More Teams, More Problems?

By Sean Kennedy (@PhillyFastBreak)

Do sports teams in close proximity to one another help or hurt the value of a franchise?

With all the talk out there about the skyrocketing value of sports franchises, I found it interesting looking at the pitch book Steve Ballmer’s group used to evaluate their purchase price offer for the Clippers. Now, I won’t bore you with EBITDA revenue multiples or any of the more complex financial mechanisms found therein, but one of the more philosophically intriguing ideas can be found on the very last page. The group asserts the notion that the more major sports teams there are in a geographic location, the less valuable each individual franchise becomes. The idea behind that concept is less competition for local fans the higher the population per major sports team.

That one simple page really got me to thinking because I don’t know if I necessarily agree with it. There are certainly plenty of basic underlying ideas that support their claim. I understand if a franchise enters an area that did not previously have a sports team, that only game in town mentality can really foster a rabid fan base. We’ve certainly seen that effect in Portland and Sacramento with Trailblazers and Kings fans. I also realize that bringing more than one team from the same sport into the same basic region will pull some fans away. Some Knicks fans became Nets fans when they moved to Brooklyn and people generally aren’t going to root for both the Lakers and the Clippers, the Cubs and the White Sox, the Giants and the Jets, etc.

You also have to consider the way people would spend their money. At a very basic economic level, more teams in an area means less merchandise sales for a franchise. If a family can only afford to buy their kid one big ticket item for Christmas, they have to choose between the authentic Shady McCoy or Chase Utley jersey. Whereas if there was only a baseball team for the kid to root for, he’d have the entire infield covered before too long.

People also can’t make the time investment necessary to follow all these teams in a lot of instances, as I personally know. I was a fairly big Flyers fan as a kid growing up, but after the 2004-05 NHL lockout, I just found it easier to basically ignore hockey altogether. I just wasn’t able to give the sport the attention I would want to as a fan while being able to follow everything else going on in the world of sports. If the Flyers were the only game in town in Philadelphia, I would have continued to be a diehard hockey fan, and you’d be reading about Ron Hextall’s offseason moves on my website, Philly Power Play.

With all of that being said, I still feel like the sweet spot is somewhere between 2-4 teams, as there are numerous synergistic effects to having multiple sports teams in the area. For one thing, your city earns the reputation as a ‘sports town’, which I have to imagine has some intangible effect in the draw for potential free agents. Also, it draws away some of the ire away from organizations when they’re going through bad times. People are all over Ruben Amaro, Jr. for the dumpster fire that is this Phillies season, but there would probably be picket lines around Citizens Bank Park if fans didn’t have Eagles training camp to get them pumped up. Plus, I don’t think Sixers fans would be as patient as they are with Sam Hinkie’s rebuilding process if watching the d-league squad he put on the floor for 82 games was their only sporting event option in the winter.

Most of all, having multiple teams just seems to bring everyone together. Seasons where more than one team is involved in the playoffs at the same time just seems to bring a palpable energy to the city. Even on a smaller scale, days when you can head to a centralized area, hit up a baseball game during the day, hang out for a couple hours, and then also catch a basketball or hockey game that night is really what it’s all about for some sports fans. I just don’t think you can put a price tag on that sort of thing as an incoming owner.

What do you think? Do you find it’s more advantageous to have less competition from other sports teams in the area or do you see merit in building a sporting community?


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