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MLB Expansion Is Probably Inevitable, But Where And When?

Illustration for article titled MLB Expansion Is Probably Inevitable, But Where And When?
Image: Jim Cooke (GMG)

Attendance and World Series TV ratings may be down, but baseball fever is alive and well in cities without the erstwhile national pastime. ExposNation says the time is now! Portland’s wannabe owner took Russell Wilson and Ciara on a helicopter tour of potential stadium sites! Las Vegas might be ready to tear down a casino to make way for a ballpark!

This makes a kind of sense. It’s been 20 years since the Diamondbacks and Devil Rays joined the MLB landscape; since then, the overall U.S. population has grown by about 50 million and cities like Austin and Charlotte have nearly doubled in size. And expanding to 32 teams would enable baseball to return to four eight-team divisions with only the regular-season first-place finishers advancing to the HA HA HA no seriously you know we’ll be getting eight four-team divisions with wild cards somehow on top of that, because this is what Fox, TBS, and ESPN have decreed, and you do not tempt their wrath.

On the other hand, well, see above about baseball’s declining popularity. So will commissioner Rob Manfred really be in power long enough to oversee MLB expansion, as he said he hopes he will? Or is this just more blown smoke to keep wannabe MLB cities’ hopes alive, and drum up more leverage for existing teams hoping to shake down their current cities for stadium cash? When will Youppi! be free to pop wheelies again, man?!?


First off, let’s dispense with any concerns that adding more teams would water down MLB’s talent to the point where fans would tune out even more than they already have been. The difference between watching the best 750 players in the world (aside from a few Japanese players who haven’t been posted internationally yet, and maybe some Cubans still waiting for the right moment to defect) and the best 800 simply isn’t that great, especially since you’re hitting the fat part of the bell curve at that point: The last couple of guys on any big-league roster are generally indistinguishable from the best few guys in Triple-A, which is what makes things like the Pat Venditte shuttle sustainable. Besides, we already have a perfect case study of what happens when you flood big-league rosters with not-ready-for-prime-time players: It’s called September, and fans don’t seem to be voting against it with their feet.

Likewise, there are a decent number of cities that, if not crying out to be filled with a team like Washington, D.C. was for so many years, at least wouldn’t feel any less worthy than existing cities at the bottom of the demographic barrel. The short list at the moment includes:

Montreal: There are only two metro areas in the U.S. and Canada with more than 4 million people that don’t have Major League Baseball, and one of those is Montreal. (The other: the Inland Empire east of Los Angeles, which isn’t getting a team because MLB counts it as part of the L.A. market, the Census Bureau’s boundaries be damned.) Though the Expos were considered unsalvageable when they were moved to Washington in 2004, they actually had not-terrible attendance back when the team was still good, drawing more than 2 million fans several times in the early 1980s and headed for close to that mark in 1994 before the baseball strike destroyed the team’s best and last hope for postseason glory. If Olympic Stadium weren’t widely regarded as a pit, or if past attempts at a privately funded replacement hadn’t run aground, or even if the Expos’ original home hadn’t been converted into tennis courts, or if the Canadian dollar didn’t keep plummeting to 75 cents on the dollar every few years, Montreal would be a sure bet for an expansion team, but it is and it did and it was and it does, so here we are.


Portland: This city barely missed out on landing the Expos in 2004, if by “barely missed” you mean “finished second but wasn’t even within camera range at the tape.” As part of that bid, though, the Oregon legislature did approve $150 million in funding toward a future MLB stadium, which is at least a start. But with not even a minor-league stadium in place (the city’s old Triple-A stadium was converted to soccer in 2011) and a TV market size smaller than all but five existing MLB cities (Baltimore, San Diego, Kansas City, Milwaukee, and Cincinnati, if you were wondering), it’s hardly a sure bet for expansion.

Las Vegas: Would be the smallest TV market by far, even if it is growing at an impressive clip. Also, it doesn’t have anything resembling a major-league stadium; it’s crazy hot there, and only going to get crazy hotter, so a pricey domed stadium would be an absolute requirement; and Vegas residents tend to be on the less weathy side. The Golden Knights seem be doing well, though, so as long as a Vegas expansion team can reach the World Series in its first year, all should be hunky-dory.


Charlotte: Did I mention that Charlotte is growing by leaps and bounds? It’s still pretty small, though (just barely bigger than Portland), though its Triple-A team did lead the International League in attendance, so at least it can claim to be better positioned for the big leagues than Buffalo or Indianapolis.

San Antonio: Smaller than you might think (just above K.C. in Nielsen market size), but if you add in nearby Austin, it jumps to a solidly middle-tier market. City officials talked vaguely about providing $200 million toward a stadium when the Marlins rattled sabers about moving there last decade, then backed away when they determined Jeff Loria was just using them for leverage.


Vancouver: Manfred dropped Vancouver’s name this summer as an expansion candidate, but it’s one-third smaller than Montreal and uses the same currency, and likewise lacks a viable stadium even for the short term.

Monterrey: Or Mexico City, or Guadalajara, or other large cities in Mexico. They all have the population, but they’re populations that would be spending in pesos, which are even weaker than loonies. MLB would surely love to tap into the national TV market in Mexico with a team that could build a truly national fan base much as the Blue Jays have in Toronto, but as with the NFL in London this might be a scenario that would be better for the league as a whole than for an individual owner taking the plunge. Would MLB accept a smaller expansion fee just to open up Mexico as a market? Don’t hold your breath.


Any of these cities would be semi-respectable MLB entries—certainly as respectable as, say, Cincinnati, which probably wouldn’t even be considered if it hadn’t already had a team since the Garfield administration. So why have they been waiting for 20 years and counting? Here, we have to leave the realm of demographics and enter that of baseball finance.

At the most basic level, adding two more expansion teams would mean slicing baseball’s national-revenue pie into 32 slices, rather than the current 30. (Adding expansion teams would also mean selling more tickets, but we’re just looking at national revenues here—TV contracts, for example, won’t change just because there are new teams.) Right now MLB gets about $1.5 billion a year in national TV revenues and MLB Advanced Media adds another $600 million or so; slicing off one 32nd of that would mean giving up $65 million a year — so by this math, if an expansion owner would be willing to kick in $1 billion or so, that would make for a reasonable return on investment.


Getting a thinner slice of the national-revenue pie wouldn’t be the only cost to existing owners, though. It also means more competition for postseason spots — when the Las Vegas Baseball McBaseball Faces win that first championship, that means another team will miss out on that big payday that year. Plus, a big part of the value of pro baseball teams is their scarcity—if 32 rich dudes are let into the club instead of 30, that reduces demand for existing teams by some unknowable margin, which is real money out of the pockets of any team owner looking to sell to the next sucker.

On top of this, adding new teams would affect MLB’s revenue sharing plan. The formula for this is wildly complex—there’s a “base plan” where 31 percent of each team’s revenues is divvied up equally among the whole league, plus a “supplemental plan” where another 14 percent of overall team revenues is paid from high-revenue clubs to low-revenue clubs, though low-revenue teams in big markets aren’t eligible, and if your head doesn’t hurt yet go read this and then report back. Suffice to say, though, that adding low-revenue teams in smallish markets—and every single one of the above rumored expansion cities would qualify here—would have a dramatically different impact for big-market teams vs. small market teams: The Steinbrenners would have to cut bigger base and supplemental checks, while their former shortstop would only have to give up a cut of central fund money. That makes this an issue likely to split big-market and small-market owners, which is a great way of ensuring gridlock.


And because adding 50 new major-league jobs is something the players’ union would very much like, it’s certain to get tied up in labor negotiations, if only because even if the owners decide they do want to expand, it’s a negotiating point that they can and will use to extract something from the players.

Finally, letting potential expansion cities lie fallow also has a value to MLB: It allows the league to shake down other cities for stadium money under pain of relocation. (Hardly a stadium was built in the 1980s and ’90s that didn’t involve at least a veiled threat to move to either then-vacant D.C. or Tampa Bay.) Manfred has frequently stated that he won’t move ahead on expansion until the A’s and Rays get new stadiums—something that is, to put it mildly, moving slowly in both cases. And those are almost certainly not going to be the last teams seeking cities to play footsie with in order to jump-start stadium deals at home: Angels owner Arte Moreno has declared a lease impasse with Anaheim, prompting rumors of a move elsewhere, albeit likely within Southern California; the Diamondbacks recently got out of their Phoenix lease early, allowing them to look elsewhere for a new home; and the Red Sox, Cubs, Dodgers, Royals, Blue Jays, White Sox, Orioles, Indians, and Rockies all play in stadiums older than the stadium that the Braves already abandoned last year as too ancient, so you have to figure at least one of them will start looking for sabers to rattle sometime soon.


The next few years, then, will probably remain focused on talk of whether some existing teams should be relocated before expansion is considered. Not that moving teams is necessarily in the cards—Tampa Bay and Miami and Oakland may be saddled with dismal attendance histories, but a move to anywhere other than Montreal would require their owners to roll the dice on a much smaller, unproven market. Talking about moving teams is a time-honored MLB tradition, though, and could forestall any serious expansion talk until well into the next decade.

In short, sports leagues tend to expand not because of cities that “deserve” new teams or because of some underlying capitalist imperative, but because the existing owners find themselves salivating over prospective expansion fees more than worrying over what they’d have to give up. (Former MLB commissioner Fay Vincent once claimed that the Diamondbacks and Rays were only birthed to raise quick cash to pay off the owners’ collusion settlement.) It’s anyone’s guess what crisis will be next to spur baseball to add more teams—the cable bubble finally deflating is one possibility—but if you’re placing bets on when it might happen, you’re probably safe taking the over.


Neil deMause has covered sports economics for more publications than even he can shake a stick at. He’s co-author of the book Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit, and runs the website of the same name.

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