DOES CITY SIZE MATTER IN COMMERCIAL SPORTS SUCCESS?
Today, one continually is informed by the various media outlets that so-called small-market teams cannot compete in the top-level leagues of the several commercial sports. The microeconomic theory generally used to support this contention involves (a) differences in demand for the product between cities with different population sizes and (b) variations in the capacity of cities of different size to respond the demands with changes in supply.
When charted, the demand curve for larger cities in relation to commercial sports products is expected to be to the right of the demand curve for smaller cities. Because larger cities have more people than smaller cities, more people will demand (a) more tickets to the ballparks, (b) more live broadcasts of games on television and radio, and (c) more team memorabilia. The level of demand, however, tends to be tempered by the success of teams on the field, on the floor, or on the ice. Thus, commercial sports franchises compete for the best talent that they can afford to maintain demand.