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Minor League Baseball Attendance: Winning, MLB’s Impact, and Stadium Construction

Minor League Baseball Attendance: Winning, MLB’s Impact, and Stadium Construction Seth R. Gitter and Thomas A. Rhoads Department of Economics Towson University Society for American Baseball Research 2009 Annual Meeting Washington, DC What brings f ans to minor l eague games?

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Minor League Baseball Attendance: Winning, MLB’s Impact, and Stadium Construction

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  1. Minor League Baseball Attendance: Winning, MLB’s Impact, and Stadium Construction Seth R. Gitter and Thomas A. Rhoads Department of Economics Towson University Society for American Baseball Research 2009 Annual Meeting Washington, DC

  2. What brings fans to minor league games?

  3. What brings fans to minor league games? We Examine • Winning • Homeruns • The MLB Strike • Ticket Prices of Nearby MLB Teams • Quality Nearby MLB Teams There are other possibilities, but these are the impacts of interest for our study.

  4. We also Examine New Stadiums. Over half of the 200 minor league teams built a new stadium between 1992-2006!

  5. Our contribution • Test the impact of minor league team winning and homeruns on attendance • Test if MLB teams can influence fans away from minor league teams • Measure the impact on per game attendance of a new stadium and novelty effect

  6. Data • 2076 team/year observations including every A, AA, and AAA team from 1992-2006 • Data provided by Sports Reference LLC (Baseball-Reference.com) • Stadium construction date retrieved from BallparkReviews.com • MLB ticket cost data from the Fan Cost Index (In real $s)

  7. Minor League Attendance Growth

  8. Statistical Tools (How We Did It) • Multivariate regressions estimated separately by level (A, AA, AAA) • This means when I discuss one variables imagine all the other variables are constant • Used city fixed effects • This controls for local income and population. Think of all variables compared to a team’s average attendance. • I can answer technical questions at the end of the talk or provide you a copy of the paper with more details.

  9. Prior Work from Economics • Minor league hockey research • Winfree and Fort (2008) • Winning increases attendance (but only slightly) • During the NHL strike minor league hockey attendance increased • MLB research—novelty effect • Coates and Humphreys (2005) • Clapp and Hakes (2005) • New stadiums increase attendance. • 10 years later there are still increases in attendance, but increases much lower than 1st year.

  10. Variables First Analysis • Average per game attendance (APG) • Analysis separated by level How is APG impacted by: • Win % • Home Runs (during the season) • MLB Strike (1994 and 1995) • Closest MLB team’s ticket price • Closet MLB team’s winning percentage

  11. Variables First Analysis Part II • Closest MLB team’s impact may depend on distance and if the teams are affiliates. • We compare teams that are • Less than 100 miles apart • Between 101 and 250 miles apart • More than 250 miles apart • We compare affiliates and non-affiliates

  12. Part I (Analysis I) Results • Winning increases attendance at A and AA, level and not AAA. • The impacts of winning are relatively small • For each 10% winning percentage increases attendance increases about 2%. • Going from .500 to .550 would increase fans over the course of a year about the equivalent of one extra game • Homeruns • At the AA level, but not other levels more homeruns increases attendance. • Increasing HRs 25% (one standard deviation) increases attendance 3%

  13. Part II (Analysis I)The Influence of the Closest MLB Team • MLB is a substitute for minor league baseball • Attendance increased when the closest MLB team within 100 miles raised ticket prices. • No evidence for further distances • Attendance increased during the MLB strike (about 4% a year more than the trend) • The closest MLB team’s winning percentage only matters if they are an affiliate • Impact similar to minor league team’s own winning percentage

  14. Results (Analysis II): • Part I: New Stadium Impacts • About 4% of teams had a new stadium in any year of the sample. • Part II: Impacts of MLB Stadiums • About 2% of teams in any year were located within 100 miles of a new MLB stadium

  15. Part I (Analysis II): Summary • Attendance increases 40%, 25% and 42% in a new stadium at the A, AA, And AAA respectively. • Over a 10 year period a new stadium increases attendance by • 200,000 fans (Short Season A) • 400,000 fans (Long Season A, AA) • Size different only due to number of games. • 1.2 million fans (AAA)

  16. Impact of New Stadium

  17. Part 2 (Analysis II): Summary Impact of MLB Stadium • There does not appear to be a negative impact of an MLB team building a new stadium within 100 miles. • In fact at the AA level it has positive impact on attendance in years 2-6

  18. Results Summary • Winning and homeruns have small impacts on attendance. • New stadiums increase minor league attendance. • MLB may be a substitute in terms of price, but new stadiums for MLB teams do not seem to draw away minor league fans.

  19. Areas for Future Study • Include a cost benefit analysis. • Stadium construction cost (substantially less than MLB) • Compare increases to MLB for better analysis • Find minor league ticket price data???? • Has the novelty effect diminished over time as more minor league teams have built stadiums?

  20. Thank you (sgitter@towson.edu)

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