Career News 24/7: The Sports Economist

Friday, September 2, 2011

The Sports Economist

Up Next: Birmingham
The Honeymoon is Already Over in Gwinnett
More Death Throes for the Big XII?

Posted: 02 Sep 2011 10:24 AM PDT

Following up on Phil’s post about the shortfall in revenues at the Braves’ minor league stadium in Gwinnett, here is a tale of financial folly that’s about to unfold in Birmingham:

City leaders last week approved agreements and incentives to lure the Birmingham Barons back to town after a two-decade run in Hoover. Mayor William Bell called the publicly funded project an engine for private development around it.

The city’s costs include nearly $60 million to build the stadium and an accompanying Negro League museum and more than $600,000 to buy out the team’s lease in Hoover if the Barons begin playing downtown as expected in 2013.

The revenue from the stadium itself won’t begin to pay those costs, and it’s not expected to, leaders said.

The Barons could gross $3.7 million a year from a contract that gives the team control of concessions and most of the ticket revenue and suite revenue, estimates Jason Klein, a California-based baseball marketing expert. Klein, of 88 Marketing, made his estimates by analyzing terms of the Barons’ lease as well as average attendance numbers for the team.

The city stands to earn about $315,000 annually from the revenue-sharing agreement with the team, according to Klein’s estimates. The city also will receive $400,000 a year in rent.

As the article notes, the projected cost for Birmingham’s stadium is $60 million, substantially higher than the typical minor league ballpark, and about the same as the stadium for the Gwinnett Braves. JC Bradbury predicted the outcome in Gwinnett before the ground was broken. Is there any reason to believe the outcome in Birmingham will be any different? I don’t think so.

The Honeymoon is Already Over in Gwinnett

Posted: 02 Sep 2011 08:39 AM PDT

It wasn't supposed to be this way. A consultant's study used by county officials to justify spending $64 million on the stadium said Gwinnett's demographics and economy made it "one of the strongest markets in the country to support a minor league baseball team." Conventions, Sports & Leisure International estimated the team would average 6,000 to 6,500 fans a game after an initial "honeymoon" period in which attendance might be higher.

In 2009 the team drew an average of 5,858 fans a game – up from 4,455 the previous year when the team played in Richmond, Va.

But the average fell to 4,818 last year and has rebounded slightly to 5,084 this year, with just two home games left.

The Gwinnett Braves rank 24th out of 30 AAA teams in average attendance this year.

Story here. And it was unexpected! I’m not familiar with the area per-se where the Gwinnett Braves play, but having been to numerous minor league games around the midwest in the past 20+ years and having watched a few minor league games on the internet, predicting an average of 6,000-6,500 fans after the honeymoon seems a wee bit high.

More Death Throes for the Big XII?

Posted: 01 Sep 2011 12:52 PM PDT

Yesterday I posted that the Big XII is an unstable conference, but I thought it unlikely that it would dissolve. Perhaps I was being optimistic, but Kirk Bohls has some interesting thoughts about what may come next.

Go ahead, Sooners. Make the last move that sinks the Big 12.

And it is quite possible, in light of Texas A&M’s defection, that your move will be one that politically astute Texas quietly supports while also hoping that it happens quickly. The Longhorns would dearly love the Sooners to take the lead. And much of the heat that comes with it.

Should Oklahoma act upon its earnest desires and seek an invitation to join the Pacific-12 Conference — something I’m fully expecting to happen within days, if not hours — that decision could well be the killing blow to the Big 12 while also providing Texas the political cover to follow suit and ask for admission as well.

…Your new Pac-16 members: Texas, Texas Tech, Oklahoma and Oklahoma State.

The era of the super conference begins.

The Longhorn Network gets folded into the Pac-16 as a downsized regional network, joining the six regional networks that already exist within the conference.

Missouri ends up in the Big Ten or ACC, and Kansas heads to the Big East. If for some inexplicable reason Texas chooses not to pursue Pac-12 membership, look for Texas Tech to be left out and expect the Pac-12 to focus on Kansas and Missouri along with OU and OSU. Don’t dawdle, Texas.

ESPN’s David Ubben posted these tweets this morning which lends creedence to Bohl’s prediction.

Anybody ignoring Oklahoma’s silence on the “We <3 Big 12!” press release front today isn’t paying enough attention.

Things that make you go hmm… RT @Agallion Tech and OSU didnt say anything either

Bohls says it comes down to trust, or more precisely, the lack of it.

Because the Big 12′s options are few, its future is tenuous at best. No one seems to trust anyone any more. Everybody is jealous of Texas’ clout and tired of its flaunting of the Longhorn Network. Most of the Big 12 schools are petrified they’ll be left out. With good reason.

Sports leagues are cooperatives, but Texas never seemed able to grasp that fact sufficiently to stabilize the Big XII. If Bohl’s prediction comes true and Texas ends up moving with OU, OSU, and Tech to form the Pac 16, will it set aside it’s Texas-sized ego for the good of its new conference?

What about the leftovers? It would seem that Kansas and Missouri would land somewhere in a major conference. Missouri’s football program looks as strong as it’s ever been and Kansas has it’s storied basketball program. Yes, this realignment is all about football and moving towards a football playoff, but the Jayhawks would bring a lot of basketball eyeballs to whatever conference KU ends up in.

What about poor Iowa State, Kansas State, and Baylor? If I were the AD’s at those schools I’d be praying like hell and saying all the right things.