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 tope-level leagues of the several commercial sports. The macroeconomic theory generally used to support this contention involves (a) the macroeconomic measure of gross domestic product (GDP) and (b) the concentration of economic activity in a relatively small geographic area.
Commercial sports teams sited in areas with high concentrations of economic activity supposedly can (a) get a little bit of money from (b) each of a great number of people through (c) several income streams [e.g., ticket sales, television and radio licenses to broadcast games, the sale of team memorabilia, and so forth]. The only difference in this equation for large city commercial sports teams and smaller city commercial sports teams is (b) above รน the number of people in the money pool. Within the context of macroeconomic theory, this money pool is total household income, a component of GDP.
To test this proposition, eight larger city teams and eight smaller city teams competing in Major League Baseball were selected. The dividing line used to differentiate larger cities from smaller cities was a metropolitan area population of four million persons. The success of the commercial sports teams from the selected cities was measured as the percentage of games each team won during the regular seasons from 1999 through 2003.
If the contention that small-market teams cannot compete with large-market teams is valid, the winning percentages for large-market teams should be higher than the winning percentages for small-market teams.
The table on the following page presents the data collected to test the proposition. Cities are listed by population, beginning with the largest city and moving down. Winning percentages are shown for each team for each year from 1999 through 2002. ...