Markets that can sustain franchises

If people already had seen this, I apologize. A reporter called me yesterday to ask if I thought Cleveland could sustain its three professional sports franchises. The question arose because of a Portfolio.com article from early December which calculated the ability of cities to sustain franchises.

People at Portfolio.com used total personal income (TPI) from a city net of the minimum income needed to support the existing franchises to produce an available personal income. If this value was greater than the minimum income base for supporting a franchise, then the study concludes the city could sustain a franchise in that sport. The presence of minor league franchises and collegiate teams in a city was not addressed. One could easily question this methodology, of course, as it makes no attempt to control for fan interests or any role for the success of a franchise in attracting fans.

But I am more interested in the suggestions that many cities have the wherewithal to support franchises in numerous sports. Interestingly, only baseball seems to be covering nearly all the viable locations, according to the study. MLB franchises could, the study suggests, be supported in only two additional cities. The NFL, NBA, and NHL, on the other hand, could expand considerably.

Eighteen markets currently outside the NFL have enough money to maintain a football franchise. The National Basketball Association (NBA) has 17 open markets with sufficient TPI, the National Hockey League (NHL) has 16, and Major League Baseball (MLB) has only two.

Forty-two cities without MLS clubs could support a Major League Soccer franchise the study concludes.

At the same time, the study indicates that many cities with franchises are spending beyond their means to support the teams they have.

Nineteen areas are overextended, with Denver, Cleveland, Pittsburgh, and Tampa facing the worst problems. The income bases of these overextended markets are inadequate for their existing teams, let alone any new ones.

If this article is correct, it suggests that there is scope for new leagues to spring up to compete with the NFL, NBA, NHL, and especially the MLS. The history of professional sports in the US is strewn with leagues that have failed, been co-opted by the existing leagues, or been driven out of existence by those leagues.

As we all know, it takes more than a city having the income to sustain a club to warrant entry into the monopoly closed leagues. Existing clubs will require new entrants to add more to their bottom line than is lost by splitting up league-wide revenues more ways, by losing high attendance games against long-standing rivals to play the upstarts, and in expanding the demand for playing talent bidding up salaries while watering down the talent pool. In other words, the good folks at Portfolio.com are not making a case that will lead to cities without clubs getting them.