The Major League Baseball Expansion Paradox

If 2001 to 2005 taught us anything about Major League Baseball, it was that the league had a huge demand. As then-commissioner Bud Selig and the owners floated the idiocy of “signing” the 28ers by shutting down the Montreal Expos, and possibly the Minnesota Twins, whether it was legal action to thwart it, or the idea that relocation was a more appropriate option, markets across the states jumped. United suddenly said she was going to take a team.

In 2005, this culminated in the Expo moving to Washington, D.C. where it was renamed the Washington Nationals. The rest, as they say, is history.

Since then, Rob Manfred has taken over as commissioner, and MLB — with its frequent business deals with players, the possible exception — has settled into a steady groove. Revenue continued to rise. The only thing that has grown is the number of clubs in the league.

In October 2015, I met Manfred Where the topic of expansion appeared. I had a keen interest in how MLB would handle relocation and potential expansion dating back to the 2001-2005 time frame since I had worked with baseball boosters and the city of Portland to try to build a stadium for a team.

Manfred has said repeatedly that he sees MLB as a growing industry. The idea of ​​32 clubs in the league has come up time and time again. Be that as it may the athletewith a recent series on markets that have shown interest, or have returned 2012 for Baseball Bulletinor 2019 for baseball americaMLB’s expansion has more than its fair share of information as fodder for fans and those looking to lure clubs into their home markets.

Remove who would be preferred. Remove what is the “best” market. If one looks across the United States, Canada, and Mexico, many markets can support a club that provides adequate market size to fill ballparks 82 dates annually. They all have different levels of institutional entities of local and regional sponsorship. And there are enough reinforcements to shoot, “Hey! They’re looking at us!” Campaigns of varying maturity.

Healthy baseball. Markets can support an expansion team. So why is MLB stuck in a paradox that makes the idea of ​​expansion at this point potentially more difficult?

To start, unlike a transition, where clubs have owners in place that have already been approved by the league, be it former MLB player and player agent Dave Stewart in Nashville, ex-Nike
CEO Craig Cheek in Portland, or William Jegher and Stephen Bronfman in Montreal The biggest wild card for baseball fans looking to attract an expansion team is whether they end up being more than a minority owner. A modern MLB stadium, with a retractable roof, could cost close to $2 billion to build. And with the model of MLB owners building “ballpark villages” like the battery around Truist Park for the Braves becoming more popular, the cost is more than twice that. It’s very difficult to push the $2 billion expansion fee to $2.5 billion, and get the capital stack together to make the project fly.

Even then, money problems can be overcome. The return on investment for clubs in the major sporting leagues is staggering Forbes Ratings come out every year, along with revenue that is growing and seems impervious to stagnation factors. The issue is getting it all together – investment money, public funding, support from local, regional and international politicians based on “it might happen”.

None of the baseball boosters or political leaders, or for that matter, Rob Manfred and the 30’s Baseball owners have any idea when the trigger will be pulled for expansion at this point. And even if Manfred and the league decide to officially open the markets to exploration, no one will be selected during the process before the stadium site and facility are funded. The league will always encourage the markets because the truth is, what each market learns; or what each booster set puts, Do you help. What the league won’t say is, “You’re the only one. If you keep going like this, the selection process is wired for you to win the day.”

This isn’t shy of MLB, though political leaders will tell you in the background or on the records, that’s what they believe. In fact, there are 30 owners, which means 30 different points of view. The question is whether there are 75% of them who agree with a market – and remember there has to be two to balance the league.

While there are markets in the US that can support the club, the reality is that all of the large markets have been eaten away. This means that the expansion club can be part of the revenue share. And even if it’s not, it takes the 30-owner’s central revenue pie and adds extra mouthfuls to eat.

But perhaps the biggest problem is the latest.

Sinclair-owned Diamond Sports Group, branded as Bally Sports Regional Sports Networks, on the verge of bankruptcy. While the league would like to see contracts fulfilled in full, it is possible in the Chapter 11 restructuring that negotiating a lower rights fee could be necessary. But even if the clubs acquired all or part of them. or if direct-to-consumer model Regional sports network revenue is likely to decline, not just for Bally Sports, but as other RSN deals come up for renewal as subscribers to traditional linear TV are laid off as consumers move to streaming options.

Expansion markets in the United States will need to strike media deals in which every part of the country is already claimed by one or more MLB franchises. The idea of ​​media rights cannibalizing existing franchises at this precarious point in the media landscape is bound to drive many owners away from the idea of ​​expansion at this time.

Thus, MLB has a paradox. It is a multi-billion dollar industry that sees exceptional health on an enterprise level. On the surface, expanding would be a no-brainer. But looking deeper, expansion — with its media rights challenges and extraordinary costs — seems a bridge too far at the moment. At some point, that happens. right Now…? Almost certainly not. Within a decade…maybe.

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