A major league income shortfall

Analysis shows city would fall far short of support needed for MLB baseball

 

By Erik Spanberg

Charlotte Business Journal

Updated: 7:00 p.m. ET Feb. 5, 2006

 

If the Florida Marlins are serious about relocating to Charlotte, the Major League Baseball franchise will discover a city teeming with strong sports properties, surging center city growth -- and a market that falls $86 billion short of being able to support a big league team, according to a new analysis by Bizjournals.com.

 

The study analyzed 179 markets across the United States to determine if they have the ability to support more professional teams in baseball, football, basketball, hockey and soccer. Bizjournals.com, a Charlotte Business Journal sister operation, used data on team revenue and ticket prices to estimate how much total personal income a market needs to support a pro sports team. A Major League Baseball team, for example, requires an income base of at least $89.2 billion. Baseball is the most expensive of the five sports. Major League Soccer is the least expensive, requiring a minimum total personal income of $16.1 billion. Bizjournals.com estimates the threshold for other leagues: National Basketball Association, $38.4 billion; National Hockey League, $35.7 billion; and National Football League, $33 billion.

 

The study calculated each market's remaining capacity for pro sports by taking the area's total personal income and subtracting the amounts needed to support its existing big-league teams.

 

Local lawyer Jerry Reese recently proposed a largely privately funded $600 million Second Ward project that would include a 40,000-seat retractable roof ballpark. He says the Marlins, long immersed in an unsuccessful bid for a new stadium in Miami, have expressed interest in exploring Charlotte as a home and will send a delegation here this month or next.

On deck?

 

P.J. Loyello, a Marlins spokesman, confirms the Marlins are scouting relocation cities, but he declines to offer any comment on Charlotte. To date, Loyello says, Marlins officials have visited two cities -- San Antonio and Portland, Ore. -- and they plan to visit five more by April.

 

"We're only announcing cities the day before we go," he says. "Our hopes are to stay in South Florida, but we are looking at other sites as well."

 

Reese says he had three extensive conversations with high-ranking Marlins officials, including a 45-minute discussion this week. He declines further comment on the Marlins. Jeff Beaver, executive director of the Charlotte Regional Sports Commission, says his organization hasn't been involved in any planning or talks with the Marlins about a local site visit. "If they're visiting, they're visiting with (Reese). We don't know anything about it."

 

In a broader sense, the specter of Charlotte again serving as a stalking horse -- the Minnesota Twins flirted with a move to the area in 1998 -- conjures a familiar question: Can the Queen City handle a baseball team?

 

Sports marketing expert Max Muhleman, the architect of Charlotte's winning bids for NBA and NFL franchises, says no. And yes. "If you just looked at the demographic data, your first inclination in a cold-eyed view would be to say baseball is 10 years away," he says. "But if there is one thing I've learned with sports franchises, you have to have dreamers. They can speed the clock up. I do think baseball is inevitable in this market."

 

At the same time, Muhleman is quick to point out the importance of having widespread support for a successful franchise bid. From business leaders, political leaders and prospective customers -- the fans. "You can't do these things alone," he says.

 

There are ample reasons to wonder whether the timing is right for a baseball team, even if one makes the more-than-generous assumption that private and public funding could be found to build the Marlins a stadium in the first place.

 

For starters, Charlotte, the 27th-ranked TV market and a small area by pro sports standards, already has the NFL Carolina Panthers and NBA Charlotte Bobcats staking a claim on most of the corporate and sports fan dollars.

 

According to the Bizjournals.com study, those franchises leave just $3 billion for supporting an additional team -- about 20% of what is needed to add a Major League Soccer club.

Greater demands

 

Sports executives say Charlotte can't be viewed as merely a two-franchise town with the Panthers and Bobcats. Strong backing and heavy corporate spending for NASCAR races at Lowe's Motor Speedway and the PGA Tour's Wachovia Championship make those events and venues equivalent to two more major league franchises beyond the NFL and NBA clubs.

 

That point becomes more evident in light of the corporate commitment each generates.

 

For example, Lowe's Motor Speedway has 113 luxury suites leasing for $75,000 to $100,000 annually, comparable to an NFL, NBA or Major League Baseball franchise. At Quail Hollow Club, host of the Wachovia Championship, companies have 125 to 150 options for corporate hospitality, costing as much as $230,000 per year.

 

"In the broader sense, NASCAR and the Wachovia Championship are major-league franchises in this market," says Ed Tapscott, chief operating officer of the two-year-old Bobcats, a franchise newly armed with a $265 million arena that includes 120 luxury-seating options and 2,800 club seats. "Those are successful sports-business models that you can't ignore."

 

Kym Hougham, Wachovia Championship director, and Humpy Wheeler, chief operating officer at Lowe's Motor Speedway, don't dispute the notion, but they offer differing viewpoints.

 

The three-year-old PGA Tour date in Charlotte has attracted sellout crowds of 180,000 since its inception. All luxury seating is sold out, as are sponsorships.

 

"From my point of view, it doesn't appear that there is too much in this market," Hougham says. "We've gotten about a 95% renewal rate, so the demand is there."

 

Wheeler, meanwhile, has had to discount 25% of the speedway's seating inventory in recent years to cope with declining ticket demand, caused in part by economic struggles among NASCAR's core blue-collar fans. To him, the mere hint of expanding Charlotte's sports menu is inconceivable.

 

"We've already got two gallons of water in a gallon-and-a-half pail," he says. "People have to understand we don't have the population of an Atlanta or a Boston or a Chicago."

 

The 16-county Charlotte region, as defined by the Charlotte Regional Partnership, has a population of 2.2 million and includes nine Fortune 500 companies. By comparison, St. Louis, one of the smallest three-franchise markets (MLB, NFL and NHL), counts eight Fortune 500 companies and has a population of 2.7 million spread over its two-state region.

 

Muhleman, the sports marketer, says those comparable numbers, coupled with Charlotte's growing regional population, bode well for baseball coming to the Carolinas. "What you have to remember about franchise relocation is that it takes a team of people and resources," he says. "And that these things happen more on emotion than logic."

? 2006 Charlotte Business Journal

 

 

 

http://msnbc.msn.com/id/11197792/

Television and corporate sales is what decides what is and what is not a prime market for MLB nowadays. Fan attendance adds very little to the ledger and impossible to predict anyway.

 

Richmond, Norfolk, Raleigh, Greensboro and Columbia are sizable markets that a team based in Charlotte could get ahold of. I think they'd do well. Of course, they (or any other city - including Miami) won't get that chance until they pay MLB's established price - a new publically-built stadium.

I could have sworn I read somewhere that Charlotte was one of America's five fastest growing cities. They may be as the article suggests 10 years away, but at their current growth rate they might be ready in 2008.

Being that I am only 2 hours away from Charlotte I can tell you that they are ready for a team there. If a Baseball team came there in a few years they would easily overtake the Bobcats and would compete with the Panthers as the number one team. Also remember that North Carolina is a HUGE baseball state and people that are located anywhere near I-77 could easily get to Charlotte to watch a game.

One thing you'd have to worry about in North Carolina is that you lose some of the pester power from kids involved in soccer and basketball, two sports every bit as popular in the mid-Atlantic as baseball. However, baseball plays to a number of the region's adults, with its representation of american values and father-son masculine bonding.

Also remember that North Carolina is a HUGE baseball state and people that are located anywhere near I-77 could easily get to Charlotte to watch a game.

 

They said the same thing about Florida.

Also remember that North Carolina is a HUGE baseball state and people that are located anywhere near I-77 could easily get to Charlotte to watch a game.

 

They said the same thing about Florida.

 

 

I honestly have never seen Fla as a huge Baseball state. Should it be doing better? Yes it should, but I dont really think that they are on the same level on this one. I see Baseball in the Carolinas as football in Texas.

Also remember that North Carolina is a HUGE baseball state and people that are located anywhere near I-77 could easily get to Charlotte to watch a game.

 

They said the same thing about Florida.

 

 

I honestly have never seen Fla as a huge Baseball state. Should it be doing better? Yes it should, but I dont really think that they are on the same level on this one. I see Baseball in the Carolinas as football in Texas.

 

Wow...just wow.

 

Spring training, hispanic population, displaced northerners (who love their baseball). All the factors are there to indicate that Florida should be a great baseball state, and that Miami should be a power-house market. Too bad that Miami fans (in general) suck.

 

On paper:

 

Baseball in Miami (should be/potentially) >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Baseball anywhere else that currently does not have a Major League franchise.

Also remember that North Carolina is a HUGE baseball state and people that are located anywhere near I-77 could easily get to Charlotte to watch a game.

 

They said the same thing about Florida.

I think you two are a bit off-track. Participation and passion are two entirely different things. Athletes seek out sports where there are opportunities, even if they might not care for the sport as much as another or at all. They may not even care for any sport in the sense of being a fan. I know a couple former jocks that have never seen a game that they did not participate in.

Spring training, hispanic population, displaced northerners (who love their baseball). All the factors are there to indicate that Florida should be a great baseball state, and that Miami should be a power-house market. Too bad that Miami fans (in general) suck.

 

It's not just that they suck. In retrospect, we've learned that their reasoning was flawed. Their assumptions were inaccurate. The continued existence of spring training in Florida offers access to MLB's stars for cheap admission prices. This is one reason why the Marlins and Devil Rays have had to keep their ticket prices artificially low. This is especially true for senior citizens; the working class; Latins who wish to view and/or bring their kid to see the great Latins involved in the quintessential American game; and visitors from inside and outside the state. Meanwhile the displaced northerners and their descendents - a sizable amount of the region's population and huge amount of its affluent population - largely remained loyal to their teams, never warming up to the Marlins, now with help from Direct TV and MLB.tv.

Also remember that North Carolina is a HUGE baseball state and people that are located anywhere near I-77 could easily get to Charlotte to watch a game.

 

They said the same thing about Florida.

I think you two are a bit off-track. Participation and passion are two entirely different things. Athletes seek out sports where there are opportunities, even if they might not care for the sport as much as another or at all. They may not even care for any sport in the sense of being a fan. I know a couple former jocks that have never seen a game that they did not participate in.

 

 

See this is where I dont think you get it. North Carolina has Participation and passion. When the Twins where thinking of coming to Carolina a few years back the place went nuts. The love baseball and they love to watch it. I have gone to baseball games at every level(High School, College, and Different Levels of Minor Leagues) and all the people love to watch the game. I have been in tourneys in High School(Mine is from VA and we sucked) down in North Carolina and we have sold out both the Durham Bulls Stadium and the Charlotte Knights stadium. People in North Carolina love baseball, and they dont really have a main team to pull for(Some pull for the Braves, Yankees, Red Sox) but you put a team there they will root for that team just like they did for the Panthers when they came to town