Population Statistic: Read. React. Repeat.
Monday, July 16, 2021

It’s amazing to me how hockey columnists like Scott Burnside can’t figure out why Gary Bettman is preventing the Predators (or any other NHL club) from relocating to southern Ontario.

There are a couple of reasons. The more minor one: The now-favorable exchange rate between the Canadian and American dollars — which is doing more to level the league’s competitive field than the salary cap is — isn’t likely to last. Which means one more floundering Canadian team to have to subsidize in the near future. (This is a topic to delve into more deeply some other time.)

But the more concrete reason is that, when it comes to major-league sports, you don’t over-saturate your markets. And plopping another team in Hamilton or Kitchener-Waterloo — stone’s-throw distance from Buffalo and Toronto (and not even that far from Detroit) — effectively constricts the NHL’s presence, both regionally and continent-wide.

But no need to believe me. The National Football League itself encountered this very same dynamic some thirty-five years ago, just after the NFL-AFL merger was completed and further expansion was being contemplated. The football guys commissioned a report, “Socioeconomic Information on Candidate Areas for NFL Franchises”, delivered in December 1973 by Stanford Research Institute (now known as SRI International). It amounted to a detailed map of the football market outside the NFL’s 1973 boundaries.

The thought process of the Pete Rozelle-era NFL was dissected in David Harris’ 1987 book “The League: Inside the NFL”. Unfortunately, the book’s long out of print, and doesn’t appear to be online anywhere. But I’ve got a dog-eared copy, and the relevant section is reproduced below, with my notes:

At NFL direction, SRI made a preliminary investigation of twenty-four possible locations and then went into fourteen of those in detail. Of the cities investigated, ten seemed promising.

Of those ten, SRI identified the weakest expansion candidates as Honolulu, Hawaii and Birmingham, Alabama. The next five cities were deemed more promising as NFL cities, based on their current and trending demographics in 1973: Seattle, Indianapolis, Tampa, Phoenix, and Memphis. Given that four of those five cities eventually did land NFL clubs (and even Memphis temporarily hosted the Tennessee Titans, before they settled in Nashville), it’s safe to say that SRI knew what it was talking about.

However, when it came time to make the final recommendation for professional football best bets for expansion, SRI made a somewhat startling choice: The NFL’s most lucrative backyards.

Stanford Research Institute’s conclusions were simple: “According to all the economic and demographic criteria studied, the New York [Nassau and Suffolk], [Greater] Chicago, and Los Angeles [Anaheim] areas rank substantially above all the candidate areas, even when data are divided by two or three to account for a shared market.”

The demographics detailed by SRI presented the football monopoly with two fundamental dilemmas, both of enormous longterm consequence. The first was implicit in the size of the market SRI located. Even after adding two more franchises, some twenty-two percent of the NFL’s potentially profitable franchise outlets would remain fallow and the NFL would continue to be significantly smaller than its market… The principle question, as [the commissioner’s office] saw it was to choose from among the current options in a way that “strengthened the League and made it more truly national.”

The second of the NFL’s dilemmas was crystallized in SRI’s somewhat unexpected conclusion that the NFL’s best option was to put more franchises into its current three largest markets. But despite their independent size, Nassau, Greater Chicago and Anaheim were all still “suburbs” according to the terms of the NFL’s monopoly, and hence not significant enough for membership. In the long run, this stance would insure that the largest untapped markets for live football were not only frustrated at lack of inclusion in the NFL but even further frustrated by the lack of consideration at all…

Thus, the possibility of more franchises in the New York, Chicago and Los Angeles markets was summarily dismissed. The purpose of expansion was to extend the League’s monopoly, not reduce it.

“SRI did a good job,” [expansion committee member Dan] Rooney explained, “but they didn’t consider all the factors.”

In a nutshell: You don’t tend to the long-term health of a sports league by effectively imploding it thusly. Jim Balsillie’s efforts to move a team north of the border have been seconded by Canadian pundits who argue that hockey’s following is so strong that, not only would a southern Ontario team get support, but so would a second team in Toronto, and so on.

That’s probably true. Just as it’s true that, even today, NFL teams in burgeoning suburban zones would probably do well. But in terms of league macroeconomics, it sets the stage for ultimate constriction of the product. It’s in the same category as league contraction — again, the notion that shrinking the NHL’s footprint would concentrate its energy and revitalize it.

But ultimately, it’s short-sighted. The NFL braintrust didn’t fall for it three decades ago, and the Bettman regime shouldn’t let it happen in hockey now.

by Costa Tsiokos, Mon 07/16/2007 11:17:49 AM
Category: Hockey, Football, SportsBiz
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