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MLB Closers — Role Players with Rock Star Reputations

2013 July 9
by Brian Goff

In 1988 for the Oakland Athletics, Tony LaRussa initiated his strategy of using Dennis Eckersley as a 9th inning, only-when-leading relief pitcher – a “closer.” The move helped the A’s and resurrected Eckersley from an over-the-hill starter to Cy Young and MVP winner. The success of the Athletics and Eckersley popularized the practice with it eventually attaining universal adoption across MLB. Specific elements of the Eckersley case made the strategy make sense. He was an aging starter with a lot of inning mileage in his arm. Restricting his innings and making them very predictable so as to ease warming up improved his performance and extended his career while helping the team.  Beyond his case, however, was the the universal adoption of the practice evidence of it’s wisdom or a case of mindless managerial imitation?

Among all closers over the past 25 years, the Yankees’ Mariano Rivera leads the pack as the most celebrated. Yet, one can make a strong case that he has been underutilized. Arguably, Rivera’s most impactful year was 1996, which preceded his use as the 9th inning closer. At that time, John Wetteland filled the Eckersley-esque role. By simple metrics, Wetteland performed very well, leading the league with 43 saves. Rivera’s numbers, however, both conventional and more sophisticated ones, bettered Wetteland while Rivera pitched nearly 70 percent more innings.

Glaring holes crop up in the universal adoption of the closer strategy. Foremost, as in Rivera’s case, it underutilizes great talent. The rationale might be summarized as “this guy is really effective, so let’s pitch him a lot less and only when we are ahead in the 9th inning.” Where else would that kind of thinking fly? LeBron James is killing the other team, so let’s save him until late in the 4th quarter to help preserve leads? Not only have closers become a universally accepted norm in MLB, but the successful ones command very high salaries. Rivera’s salary has rivaled that of the best starting pitchers even though he pitches 3 to 4 times fewer innings. Would a team pay huge bucks for a pinch hitter, even a great one by historical standards? (The fact that by some sabermetric measures, a reliever like Rivera can influence wins by half as much or more than a starting pitcher like Justin Verlander or Roy Halladay only calls into question those metrics. )

No doubt, certain pitchers, even though very effective, may be better suited to shorter relief appearances because of limited variety of pitches, pitching mechanics, or other issues as with Dennis Eckersley. Maybe Mariano Rivera and many other marquee closers fit this bill. Nonetheless, the nearly exclusive use in the 9th with leads defies easy explanation. Why not use the best relief pitcher in the most dangerous, pressure-filled situations? This is how the best relievers prior to the Eckersley era had been employed whether Bruce Sutter, Goose Gossage or others. Predictability of use, and therefore, ease of mental and physical preparation is sometimes offered as a reason, but use in tight games in pressure-filled situations is fairly predictable too.

The highly structured, ahead- in-the-9th inning (once in a while tied) is even harder to understand for teams struggling to win games. Perversely, it limits the best relief pitchers on the staff to situations that arise infrequently, or, else, puts them in “get-some-work-in” situations that matter very little. With the Yankees regular season success over his career, Rivera enjoyed many opportunities that fit the closer structure. However, in playoff series where the Yankees have struggled for leads, Rivera barely appeared. For instance, in the 2011 AL Championship Series, he pitched only one meaningful inning over 6 games (along with 2 others in blowouts just to “get work.”). Imagine any other player or any other sport where you pay a health guy $15 million just to sit on the bench in key situations.


The Sports World is Seriously Ill

2013 June 12
by Skip Sauer

Last night I saw Costa Rica’s Bryan Ruiz pelted with water bottles and who knows what else when attempting to take a corner kick at the Azteca in Mexico City.  I thought for a moment that CONCACAF should impose a ban on future games being played there, before wondering what the consequences of such action might be.  Taking action could be futile or ill-advised, and might make things worse.

Here’s an apparent example of futility.  Two years ago the fans of Olympiakos — a perrenial power in Greece and the 2013 UEFA Champions — threw objects at the players of their arch rivals Panathinaikos in the fifth and final game of the Greek Basketball League playoffs.  As a conseqeunce, Olympiakos was dealt a penalty, being forced to play six home games “behind closed doors in the following season.”

Last night they did it again, throwing flares on the court, and refusing pleas for order.  Their team was losing 76-72 with 1:30 to play in game three of the five-game finals and their team down 2-0.  Deja vu.  The game was abandoned and Panathinaikos was awarded the Greek title (here’s an account from  What will it be for Olympiakos next year?  A 12 game ban?  Will the fans care?

Here’s another inexcusable insult, and an example, as in the Azteca last night, of caution and discretion in taking action.  Tonight it went public that Howard’s Rock, the centerpiece of the gametime ritual of the Clemson Tiger football team, was recently vandalized.  That is very sad news (here are pictures of the rock before and after), and as I am a Clemson partisan, it’s also infuriating.  Perhaps my feeling of fury is why news of the defacing is only surfacing two weeks after the event.  Regardless of who did the deed, until proven otherwise most Clemson fans will think that a fan of their arch rivals, the South Carolina Gamecocks, was responsible.  And South Carolina’s baseball stadium is where the Clemson team was playing in an NCAA regional on June 1, where tempers could have hit the boiling point.  Update:  this was probably not the reason for the slow release of information.  According to this story, Howard’s Rock was intact on June 2, and the incident was not reported to police until June 3, after the Tigers had been sent packing from the South Carolina regional by Liberty.

Caution and discretion, and leniency, may have helped bring us to this ugly place, however.  And that “caution and discretion” may be the prudent course of action in these cases is worrying indeed.

Just over two years ago, Alabama “fan” Harvey Updyke poisoned the oak trees at Toomer’s Corner — the focal point of Auburn football’s post-game celebrations.  The oaks were cut down six weeks ago.  Updyke was released from prison last Friday, perhaps too soon.

The sports world is seriously ill, and I have no idea how to cure it.

MLB’s Best and Worst Managers and GMs

2013 June 11
by Brian Goff

Over the past 40 years, who are the best MLB managers and general managers?   I recently explored this question in an academic piece published in Managerial and Decision Economics.  Of course, one could just take winning percentage or championships won, but where managers have taken over successful teams, continuing that success is not as impressive as turning a team around.  In addition,  some franchises, such as the Yankees, are located in large metropolitan areas and given league revenue sharing practices, can turn this population base into a big financial advantage.  Finally, managerial relationships are hierarchical — the owner answers for everybody, the general managers, typically, makes roster decisions with managers making on-the-field decisions.  The methods that I employed took account of all of these issues using data from 1970-2011.

Interestingly, in comparing managers with GMs, the latter didn’t matter much prior to the 1990s.  Or, at least, very little difference existed between GMs so that one was just as valuable as another.  In the 1990s onward in the “Moneyball” era with much more attention paid to predictive characteristics of performance by some GMs rather than simply how players look in their uniform or the most obvious physical attributes, the general manager role exceeded that of managers in terms of explaining winning and losing.

      Top 10 Managers:

  1. Bobby Cox (Toronto, Atlanta)
  2. Danny Murtaugh (Pittsburgh)
  3. Walter Alston (Los Angeles)
  4. Earl Weaver (Baltimore)
  5. Danny Ozark (Philadelphia, San Francisco)
  6. Tony LaRussa (Chicago AL, Oakland, St. Louis)
  7. Davey Johnson (Cincinnati, Baltimore, New York NL, Los Angeles, Nationals)
  8. Sparky Anderson (Cincinnati, Detroit)
  9. Joe Torre (Atlanta, New York AL, Los Angeles)
  10. Jerry Manual (Chicago AL, New York NL)

Honorable Mention: Ron Gardenhire, Dick Williams, Terry Francona, Dusty Baker

With the recent retirement of Tony LaRussa, none of the Top 10 are still active.  Among the active managers, Gardenhire, Fancona, and Baker head the list.        


      Top 10 General Managers 

  1. Brian Cashman (New York AL)
  2. Bob Howsam (Cincinnati)
  3. John Schuerholz (Atlanta)
  4. Theo Epstein (Boston)
  5. Joe Burke (Kansas City)
  6. Joe Brown (Pittsburgh)
  7. Paul Owens (Philadelphia)
  8. Walt Jocketty (St. Louis)
  9. Al Campanis (Los Angeles)
  10. Haywood Sullivan (Boston)

Honorable Mention: Dan Duquette, Ron Schueler, Joe Gariagiola, Pat Gillick

A natural reaction to this list might be “Cashman has all the money to spend — no wonder he’s on top.  However, his individual contribution and ranking already takes account of the size of the Yankees’ market as well as taking over a team already enjoying a degree of success.  On the other hand, given that Theo Epstein is still active and his new team, the Cubs, are not faring so well, at least so far, his ranking would likely fall with expanded data.

There are some caveats, naturally:  individuals whose careers overlap 1970 do not have their whole performance taken into account.  At the time of compiling the data, I didn’t have GM data farther back.  Even with such data, the comparability of the league over time diminishes.

Here is a link to a draft version of the article on which these results are based.

Correction:  A commenter raised a question about Billy Beane, the Oakland GM of Moneyball fame.  I rechecked my results.  He should have been listed 7th among GMs.  An oversight on my part.

Sir Alex & His Peers

2013 May 29
by Brian Goff

Most U.S. sports fans don’t know who Sir Alex Ferguson is much less his accomplishments as manager of the most highly valued sports franchise in the world,  Manchester United. In his 27 years, the “Red Devils” have won 13 Premier League titles, 2 European Champions League trophies, and assorted English tournaments.  He stands along the most successful and recognizable managers such as Vince Lombardi, Don Shula, or Tom Landry (NFL),  John Wooden or Mike Krzyzewski (NCAA), Casey Stengel, Joe Torre, or Tony LaRussa (MLB), Red Auerbach (NBA), or Scottie Bowman (NHL).  In terms of league titles, Sir Alex exceeds them all.  Of course, their degree of revenue-sharing differs widely across leagues so that such comparisons are relatively crude.

What makes these managers successful for so long?  The individuals listed above achieved success over decades with different personnel.  Even the ones with financial advantages, like Ferguson, far exceeded the success of their closest peers, predecessors, or successors who held similar advantages.  One could read the books by these coaches and coauthors, but the success question  is much more difficult to answer than many might think.  The “how I did it” books resemble the variety of golf swings among great golfers – many unique and noisy elements are folded into the critical and common elements. Furthermore, a new idea, a key player or two, or just lightning in a bottle can make a manager successful for a short time.  In my book, From the Ballfield to the Boardroom, I explored these common elements in more detail.  What stands out includes

Eye for Talent and Its Application: These managers could spot players with skills useful for their teams.  This includes star players along with role players.  Imitators of Vince Lombardi under-valued this contributor to his success and over-valued his verbal abuse.  The skill goes beyond merely recognizing skill players, however, and involves making the best use of them.  Earl Weaver, the longtime Baltimore Orioles manager, liked to say, “I focus on what players can do, rather than criticizing them for what they can’t.”  Of course, part of the job involves seeing where a player has outlived his role.  Alex Ferguson cut loose the very popular David Beckham.

Motivators:  Among long-lived managers, personalities differ a great deal, often, too much is made and too much imitation of glaring, distasteful aspects.  John Wooden, Scottie Bowman, and Sir Alex dealt with players in very different ways.  For whatever reason, players responded to their instruction.  Wooden liked to say, “it’s not what I know, it’s what they do.” Player-management struggles were not part of the equation. Players got with the program or moved to the bench or off the team.  Randy Moss stopped his antics when he signed up with Bill Belichick, and when he started them up again, he found the door quickly.

Inflexibly Flexible:  Most of these managers present a paradox.  There is no doubt who was in charge.  No internal struggles for control, or short-lived ones.  They all held firm ideas about what they wanted to do.  However, over the course of their careers, they bent with trends.  Interestingly, few of them were really noted as innovators.  Innovators sometimes make big splashes, but long run success is more than just a good idea or two.  On the flip side, they adapted to changes in the game.  They didn’t hold on to the past. Various ones adopted a slogan such as “when I’m through changing, I’m through.”  In fact, whenever the adaptation slowed down, the success did also, as one could observe with Bob Knight or Tom Landry.

The Hidden, Unexpected Public Costs of a Stadium

2013 May 21
by Phil Miller

The state of Minnesota has found that it’s expected revenue stream from new e-gambling games will not be sufficient to fund a new Vikings stadium.   The practical problem for the state government to solve is how to get people interested in e-gambling.  The answer is: with a tour of state officials and other vested interests (HT Neil DeMause).

To drum up interest in the electronic games, Allied Charities will launch its tour June 10. Leaders from the Minnesota Gambling Control Board, the Minnesota Department of Revenue and the Minnesota Licensed Beverage Association will be available to answer questions. E-games manufacturers and vendors will also be available, Lund said.

The idea is to let charities get a firsthand look at the products now available, answer questions about installation, customer response, tax ramifications and more, he said.

Roughly 1,200 charities are licensed to sell the e-games in 2,800 bars and restaurants and fraternal halls across the state.

Since the games were launched last September, about 200 sites have made e-bingo and e-pulltabs available to customers.

…“Our hope [for the tour] is we increase money for our [charity] missions by selling more games, which in turn provides more tax revenue for the state, and ultimately we hope enough revenue to pay for the stadium,” Lund said.

Taxpayers were told that the new stadium would not be funded from the general fund, so the state created a new product to tax to fund the stadium.  But why couldn’t e-gambling revenues be put into the general fund?  Not putting them in the general fund is an opportunity cost to the state.

The money spent on e-gambling also doesn’t come out of thin air.  It probably would have been spent elsewhere in the state, probably on something taxable.   Here we have another opportunity cost to the state.

Also, the state officials presumably would have had better things to do with their time rather than touring the state, so time spent trying to drum up interest in e-gambling gives us another opportunity cost to the state.

To paraphrase, there ain’t no such thing as a free stadium.  Anybody who tells you otherwise is pulling your e-tabs legs.


Edmonton Arena Deal Finalized

2013 May 16
by Brad Humphreys

The Edmonton City Council passed a bill yesterday authorizing a package amounting to $480 million in funding for construction of a new arena in downtown Edmonton.  This appears to end more than 5 years of bickering over the financing of this proposed new arena.  This $480 million dollars in financing is assumed to cover the entire construction costs of the facility, excluding land and other related infrastructure like roads, sewerage, and utilities.   The details of the financing are almost too complicated to cover in a blog post, as the financing mix consists of a mish-mash of local, provincial, and private funds from ticket taxes, property taxes, capital improvements funds, and maybe even loose change from the couches in city hall.

Since at least March 2008, the maintained assumption was that this new arena can be built for $450 million.  That cost estimate was in a document, “City Shaping,” produced by the Leadership Committee for a New Sports/Entertainment Facility for Edmonton in early 2008.  “City Shaping” contained no supporting details for this facility cost estimate.  I have seen a heavily redacted version of a 2007 feasibility report by HOK on the proposed new Edmonton arena, but it also contains no useful details about the expected cost of the facility.  I do not know anyone who has seen the supporting documents for the 2008 $450 million facility construction cost estimate.  Like every other sports facility construction subsidy debate I have observed over the last 15 years, the first cost estimate that appears in the media becomes the focus of the debate.  That first estimate assumes a mythical stature.  In the case of Edmonton, the mythical $450 million cost estimate has been the focus of a five year debate on the financing of the proposed new arena.  A few months ago, the estimate was increased to $480 million, in recognition that things could have gotten more expensive over the last 5 years.

I have a couple of thoughts on this agreement as I prepare for a round of radio and TV spots today and tomorrow here in Edmonton.  First, now that the city has come up with $480 million in funding, what are the chances that the structure can be built for $480 million?  In my opinion, it is extremely unlikely that $480 million will be the final cost of the structure.  The final cost will almost certainly be more. The original $450 million estimate is now more than 5 years old.  Arena construction costs are primarily things like steel and concrete, and lots of labor costs.  Raw materials prices are notoriously volatile, but I looked around the Stat Can web site for some information on construction cost changes. Since 2007/2008, the cost of inputs from steel foundries increased about 17%, concrete has increased about 13%, and union construction labor costs in Edmonton increased 15%.  So it seems reasonable to assume that building a $450 million structure spec’ed out in 2008 would cost about 15% more in 2013; $450×1.15 = $517.5 million.  That means the current financing package is still short $37.5 million, assuming that the original 2008 estimate of the structure cost was accurate.

But the 2008 structure cost estimate came from the team, and previous literature indicates that the initial cost estimates that come to the surface in these situations is a low-ball estimate.  Since the team owner is extracting a subsidy from the government, the standard negotiating tactic is to throw out a low-ball first offer, get the local government to agree to that figure, and let the public officials deal with the inevitable cost over-runs.  Here is a link to a recent Bloomberg article summarizing the results in Judith Grant Long’s excellent book, Public/Private Partnerships for Major League Sports Facilities.  She concludes that the final cost of a new sports facility is about 25% more than the initial cost estimate.  If the final cost of the new Edmonton arena is 25% more than the 2008 cost estimate, then Edmonton is still more than $80 million short in financing for the facility.

I have spoken with a number of public officials in Edmonton over the last 6 years about the proposed new arena.  Every time I raised the issue of cost over-runs, the response was always “we will let a contract for $450 million that explicitly states all cost over-runs beyond the contract price will be paid by the builder, not the city.”  My response was always: good luck getting a general contractor to agree to those terms.  We will soon see how easy it is for the city to strike such a deal with a general contractor.  After that, we will see who pays for the cost over-runs.

I also have some questions about the Community Revitalization Levy (CRL) that represents an important portion of the funds for the new arena.  A CRL is the Canadian equivalent of a TIF District.  It generates revenues from the increased property taxes that can be attributed to the new arena.  Property tax revenues increase because the property values surrounding the new arena increase.  According to the Edmonton Journal article linked to above, part of the final financing deal was that an additional”$15 million will be paid by the city through an increase to the community revitalization levy.”  The CRL has been a part of the arena financing deal for years.  Yesterday the city Council managed to find an additional $15 million in revenues from the CRL. I don’t understand how a CRL can be a variable source of public financing.  CRLs generate incremental tax revenues because of increases in property values.  The government cannot control property price increases.  They can control the property tax rate and the assessed value of the property.  But if they could have raised an additional $15 million from the CRL when it was proposed as part of the financing package years ago, why wasn’t the CRL contribution higher back then?

Stadium Improvements in Women’s Athletic Programs

2013 May 14
Comments Off
by Phil Miller

The AP is reporting that the University of Missouri is on its way to building a new softball stadium to house the university softball program.  While the SEC is well-known for its prowess in football, its softball prowess is nothing to sneeze at either.  Depending on what ranking you consider, 5-66 of the current top 10 programs are SEC programs.  If Missouri is to keep pace with these elite teams and remain a perennial top-10 team, it will need to make these kinds of investments.

However, the AP article reports that the current stadium is 31 years old.  That is true of the field, but the stands were installed back in 1998 when the university installed stands at its soccer facility.  The softball field and the soccer field border one another, and it made economic sense to build seating for both fields at the same time.  So while the playing grounds are three decades old, the whole feel of the ballpark is much more modern.

What’s a Name Worth?

2013 May 13
by Victor Matheson

Go to today and you can buy an official Nike “US Soccer” jersey on sale for $78.99. For a mere $35.00, the clothing manufacturer Xara sells a “USA Soccer” jersey that is not licensed by US Soccer but is instead, in their own words, “A Unique Soccer Experience Representing a Country.” Apparently that “US Soccer” trademark is worth about $45.00 per shirt to Nike and the US Soccer.

Total sales of officially licensed merchandise totaled $12.6 billion in 2010 in just MLB, NFL, and college sports alone, so apparel sales are clearly big business in spectator sports. It is in this backdrop that the peculiar case of the Washington Redskins vs. the Federal Trademark Trial and Appeal Board is of interest to economists.

Over the past two or three decades, under pressure from Native American tribes and other petitioners, dozens of colleges and high schools have changed their mascots from representations of Native Americans. While Miami University (Ohio) and Southern Nazarene University both dropped the name “Redskins” in the late 1990s, the NFL’s Redskins have resisted the calls to change their mascot. This may be changing.

The Federal Trademark Trial and Appeal Board, which adjudicates questions regarding trademarks, recently heard a case requesting that the board classify the word “Redskin” as a derogatory slur. If the board deems the term offensive, the team would no longer be subject to trademark protection essentially meaning that anyone could sell merchandise in the team’s colors and with the words “Washington Redskins”. Trademark protection is the barrier to entry that allows teams to charge monopoly prices for apparel (like we saw in the US Soccer example), and the loss of that trademark is likely to drive the premium that the team can charge for officially licensed apparel from the 100% or more mark-up that we typically observe in the market towards the perfectly competitive price – good for consumers, but bad for the Redskins.

While the team’s owner, Dan Synder, say he will “NEVER” (the caps at his insistence) change the Redskins’ name, we will see how long that lasts if the team can only sell “Redskins” jerseys for $45 when they could sell “Washington Red Storm” jerseys for $100.

Tebow’s Freeze Out

2013 May 9
by Brian Goff

Why is Tim Tebow out in the cold? Why are general managers and coaches willing to roll the dice with a QB who has never played an NFL down or a struggling QB versus one who holds a winning record and notched a stylish, memorable playoff victory over the vaunted Pittsburgh defense?

Part of Tebow’s fate falls to timing.   In past posts,  I’ve referenced economist Zvi Griliches iconic article “Hybrid Corn: An Exploration in the Economics of Technological Change”. He demonstrated the acreage planted with hybrid seed took over across states, slowly, at first few adopters, then gaining steam, and finally won over even the die-hards resulting in an “S-shaped” curve depicting the growth in its use. This picture describes the diffusion of most any “technological change” whether a new corn seed, a new tractor implement, black players on Major League teams, or the use of “run-option” quarterbacks in the NFL. In the early stages of use, it’s difficult to distinguish between crazy ideas and brilliant ideas. Almost any new idea will draw vocal detractors, sometimes among people of respect and insight. Numerous NFL insiders, including those as insightful as Bill Belichick and Steve Mariucci, have denigrated the idea of the “option” and QBs suited for it as an integral part of NFL offensive strategy. Even a year or two ago, and in spite of Tebow’s success in Denver, the critique appeared weighty — enough so that the Broncos sought out another QB (albeit, a Hall of Famer) and traded Tebow. With the Colin Kaepernick’s trip to the Super Bowl with the 49ers along with others such as Robert Griffin III, it’s looking less crazy and more brilliant, less temporary fad and more permanent strategy.

I don’t mean to imply that the run-option QBs will ever come to dominate completely. One key difference between sports and agriculture is that one particular technology doesn’t necessarily swamp all others. NFL rules favor passing. Successful teams for many years have employed skilled passers with ever-increasingly complex passing schemes. The trouble is that not everyone can draft Tom Brady or Peyton Manning. The ground in Iowa and the ground in Kentucky may both be receptive to hybrid corn seed, but the same passing scheme that works in New England or Denver isn’t going to work nearly as well in some other place because a key input, the QB, does not have the skills of Brady or Manning. Insightful coaches like Jim Harbaugh and Mike Shanahan decided better to adjust the system to the talent rather than hope that a struggling young QB like Blaine Gabbert (Jacksonville) evolves into a Brady or Manning.

Alright, so Tebow came on the scene just a bit too early, why aren’t teams like Jacksonville scrambling for him now? His less than consistent passing skills hurt him. He can thread the needle on one throw and look silly on the next. Ironically, the GM who turned him out in Denver, John Elway, displayed those same traits for the first half of his career. Nonetheless, Tebow’s passing isn’t as polished as Kaepernick or Griffin. On the flip side, he has shown that he can win games, even against good defenses. A major part of the success of Kaepernick and Griffin is what they do to defensive strategy. At the end of last season, Griffin played a very mediocre passing game against the Cowboys, but because of his running threat (even with a bad knee), his running threat opened the way for his running back, Alfred Morris to have a great night with the Redskins scoring 28 points. The interaction effects between running and passing abilities of QBs with the other offensive players influences both yards gained per passing play along with yards gained by other runners. Tebow’s enormous celebrity almost certainly works against him now. Any GM and coach who bring him on board invite a national media spotlight far beyond what a newly drafted QB will bring. Don’t be fooled — coaches and GMs, in spite of voicing indifference about media and fan attention, care about scrutiny. The care a lot — ok, maybe Bill Belichick doesn’t, but that’s why he is willing to make decisions other coaches will not on matters such as not punting on fourth down. The “Christian” element of Tebow’s celebrity also surfaces as a possible obstacle to him. While I don’t doubt that some coaches, players, and, particularly, media figures roll their eyes at him, there are many NFL players who openly, if with less attention, display their faith. My guess is that his unlucky timing, inconsistent passing, and undesired media attention resolve the conundrum much better.

Maintaining a Credible Threat

2013 May 1
by Victor Matheson

Great article today at Slate from Matt Yglesias about the Sacramento Kings proposed move to Seattle. It appears as if the NBA will try to force the current Kings’ ownership to take a lower bid from a Sacramento group that includes a new publicly financed stadium than a higher bid from a Seattle group that proposes to build a largely privately financed arena. As noted by Yglesias,  “The Seattle bid, in other words, would have set a good precedent for the future of American public policy. And the owners didn’t want that.” I’m not sure Yglesias is exactly right here. There are plenty of examples in the NBA of largely privately financed arenas including those in Chicago, New York City, Boston, Toronto, Philly, and Salt Lake City.

His point about using Seattle as a blackmail threat, however, is spot on. He states, “The owners want to be able to make this move over and over again. ‘Give us a new publicly financed stadium or we’ll move to Seattle’ is a threat that works as well in Portland or Milwaukee or Minneapolis or Salt Lake City or Memphis or New Orleans or Phoenix as it does in Sacramento.” Seattle is a much more credible threat for franchise relocation than Sacramento, so unless the Seattle bid is a whole lot better than the one in Sacramento, having an open city in Seattle is worth a whole lot more to the league than having an open city in Sacramento.

One can see the most obvious example of this in the NFL. While it may seem odd that the NFL doesn’t have a team in Los Angeles, the nation’s second largest media market, in fact, Los Angeles is a credible relocation threat for just about every team in the country. The open market in LA just got the normally quite parsimonious citizens of Minnesota to cough up about $500 million for a new Vikings stadium. The Indianapolis Colts and the New Orleans Saints almost certainly have LA to thanks for their new or upgraded stadiums as well. All in all, LA is probably worth more to the NFL without a team than with a team.