portland could back a team in any of four leagues, including the NFL, MLS, the National Hockey League and Major League Baseball.  Orlando has more than enough economic clout to support a franchise in either the NHL or MLB. Houston, with a population of nearly 5 million, has plenty of room to add either a hockey or soccer team.

At the opposite end of the spectrum is Phoenix, which has franchises in four of the five major sports, as well as in second-echelon leagues playing arena football and women's basketball.

The study estimated that Phoenix would need another $54 billion in total personal income (TPI) to comfortably support all six teams. TPI is the sum of all money earned by all residents of an area in a given year.

The shortfall does not necessarily mean that any of Phoenix's teams will move or fold. But it is a fairly reliable sign that they can expect continued volatility in attendance and revenues.

Two of Phoenix's franchises, in fact, are finding it difficult to stay above water in their overextended market: The Arizona Cardinals were dead last in the NFL in attendance as of Nov. 11. The Cardinals were averaging 39,200 fans per game. Every other team in the league was above 56,000.

The Phoenix Coyotes ranked next to last in NHL attendance as of the same date.  Right behind Phoenix on the list of overextended sites are Tampa-St. Petersburg, Pittsburgh, Kansas City and Denver.

Descriptions of the 10 most appealing and 10 most overextended sports markets can be found in accompanying boxes. American City Business Journals based its rankings of appealing and overextended sites on income data, as well as several subjective

factors, including each market's history of involvement in a given sport and its proximity to existing teams. The study also produced a precise score, called a market capacity rating, for each area without a pro team in a specific sport. All ratings were done on a 100-point scale.

ACBJ used data on team revenues and ticket prices to estimate that a market needs TPI of at least $54.1 billion to support a franchise in Major League Baseball, the highest figure for any of the major sports.

The least expensive is the Arena Football League, requiring a minimum base of $3.2 billion.

The study calculated each market's remaining capacity for pro sports by taking the area's TPI and subtracting the amounts needed to support its existing teams, including those in second-echelon leagues and major-college football and basketball.

Major League Soccer has the widest range of expansion or relocation options among the five big leagues, according to the resulting market capacity ratings.

Ninety-four areas have scores of 100 for MLS, placing them above the league's minimum income threshold. The list of qualified sites for soccer ranges from Philadelphia to surprises such as Billings, Mont., and Roanoke, Va.

Thirty-six markets have the economic capacity to support a new National Football League franchise, as do 26 areas for the National Hockey League and 20 for the National Basketball Association.

Orlando is the only area to meet the income requirements for Major League Baseball. The Washington portion of the Washington-Baltimore economic area would also have a sufficient base if it were considered a separate entity from Baltimore, which already has a team.

THE 10 MOST APPEALING NEW SPORTS MARKETS IN AMERICA

1. Los Angeles (potential league: National Football League) Los Angeles can't get its NFL act together. It lost the Rams and Raiders, fell to Houston in the subsequent expansion derby, and still lacks a first-class stadium. But Greater Los Angeles has 17 million residents, and our computer says it has enough surplus income for 13 football franchises. If an NFL team were run well, there's no reason it couldn't succeed in L.A.

2. Philadelphia (potential league: Major League Soccer) Philadelphia, the nation's sixth-largest metro area, is represented in every major sport but soccer. MLS would be well advised to correct that oversight, given Philly's ethnic diversity, large television market and healthy economic base. The region's available income is 11 times larger than the amount needed to sustain the typical MLS franchise.

3. Portland (potential leagues: NFL, MLS, National Hockey League, Major League Baseball) The National Basketball Association has been in Portland for more than 30 years. The simple question is who will get there next. Portland has more than enough money to support a football, hockey or soccer team, perhaps even two of the three. Baseball might be too pricey, but remains a possibility. Portland would be the best choice to beef up MLB's presence along the fast-growing Pacific Coast.

4. Orlando (potential leagues: NHL, MLB) Orlando is appealing in two ways. The first is that its residents have enough money to comfortably support another team besides the NBA Magic. The second is that Orlando attracts millions of tourists who have even more millions of dollars to spend. The NHL would be the best fit for the region, but MLB might also take an interest.

5. Houston (potential leagues: NHL, MLS) The NFL returned to Houston this year, but there's still space available for another newcomer or two. The NHL and MLS are intrigued by the large size of the market, which has 4.8 million residents. Each league believes a distinct group within the Houston area would passionately embrace its sport: Northern refugees for hockey, Hispanics for soccer.

6. Charlotte (potential league: NBA) The NBA Hornets were wildly successful from their opening tipoff in 1988. Nearly 24,000 fans crowded into the Charlotte Coliseum game after game, year after year. But the Hornets' owners, in a fit of demographic heresy, fled to New Orleans after failing to get a new arena. Expect the NBA to rectify its mistake by sending a new team Charlotte's way.

7. Grand Rapids (potential leagues: NHL, NBA) Yes, Grand Rapids. Michigan's second-largest city is unknown to the big leagues, but it has made its mark in the minors, supporting farm teams avidly in baseball and hockey, and adequately in basketball. Also impressive is Grand Rapids' income base, which is 80 percent larger than an NHL team would need and 70 percent above the NBA's threshold.

8. Washington (potential league: MLB) Baseball suffers from a shortage of good  expansion sites, but Washington (part of the Washington-Baltimore economic area) is the exception. It's true that two sets of Senators fled town, but the D.C. area is much larger and more affluent than it was in those days. Its Virginia suburbs now boast some of America's highest income levels. A new franchise in, say, Fairfax County could do very well indeed.

9. Las Vegas (potential leagues: NFL, NHL, NBA) Las Vegas is America's fastest-growing metro. Its population soared 83 percent in the 1990s, and now stands at 1.7 million. Topping 2 million by 2010 is almost a certainty. Las Vegas clearly has the money to support a team in almost any sport. The issue is who will take a gamble (weak pun intended) on a city dominated by the gaming industry.

10. Rochester (potential leagues: MLS, NBA) Rochester dropped out of the spotlight in 1957, when it lost the NBA Royals to Cincinnati. But the region has more than 1 million residents, a strong income base, and it's home to major corporations like Eastman Kodak, Xerox and Bausch & Lomb. It also is soccer-crazy, making it especially attractive to MLS. The return of the NBA would be a longer shot, but doable.

THE 10 MOST OVEREXTENDED SPORTS MARKETS IN AMERICA

1. Phoenix (income deficit: $54 billion) Basketball's Suns had Phoenix to themselves for 20 years. Their peace was disturbed when football's Cardinals arrived, followed by a host of others. Phoenix now has six franchises in everything from Major League Baseball to arena football. The area's residents would need an extra $54 billion in annual income to comfortably support all six teams.

2. Tampa-St. Petersburg (income deficit: $35 billion) The Tampa-St. Petersburg area, with a population of 2.5 million, is a mid-sized market by current standards. But it boasts four big-league franchises, which is more than bigger places such as St. Louis and San Diego have. Competition for the sports dollar is so intense that baseball's Devil Rays and hockey's Lightning historically have suffered at the gate.

3. Pittsburgh (income deficit: $33 billion) Recent years have been tough for two of Pittsburgh's three franchises. The National Football League's Steelers seem solid. But the Pirates, even with a new stadium, are poster boys for baseball's small-market woes. And the National Hockey League's Penguins almost dissolved in bankruptcy court a few years ago. Additional teams need not apply.

4. Kansas City (income deficit: $31 billion) Kansas City officials occasionally talk about going after a franchise in the NHL or the National Basketball Association. Either would be a big mistake. K.C. already had - and lost - teams in both leagues. And it's overextended with the franchises it has. The NFL Chiefs are doing well, but the Royals (MLB) and Wizards (Major League Soccer) are struggling.

5. Denver (income deficit: $25 billion) Denver sports fans are rabid, to be sure. The Rockies have led MLB in attendance almost every year since 1993, and the NFL Broncos and NHL Avalanche routinely sell out. But not everyone is prospering. Just ask the NBA Nuggets and MLS Rapids, both of whom are accustomed to playing in front of thousands of empty seats.

6. Milwaukee (income deficit: $21 billion) Milwaukee is the smallest market in big-league baseball, which just happens to be the most expensive sport of all. The Brewers drew decent crowds to glittering new Miller Park in 2001, but attendance plummeted 30 percent in the stadium's second year. The NBA Bucks manage to get by, but they aren't thriving by any means.

7. Cincinnati (income deficit: $19 billion) Cincinnati has baseball and football teams, but is shut out of both winter sports. That doesn't mean, however, that it's an attractive territory for either the NBA or NHL. The Cincinnati metro has just 2 million residents, and its pool of available income is not really sufficient for the teams it has. Add a third franchise, and everyone would suffer.

8. Buffalo (income deficit: $11 billion) Buffalo once fielded big-league teams in football, hockey and basketball - and dreamed of completing the set with an MLB club. Not any more. The NBA Braves are long gone, the baseball fantasy has been dismissed, and hockey's Sabres are slipping at the box office. That leaves the NFL Bills as the city's only prosperous franchise.

9. Indianapolis (income deficit: $10 billion) Storm clouds are gathering over  Indianapolis. The NFL Colts are rumored to be interested in moving to Los Angeles, unless their lease agreement with the city is sweetened. Negotiations are underway. The NBA Pacers, meanwhile, are not a guaranteed sellout, despite Indiana's legendary love of basketball.

10. Raleigh-Durham (income deficit: $9 billion) Perhaps the most ill-advised franchise shift of the 1990s occurred when the NHL's Hartford Whalers packed up for North Carolina. College basketball is the real big-league sport in Raleigh. Duke, North Carolina and North Carolina State all play within 30 miles of the city. That doesn't leave enough fans - or money - for hockey's Hurricanes.

METHODOLOGY

American City Business Journals devised a formula to gauge future expansion or relocation possibilities in professional sports. Here's how it worked:

Markets: Our system was based on total personal income (TPI), the sum of all money earned by all residents of an area in a given year. We used official TPI data from 2000, the latest year for which statistics were available from the U.S. Bureau of Economic Analysis (BEA).

The study covered the nation's 172 economic areas, as defined by BEA. Each area consists of an urban center and its surrounding region. The components of all economic areas are listed at http://www.bea.doc.gov/bea/regional/docs/econlist.htm.

Available income: Our study focused on expansion or relocation potential within seven leagues: Major League Baseball (MLB) National Football League (NFL) Arena Football League (AFL) National Basketball Association (NBA) Women's National Basketball Association (WNBA) National Hockey League (NHL) Major League Soccer (MLS)

We used estimated team revenues and average ticket prices to calculate how much TPI was needed to support a team in each league. Estimated requirements ranged from $54.1 billion of TPI for an MLB team to $3.2 billion for an AFL franchise.

We then calculated each area's available personal income (API) by subtracting the TPI needed to support the market's existing teams. Cleveland, for example, had TPI of $132.1 billion. But its four franchises (MLB, NFL, NBA and WNBA) needed a base of $108.7 billion, resulting in API of $23.4 billion.

API also was affected by the income requirements of major-college programs. All college football or basketball teams that drew at least 60 percent of the average attendance in the NFL or NBA were considered as factors.

Minor-league teams were not counted against a market's API. Capacity scores: Our final step was to determine capacity scores for every area, using a 100-point scale. A score of 100 indicates that a market's income base is strong enough to support a team in a specific league. A lesser figure is a sign of insufficient API. Twenty-six markets, for example, earned 100 points in the NHL category.

Keep in mind that a market's scores for all sports would change if it were awarded a new franchise in one of them, since its API would be reduced. We focused on open markets, which is why we did not produce capacity scores for any area that already has a team in a given league. It's possible that MLB might want to put a third team in New York someday, for example, but it's highly unlikely that the Yankees or Mets would ever allow it.

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:P Houston is building a new downtown arena to house the Rockets and attract a NHL team. The best thing about the arena is that the Rockets will do away with their PJ looking uniforms when they move there. I hope they go back to their red unis.

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In relation to Houston landing an NHL team, I would like to see how sports markets in Canada are faring. At one point, I remember hearing that Edmonton and Calgary were both franchises being looked at by investors in Houston. I am not sure if the NHL would do so well in Houston, but I think MLS would work pretty well, as mentioned in the article.

Great article by the way. I am curious to see what is going to happen to the LA market since NFL officials are tripping over themselves to exploit it. Notice how Phoenix and Indianapolis are both on that "overextended" list.

I can also see Tampa losing the Devil Rays in the near future. That town is all about the Yankees and Buccaneers.

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Notice how Phoenix and Indianapolis are both on that "overextended" list.

Well, the FINAL hurdle has been cleared for the Cardinals stadium, and they're gonna start building it!!!!

Woo Hoo!!!

Here's an article on ESPN:

http://espn.go.com/nfl/news/2002/1204/1471333.html

I'm psyched.  I may fly down to Glendale when they get around to the formal groundbreaking.

Now, if only they had a real team to play in there...hmmm...

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In relation to Houston landing an NHL team, I would like to see how sports markets in Canada are faring. At one point, I remember hearing that Edmonton and Calgary were both franchises being looked at by investors in Houston. I am not sure if the NHL would do so well in Houston, but I think MLS would work pretty well, as mentioned in the article.

Great article by the way. I am curious to see what is going to happen to the LA market since NFL officials are tripping over themselves to exploit it. Notice how Phoenix and Indianapolis are both on that "overextended" list.

I can also see Tampa losing the Devil Rays in the near future. That town is all about the Yankees and Buccaneers.

I am not sure if the NHL would do so well in Houston, but I think MLS would work pretty well, as mentioned in the article.

I think Houston could support both, there are a lot of people living in Houston that come from cities that supported a NHL team and the city has a large hispanic and international population to support MLS. I think the Astrodome would be a great venue for MLS.

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