“inches” speech evokes strong emotions. It is what we like to believe sport is all about.
But, it is not by accident that Oliver Stone ends the movie by tying up the loose ends of the business of sport. To the surprise of some, Pacino and his new found star quarter-back move on to a new club – where presumably they have got a better deal. Cameron Diaz got a new stadium deal with the City of Miami after threatening to move the ball club.
The value of teams and stadiums to a city is a constant theme in the economics of sport. The conventional wisdom is that the benefits of a major league franchise to a city are overstated. To date, the majority of the research suggests that major league teams extract resources from cities – frequently in the form of stadium upgrades. But what about the minor leagues? This is where the research of Nola Agha on minor league baseball comes into play.
In a recent article in the Journal of Sports Economics, Agha suggests that there could be some positive impact for teams and stadiums below the level of the major leagues. Agha examined the economic impact of teams and stadiums in minor league baseball. While she found that the impact was insignificant for the majority of cases she did find some positive impact on per capita incomes.
In terms of teams, she found positive effects of AAA teams and A+ teams. She suggested the positive impact occurred because of the isolated nature of teams and lack of alternative professional sporting event experience.
In terms of stadiums, she found that AA stadiums and rookie stadiums had a positive impact on local per capita income. While the direct impact from sport was limited because of low utilisation, she argued that the positive effect arose because the stadiums were utilised for other events, urban development and/or improving the image of the area.
Agha's article is one that is likely to be cited by many a Cameron Diaz as they seek finances for their sports ventures.