Data Management Summative
MDM 4U1
Alex Bouma
June 14, 2007
Sporting Cities
Major League Locations
Table of Contents
Title Page…………………………………………………………………………………1
Table of Contents………………………………………………………………………....2
Introduction……………………………………………………………………………….3
Background……………………………………………………………………………….3
Results…………………………………………………………………………………5-11
Future Work……………………………………………………………………………...11
Conclusion…................................................................................................................12-13
Annotated Bibliography…………………………………………………………………14
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Introduction
Each spanning metropolis in North America is uniquely situated with defining
characteristics; things like architectural and natural landmarks, typical weather patterns,
and the predominant cultural majorities that influence the city’s character. While San
Francisco’s “China Town” district is a far cry from New York’s Brooklyn borough, each
city is connected inadvertently through professional sports and the economics behind it.
Every city deemed capable to support a professional sports team becomes a market, and
the market is tapped in accordance with its characteristics. What combination of factors
produces the best location to ‘house’ a professional sports team? Do these factors affect
the team’s performance or are they strictly limited to economic success? These questions
will be addressed and answered mathematically in this report.
Background
Professional sports have been the entertaining byproduct of our developing
culture over the years. The history of professional organized sport has been exciting,
socially aesthetic and memorable. As our culture rapidly evolves, the science behind
professional sports changes drastically. An increasingly consumer-oriented society has
twisted many of the original principals of sports clubs such as sportsmanship and friendly
competition into money driven principals. Fans have become consumers and the game
has become a product that is marketed. Today, it matters less if a sports team has a losing
record. As long as it is profiting economically, its success is granted. Team owners will
completely ignore historical significance to and mutual connections with a city by
relocating a team in attempt to secure profits. Canada has suffered the losses of many pro
sports teams throughout recent history. In 2005, the MLB (Major League Baseball)
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Montreal Expos relocated to Washington DC. In 2001, the NBA (National Basketball
Association) Vancouver Grizzlies moved to Memphis. In two years the NHL (National
Hockey League) lost two of its Canadian franchises to American cities. In 1995, the
Quebec Nordiques left for Colorado and in 1996 the Winnipeg Jets migrated to Phoenix.
Clearly there are factors that make one city a better candidate for a pro sports team then
another. Population alone must be a major primary factor of a team’s economic success
and therefore an incentive to relocate. The difference in population between Phoenix and
Winnipeg is testament to this observation, as Phoenix checks in at more than twice the
size of Winnipeg demographically. In this report, the population of cities will be
measured corresponding to their respective team’s success – both economically and as
defined by a winning record in a team’s respective league.
This report should be a good indicator of whether or not Hamilton Ontario would
be a suitable contender for the Nashville Predators to relocate to. The purchase and
relocation of the Predators is a major issue in professional sports because Nashville has
invested millions of dollars into the franchise and because the club is only nine years
young. Relocating to Canada would go against the current trend of testing American
cities for hockey markets, an expansion that doesn’t seem to be favourable as many
American teams are losing money. Another roadblock to Jim Ballsillie, the owner of
Research in Motion, and his plan to relocate the Predators, is the territorial agreement
both Buffalo and Toronto have with the NHL. This means Ballsillie would be subject to
immense fees should he choose to relocate into a market that the Toronto Maple Leafs
and Buffalo Sabres would argue is already crowded. What are the intentions when
locating a team in a large market? Does a large population actually affect a team’s ability
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to win games, or is it purely an economic advantage for teams to be in a larger market? I
believe that the size of the market in which a team plays determines its economic success,
but has little to do with whether or not the team wins.
Results
The data collected is cities’ populations versus each professional sports team’s
winning percentage and cities’ populations versus each professional sports team’s
economic value. The leagues examined are the National Hockey League, the National
Basketball Association and Major League Baseball. The population data was collected in
2000, so the team records and values were taken from 2000-2001, when the population
would have been very close to the 2000 census numbers.
NHL Facts:
Gary Bettman is the Commissioner of the premier ice hockey league in the world that is
comprised of 30 franchises, including 6 Canadian franchises.
MLB Facts:
Bud Selig
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The National Hockey League
The NHL is profitable, but it seems that only specific markets embrace hockey.
Many southern cities are not able to provide enough support for NHL teams. The NHL
has its major market teams secure, teams such as Detroit, Boston and New York, but its
expansion teams such as Nashville and Columbus are facing bankruptcy.
The first data collected was the population of cities with an NHL franchise
compared to the respective franchise’s Win %.
Figure 1: City Population Vs. NHL Franchise Win %
As expected, the population of a city had little to do with the percentage at which
an NHL franchise won its games. The outlier is the New York Rangers, in a location with
an extremely large population (Manhattan). It is most likely that the quality of the
players, not the population of a city, determines a winning season in the NHL. There was
a miniscule negative correlation calculated at an insignificant -0.05. Next, the data
comparing population to NHL Franchise Value was plotted.
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Figure 2: City Population Vs. NHL Franchise Value
The moderate trend shows that cities with a higher population have more valuable
NHL clubs, or in other words, NHL teams in a larger market tend to be more valuable. A
moderate positive correlation of 0.56 is observable on the data spreadsheet. The New
York Rangers continue to be an outlier with not only the highest population for an NHL
city, but the most valuable franchise as judged by Forbes as well. There are likely more
sellouts due to higher demand for tickets in cities with higher populations, and it is likely
that more revenue is generated from merchandise then the smaller cities. Also, heavily
populated cities are more likely to build larger, greater income generating arenas and sell
out these arenas as well as more seasons ticket holders.
Major League Baseball
The MLB produces consistent revenue under the commissioner Bud Selig.
However, the salaries in the MLB are not nearly as equal as the NHL. Many teams must
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sign a team within a certain budget while a select few have superior spending power.
Teams in the MLB play considerably more games and are worth more than the
average NHL franchise. The average win percentage is slightly higher than the NHL
because the NHL was still using the win/loss/tie format for points. The winning
percentages of MLB teams were plotted against the populations of their respective
cities.
Figure 3: City Population Vs. MLB Franchise Win %
•
No seeable relationship, similar to NHL Win % data
No correlation was expected after the NHL Win % data was plotted, but an
extremely small positive correlation is apparent between a city’s population and the
winning percentage of its MLB team. New York continues will be a Y-axis outlier for the
entirety of this report, but it is important to include New York as a significant anomaly in
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analyzing the data. City population compared to MLB Franchise Value showed
increasingly interesting results.
Figure 4: City Population Vs. MLB Franchise Value
•
Moderate Correlation, possible relationship
There are similarities between the positive correlation in Figure 2 and the results
when the values of MLB teams are plotted against their city’s populations. There is still
no reason to fully believe, however, that the most valuable teams are found in locations
with high populations because a correlation of 0.42 does not prove a complete
relationship. Perhaps the NBA could provide a more convincing link.
The National Basketball Association
The NBA is a highly profitable league under Commissioner David Stern. There
are many opportunities for players to endorse themselves outside of the league as well.
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Cities were once again plotted based on their population and the winning
percentage their NBA teams produced in the 2000-2001 season.
Figure 5: City Population Vs. NBA Franchise Win %
•
Weak correlation resembles findings in Figures 1 and 3
Another weak correlation is produced between the success of a pro sports team
and its surrounding city’s population statistics. The correlation is a weak 0.16. Data
comparing NBA Franchise Value and City Population shows a much stronger
relationship.
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Figure 6: City Population Vs. NBA Franchise Value
This is moderately concise evidence that the more valuable NBA franchises are
located in cities with greater populations. This agrees with the fact that a pro sports team
can be more profitable in a large market.
Future Work
There are several ways to extend this research and analyze it further but more
extensive research and data collection would be needed. For example, more seasons
could be recorded with the population changes for those years to prove if any of the
trends are continuous as the population changes. Collecting all of this data would be
tedious because it took quite long to allot the data for 2000 alone.
A limitation I encountered is that the data is only from one year and one season.
This prevented me from seeing continuing trends over multiple seasons to truly confirm
the results that more sports teams in heavily populated cities are more valuable. Another
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limitation arose in data collection when a city had two sports teams in the same league.
The method I used when I encountered this was averaging the Win % and Value of the
teams and plotting it as a single point. The cities with two teams were always in an area
of heavy population.
The population of a team’s city was also somewhat questionable in this report,
which was a significant limitation to its credibility. The population was recorded as the
city only and not the surrounding area. Some of the smaller cities have a surrounding area
of high population. I would most likely factor this into my next results for this topic.
Conclusions
In conclusion, the population of a city has little meaning to the winning success of
a team – teams in small markets can still win. However, winning isn’t everything in pro
sports today. A winning team is useless unless it generates profit while doing so. Winning
teams that lose money are not secure against bankruptcy and relocation.
A city’s population is related to how valuable the team can be, and this is
measurable and predictable. More people allow for a larger and more diverse market. The
market might last longer and embrace the product of pro sports longer than a small
market city. Large cities can afford larger facilities that generate more revenue, which
can be spent on more marketing of the team. More expensive and potentially more skilled
players can be signed in larger markets, which could lead to a more successful team and a
more exciting product.
In the debate on whether or not to move the Nashville Predators and invade the
territory of the Toronto Maple Leafs and Buffalo Sabres, I believe there is no legitimate
cause for concern. Even though there is a designated market that the Sabres and Leafs
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have in the area, Hamilton can support an NHL team without leeching on Toronto’s
revenue or team winning percentage because there is a market capable of supporting
more than two teams in the Southern Ontario/Northwest New York area. The market is
deep in both size and demand for the sport of hockey. Another team in the Greater
Toronto Area would thrive, but another team in California, a state with many more
people than in the GTA and even Ontario, might not make it.
One limitation is that there is no definite way to measure the demand for a sport
and if it will catch on or not in an untypical location. Major markets are reliable as
consistent revenue producers while expansion teams are a gamble for those willing to risk
losing money. Even though Nashville has a slightly higher population than Hamilton, the
type of market should be analyzed primarily when choosing the spot for a pro sports
team. Overall Hamilton would make a successful location of an NHL franchise based on
my findings.
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Annotated Bibliography
Forbes NBA Team Valuation Charts 1998-2004
<http://www.forbes.com/free_forbes/2004/0216/nba.html>
This flash program conveniently represents an NBA team’s valuation from 1998-2004 by
selecting a team on a drop down bar. It displays the information as a line graph.
Forbes NHL Team Valuation Charts 1998-2004
<http://www.forbes.com/finance/lists/31/2004/LIR.jhtml?passListId=31&passYear=2004
&passListType=Misc&uniqueId=310760&datatype=Misc>
The same type of flash program allows users to select any team and graph their changing
value from 1998-2004.
Forbes MLB Team Valuation Charts 1998-2004
<http://www.forbes.com/static_html/baseball/2004/valuationsFLA.shtml?index=>
The MLB valuations from 1998-2004 are represented on a flash graphing tool.
Andrew’s Dallas Stars Page NHL Revenue 1993-1994 – 2003-2004
<http://www.andrewsstarspage.com/NHL-Business/nhl-revenues.htm>
This web site is a fan site with some very good economic information embedded in its
pages, such as the overall revenues of the NHL over the last dozen years.
Database Hockey 2000-2001 Standings
<http://www.databasehockey.com/leagues/leagueyear.htm?yr=2000>
The win percentages for the 2000-2001 season were calculated from this sight, it just
shows the overall standings for the 2000-2001 NHL season, including wins, losses and
ties.
The Relocation of Sports Teams
<http://en.wikipedia.org/wiki/Relocation_of_professional_sports_teams>
This is an interesting article on the history of the relocation of many professional sports
teams over the years.
Final NBA Division Standings 2000-2001
<http://www.shrpsports.com/nba/stand/2001finaldiv.htm>
This is simply the data collected on the records of NBA teams in the 2000-2001 season
including their winning percentages.
Final MLB Division Standings 2000-2001
<http://www.shrpsports.com/mlb/stand.htm>
This is the data collected on the records of MLB teams in the 2000-2001 season that
included their winning percentages.
All the population data was recorded from Wikipedia.
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