Study finds Connecticut would be attractive to an MLB franchise
Despite being locked between two of the country’s oldest sports markets, Fairfield County would be a more attractive site for a Major League baseball franchise than Milwaukee or Denver, two MLB host communities, according to the latest quarterly economic report from the University of Connecticut.
But don’t buy those season tickets just yet.
Economics Professor Steven P. Lanza, executive editor of The Connecticut Economy and author of the report, recognized his analysis doesn’t address potential procedural objections that ownership of the Boston Red Sox and New York Yankees and Mets might raise to block a new team in the greater Stamford area.
Lanza also said Connecticut’s attractiveness doesn’t guarantee a Major League franchise would translate into an economic success or failure for the surrounding community or for the state.
But in terms of the sheer economic conditions franchises look for when scouting for new prospective homes, the state’s southwestern corner stacks up as well or better than several other metropolitan areas, including at least two with MLB franchises now.
“Hey, it’s not as crazy of an idea as it first sounded,” Lanza said in a presentation of the report delivered at Connecticut Economic Resource Center headquarters in Rocky Hill. “The economics say there is a potential market for it.”
Lanza studied the issue in response to a recent report from veteran baseball journalist Peter Gammons, now a columnist for mlb.com, who wrote that the 2008 American League champions, the Tampa Bay Rays, were rumored to be eyeing alternatives to their St. Petersburg home, where the team struggles to draw large crowds.
“Why would ‘smart people’ eye southern Connecticut as a possible new home for a team from Tampa?” Lanza wrote, the answered the question: The Greater Stamford area stacks up well to a “cold, calculated business analysis” for three reasons: population, wealth and proximity of other franchises.
Of the 30 teams in the majors, one is in Canada and eight others double up in the greater New York, Chicago, Los Angeles and San Francisco metropolitan areas. Therefore, out of 366 U.S. metro areas with populations of 50,000 or more, just 25 host at least one team.
Fairfield County’s population can stack up with smaller competing metro areas, including not only Denver and Milwaukee, but also places such as Columbus and Indianapolis, Lantz wrote.
The Boston Red Sox and New York Yankees have battled for the loyalties of Connecticut fans for more than a century. The New York Mets joined the fray in 1962, five years after the Dodgers and Giants both left the Big Apple for California.
But the success of UConn’s college athletics demonstrates that Connecticut fans do respond to sports teams they can call their own, Lanza said. “There’s this sense of identity crisis,” he said. “Connecticut residents may be starved a little bit for an outlet… for something that provides a sense of community spirit.”
And the UConn study also found that per capita income plays a relatively larger role in determining whether a metro area hosts a team than proximity to competitors does.
Plugging the Stamford region’s numbers into an economic model based on these three factors gives it a 47.6 percent chance of hosting a new baseball team. Other results included: Columbus, 46.5 percent, Indianapolis, 43.2 percent, Milwaukee, 39.6 percent and Denver, 36.4 percent.
But wait one minute.
Lantz conceded one could argue Milwaukee and Denver actually are at 100 percent each, since they host the Brewers and the Colorado Rockies, respectively.
And just because they beat the odds doesn’t mean Fairfield County would, even if officials in Connecticut were on the hunt for an MLB franchise, he added.
The location of new franchises has to be approved by existing team ownership, and “a plan like this could very easily draw vociferous opposition from the Yankees and Red Sox that could stop it dead in its tracks.”
And would Connecticut’s politicians and businesses want to bring a baseball team here? Maybe, if it was guaranteed to provide an economic boom. But Lanza he believes no professional sports franchise, by itself, can offer that guarantee.
“That’s a different question,” he said. “It’s not clear there are the net benefits here, but it’s also not clear it’s a losing proposition.”
Whether a Connecticut baseball team would generate enough economic growth to offset the likely public investment of about $600 million in a new stadium needed to attract a team would hinge on how effectively the franchise could be developed as the centerpiece of an overall tourism attraction, he said.
The average major league franchise grossed $196.6 million in revenue in 2009. But after payroll, taxes, other expenses and depreciation of assets, average net income was $17.4 million, Lantz said. Even if an average annual growth of $9.4 million in team value is added to that, it wouldn’t be enough to match the $31.5 million in annual debt service a city and state might face, assuming it could finance a $600 million stadium at 4.5 percent for 30 years.
The economic answer for Connecticut, or any other destination seeking a sports franchise, lies in whether it attract sufficient restaurants, gift shops, spas, night clubs and other attractions – both inside and outside of the ballpark – to spur complementary economic activity, and “exploit every possible commercial niche.” Lanza said.
New professional baseball parks and other sports stadiums at the top professional level increasingly “are like destination resort areas where you can literally spend the entire day,” he added.
Connecticut has had similar successes, but on a smaller scale, with minor league baseball franchises.
New London attorney Glenn T. Carberry, who led the successful push in 1995 to develop Dodd Stadium in Norwich, which hosted minor league affiliates of the Yankees and Giants – and this year became home to the Detroit Tigers short-season, Low Class A affiliate – said he agrees that Connecticut’s economic features are attractive. But he doubts any MLB franchise could thrive in the shadow of the Yankees, Mets and Red Sox.
“I think certain types of sports can be successful in Connecticut because of the business advertisers and corporate support that is here,” he said. “But to come within the overlapping circles of the Yankees, Mets and Red Sox, I think that’s a bit of an over-reach.”
Even if the economic numbers work, there also are political hurdles to overcome when bringing in a new sports franchise, and Lantz said that is another variable an economic model can’t project.
Former Gov. John G. Rowland convinced the legislature in December 1998 to pledge $374 million to develop a new stadium in Hartford in hopes of luring the New England Patriots to the capital city.
That plan evaporated by spring of 1999 as the National Football League franchise opted to remain in Foxboro, Mass. Dean Pagani, who served as communications director and later chief of staff under Rowland, said he believes the former governor didn’t regret taking the political risk of dealing with Patriots owner Robert Kraft because he truly believed the teams’ presence would have bolstered efforts to commercially revitalize Hartford.
“He believed it would be a boon to the state,” Pagani said, adding the former governor hoped to overcome the 1997 loss of the Hartford Whalers, a National Hockey League franchise that moved to Raleigh, N.C. “This would have been a great way to come back from that loss. He believed it was worth it to take that kind of risk.”
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