Market Size and Competitive Balance in the NFL and MLB (Part 1)

A few weeks ago, a debate started in the comments section of a post about whether the NFL could ‘become baseball’ if rules such as a salary cap were rescinded.  I’ve looked at the issue before, and concluded that the salary cap does little to foster competitive balance.  Baseball has similar parity numbers to football.  Moreover, revenue sharing is a far more important tool for creating balance than a salary cap.  Ensuring all teams have reasonable revenue streams goes a long way to ensuring that teams will have the money to make necessary moves.

Now I want to take a closer look at just how market size relates to competitive balance in both sports. I’ve broken down the records for all teams in the NFL and MLB since 1995.  The salary cap era in the NFL actually began in 1994, but baseball was on strike and didn’t have a 1994 postseason.  Therefore, I’ve broken down the sports by records between 1995-2010.  Tomorrow I’ll present the data, but there are issues that have to discussed first.

The biggest problem, of course, is that the issue of ‘market size’ is a slippery one. There are lots of different ways to count media markets, and these can cloud the findings.  Is Baltimore one of the smallest markets or among the largest? It depends on whether it’s considered to be Baltimore/DC or just Baltimore.  Green Bay is the smallest market in professional sports, but that’s a completely false image because it clearly draws from Milwaukee (just two hours away). On top of everything else, market sizes change over time, meaning that where a city sits today on the list might not be where it sat 15 years ago. Additionally, MLB is a ‘big city sport’. MLB markets are on the whole, larger than NFL markets, further confusing the issue.  Finally, the designation points between markets amount to arbitrary cut off points (more than 5 million, more than 3 million).  All of this invites debate as to how to define the parameters of the test.

 

So, in order to set the stage for the data, today I just want to look at the methodology of dividing the NFL and MLB into ‘market tiers’. For baseball, the top tier of “Large Market Clubs” is set to include all markets with more than 5 million people:

1. New York (2 teams MLB/NFL)

2. Los Angeles (2 teams MLB)

3. Chicago (2 teams MLB)

4.  Baltimore/DC (2 teams MLB/NFL)

5. Oakland/San Francisco (2 teams MLB/NFL)

6. Philadelphia

7. Boston

8. Detroit

9. Dallas

Right away, we see a problem with how people conceive of ‘large market teams’ in baseball. 14 of the 30 MLB teams qualify as “Large Market Teams”. That’s nearly half the league.  So, when people complain about big city teams dominating baseball, that’s in part because nearly half the league comes from the biggest cities. 

This forces a difficult choice when comparing MLB to the NFL. Do we make the large market designation apply to the 14 largest NFL markets, or do we only apply it to the same media markets?  Either choice is going to skew the data. Ultimately, we are going to have accept that any comparison between large and small markets in the NFL and MLB is going to be an apples to oranges endeavor.

For the sake of this article, I’m going to limit the NFL’s “Large Market” designation to the same markets. That means those same nine markets cover 11 NFL teams, roughly 1/3 of the league.

The second designation of ‘middle market teams’ will bring some surprises.  These markets have between 3-5 million people.

10. Toronto (MLB) Note: I’m not including Toronto with Buffalo for now

11. Houston

12. Atlanta

13. Miami

14. Seattle

15. Phoenix

16. Montreal (ex-MLB)

17. Minneapolis/St. Paul

This ‘middle class’ represents seven MLB teams and just five NFL teams. The designation works well for baseball, bringing the total up to 21 of 30 teams being either large or small market, but fails for the NFL.  This grouping is too small to be effective for the NFL as it would leave 16 of the 32 NFL franchises with the ‘small market’ tag. Because of this, the NFL will receive a slightly expanded group of cities that will qualify as ‘middle markets’. These will NOT be included in the baseball data.

18. Cleveland

19. San Diego

20. Saint Louis

21. Denver

Is that the best solution? I think so. It’s not a perfect one, by any means.

That means that baseball has 70% of its teams as large or mid markets. The NFL has 62.5% of its teams a size large or mid-markets even after the mid-market label was expanded.  There’s just no way around the fact that baseball is fundamentally structured as a big city sport.

Finally, the small markets. For baseball, these are teams with population centers under 3 million:

18. Cleveland (MLB)

19. San Diego (MLB)

20. Saint Louis (MLB)

21. Denver (MLB)

22. Tampa

23. Pittsburgh

24. Milwaukee/Green Bay

25. Cincinnati

26. Kansas City

27. Indianapolis (NFL)

28. Charlotte (NFL)

29. New Orleans (NFL)

30. Nashville without Memphis (NFL)

31. Buffalo (NFL)

32. Jacksonville (NFL)

Any post that sets up the data is going to be less than interesting, but I make a special appeal to those out there that believe that MLB has a competitive balance problem: make your objections to this arrangement in the comments today.  I’m happy to consider different ways of arranging the cities. I’m happy to consider a different list of markets than the one I used.  What I don’t want is to get a raft of objections when I present the data tomorrow.  Let’s work out our complaints today so that we can examine the data fairly tomorrow.  

Right away, however, we can clearly see that the memes about the NFL having good balance because small market teams win often is skewed.  Yes, small market teams win a lot in the NFL, because strictly speaking half of the NFL is made up of small market teams.  Baseball is weighted differently with nearly half the league qualifying as large market.  It’s reasonable to expect baseball to have more large market winners than football simply because of where the higher number of franchises are located.

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