The current proposal for a new Minnesota Twins stadium has passed the Minnesota House. The final quote:
But in remarks to reporters Wednesday, Pawlenty appeared to leave little doubt about where he stood. "We're not going to lose the Minnesota Twins on my watch," he said.
For students of Microeconomics and Sports Economics, this is market power at work in the Minnesota political sphere. Major League Baseball (a collection of team franchise owners and a commissioner, for the most part) have great leeway over where teams play. Expansion and team relocations must get a 75% approval of the franchise owners. Plus, expansion team owners must pay a hefty expansion fee that, in part, compensates current franchise owners for shared revenues that would be lost to the current owners since they would be split among a greater number of teams. Further, there is an opportunity for current owners to grab
Lastly, franchise owners obtain rights to be the exclusive provider of MLB games in their areas. This means other teams, expansion or otherwise, cannot set up shop within another team's exclusive territory without the approval of that team's owner. In cases where a team relocates in an area that may or may not infringe on another's territory, the incumbent owner can seek redress (see Peter Angelos, owner of the Baltimore Orioles, and the move of the former Montreal Expos to D.C.).
All these things point to barriers to entry/relocation that league officials use to keep viable threat points cities open in part so that when time comes for one of the owners to ask for public assistance, that owner has an out: "If you don't give me public funding, I'll take my ball and play somewhere else."
Comments