Regionality: The New Revenue Stream

Is it possible that the A’s v. Giants rumble for the South Bay is a lot more complex than we even imagined? I mean, Bud Selig keeps saying so. Should we not believe him? Is it possible that the concept of MLB territory is evolving and this dispute is less about right now and more about an emerging revenue stream?

I caught myself pondering this question last week as the All Star Game was struggling to keep my attention. Honestly, my pondering began with a question like “When was the last time I cared about an All Star Game?” Oddly enough, I thought of the 1988 Triple A All Star Game in Buffalo, New York. It was the first Triple A All Star Game to feature all 26 Triple A affiliates and it was televised on ESPN. I remember waiting for the game to start as I sat in a 1950’s era ranch style San Lorenzo home staring at my grandparents 20 inch TV. Jim Kaat and Gary Thorne were waxing poetic about the beautiful new Pilot Field in Downtown Buffalo and the future stars about to take the field.

At the time, my main reason for being so excited was that I would get to see the player I thought would be the 4th Rookie of the Year (after Canseco, McGwire and Weiss) in a row for our Green and Gold heroes, Lance Blankenship. As a baseball card collector, I was also interested in seeing one Gregg Jefferies, a player I had heard about in card shops as a rookie card one needed to possess. They didn’t disappoint! Blankenship was 1 for 3 with a stolen base, while Jefferies was 1 for 2 with a Home Run. Other notable names that participated in the game? Bob Geren, Geronimo Berroa, Mike Devereaux, Joey Cora and Sandy Alomar.

Thinking about the game reminded me how much minor league baseball has changed.  It seemed that, back then, MLB teams didn’t think much about how the distance between the parent club and it’s top affiliate impacted business. The A’s Triple A team was 772 miles away in Tacoma, WA, for example. While that seems like quite a distance, it was nothing when compared with the over 3000 miles that separated the Chicago White Sox and their top affiliate in Vancouver, BC. I threw a quick spreadsheet together and discovered that in 1988, the median distance between a Major League team and it’s Triple A affiliate was 559 miles. (ed. note- This number is based on Google maps and is hardly precise, but close enough to illustrate the point)

If we juxtapose the conditions in 1988 with the conditions in 2009, it is easy to see a trend towards greater regionalization. Consider these things:

  • The median distance between MLB teams and their top affiliate is now only 315 miles.
  • In 1988, there were 2 Triple A affiliates that played within 200 miles of their parent club. Today there are 12.
  • Today there are 3 teams with their top affiliate over 1000 miles away, the greatest distance being the 3600 miles that are between Toronto and Las Vegas. In 1988, there were 6 teams that were separated from their top affiliate by more than 1000 miles, 2 well over 2000 miles.
  • The Braves moved their Triple A affiliate from Richmond, VA after 43 years. The Gwinnett County Braves are just over 30 miles from the parent club
  • The San Diego Padres (or at least some members of the teams ownership group) are actively working to bring the current Portland Beavers (next season Tuscon?) closer to the mothership. Possibly as close as San Marcos (36 mi.) or Escondido (31 mi.).

With MLB Advanced Media generating profits from the web, Fox Sports paying big bucks to broadcast national games, the advent of MLB Network, Regional Sports Networks extending the reach and frequency of each teams broadcasts, and most teams having a newish piggy bank for a stadium… Are minor league affiliates the next money maker for the MLB clubs? Or could there be a different reason for the decline in median distance? Is the shrinking distance between the clubs and their affiliates  about efficiency or marketing or both? Or could it be simply that expansion in the 90’s brought big league baseball closer to existing Triple A cities?

It seems to be all three. Teams are investing in minor league affiliates to make money, closer affiliates help the baseball operations staff by allowing for things like more efficient use of scouts or potentially quicker player call ups and the MLB expansion of the 90’s created the opportunity for MLB Clubs and their Triple A affiliates to move closer together.

Minor League Investments

The Padres are just one of a growing number of ownership groups that are finding it beneficial to invest in the minor leagues. The Braves, Giants, and Red Sox have all made investments in minor league teams at some point in the last decade. While I don’t expect that every team will be out buying up the 150 or so major league affiliated minor league teams across the country, I imagine most are kicking the tires on limited investments.

I find this particular quote from the above linked article to be telling:

“We’re on the record and excited about operating a Triple-A franchise in Padres’ territory,” Moorad said. “And we want to break ground, start turning shovels of dirt within four to six months.

“To be clear, though, our ownership group — not the Padres — will make the deal that makes sense to all parties.”

Is it possible that this view of expanding the reach within their territory by collocating a Triple A franchise is one of the issues that the Selig Panel is reporting on? It seems so.

Efficiency of Baseball Operations

Picture this hypothetical situation that a GM might face. The trade deadline is fast approaching and you are not sure yet if you are a buyer or seller so you need to get good scouting reports on potential targets as well as understand the recent performance of your minor league assets. Your top free agent acquisition is about to go on the shelf with elbow trouble and you aren’t sure who to bring up to take his roster spot. You want to send your most trusted scout to report on both scenarios. If your Triple A team is 80 miles away, and playing at home, and your High A affiliate is even closer, and playing a potential trading partner… It suddenly becomes a few days of driving around the adjacent Metro Area to get an on the ground report rather than a series of plane flights all over the country and back, assuming the two affiliates are playing nearby.

It’s less expensive, your scout is presumably more alert and when you call him on a whim and say, “Ben Sheets elbow is barking, should we call up Bowers, Mortenson, or someone else?” You can expect to get a better answer.

In a scenario that probably more applies to our A’s… Rehab assignments can be monitored by the GM himself if he wants, for crying out loud.

The Changes Since Expansion

Of the markets that hosted Triple A teams in 1988, 2 (Phoenix and Denver) were “promoted” to the bigs and 6 (Calgary, Edmonton, Richmond, Old Orchard Beach Maine, Tuscon and Vancouver) were “demoted” on out of Triple A baseball.

With 4 new Major League teams creating a need for 4 additional Triple A markets, the total new Triple A cities in the past two decades is 12. The new cities, since 1988, are Charlotte, Durham, Fresno, Lawrenceville (Gwinnett County, GA), Allentown (Lehigh Valley, PA),  Memphis, New Orleans, Reno, Round Rock (TX), Sacramento, Salt Lake City and Scranton/ Wilkes-Barre.

With Triple A teams dropping below the Canadian border, and closer to existing MLB franchises, all while new MLB teams were being established closer to existing Triple A cities (Colorado Springs/Denver), it seems only natural that teams would look to realign their minor league affiliations to take advantage of the opportunity to expand their reach into adjacent metropolitan areas. With the growth of Regional Sports Networks, minor league affiliates outside of traditional MLB territory, but inside an expanded TV market, became of greater strategic value.

In conclusion, it is all speculation as to what role this evolving view of the value of minor league affiliates in an extended metro area may hold for big league clubs. That said, it is clear that even small market teams are looking to the minor leagues as potential sources of future revenue. While I am not sure this is something that Selig’s panel is looking into, thinking about it (and mentally squinting really hard) definitely makes me understand some of the delay.

23 thoughts on “Regionality: The New Revenue Stream

  1. funny, your paragraphs on triple a baseball and card collecting took me back to card shows and stores, topps, fleer, dwight gooden rookie cards, the legendary billy ripkin fu card the beckett magazine and glossy sets. i think i have about 9 or 10 banana boxes full of god knows how many cards and sets gathering dust in my garage… man, those were the days…

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  3. Considering I can get free tickets at OSH, they are never on TV, and their ballpark only seats 4,000, I don’t think the single A SJ “lil” Giants mean much to the parent club in terms of revenue. Single A ball for a city of over one million; that still blows my mind!

  4. How many Sacramento fans continued to follow Nick Swisher and Mark Ellis and guys like that after they were promoted to Oakland? I’ll bet a great number of fans did that, and I bet its the same with players like Bumgarner and Posey.

  5. I bet the A’s fans have a bunch of new fans in Stockton too. That does make things more complicated for Selig and the committee.

  6. @crister How many versions of that Billy Ripken card were there? It seemed like 150.
    .
    @Tony, that wasn’t exactly what I meant. Though, if I follow my own logic I guess I could have.

  7. “That does make things more complicated for Selig and the committee.” No it doesn’t. Let’s see; get one of our clubs off of corporate welfare and out of a piss-poor venue OR satisfy 4,000 or so fans so that they can continue to see guys like Bumgarner progress?

  8. This is a good post- it got me thinking of some best case/worst case scenarios. Best: The A’s move to San Jose and we revive the Oakland Oaks to be our AAA affiliate. Worst: We give the Giants rights to Alameda county as a tradeoff for San Jose, and they build a mini ATT park in Jack London Square to house one of their farm teams. If it’s a matter of appeasing the Giants loss of their single A team, couldn’t we just invite them to relocate them to Contra Costa County and call it good? Giants fans could go to a Walnut Creek Giants game followed by drinks at McCovey’s.

  9. @Jeffrey, I’m not sure, but I believe I have 2 of them in one of my banana boxes. If I remember correctly, it was f*** face and you. I was a hardcore collector back in those days.

  10. @MaineA’sguy–Walnut Creek Giants? ..lmao..That would be a hoot, but wouldn’t that attract an undesirable element to hoity toity WC? Just make the whole little park all luxury suites to keeps the normal fans out. Something Uncle Lew would love in SJ.

  11. Lost to history is the fact that the A’s had their triple A team in San Jose for one year back in the late 70’s. (The San Jose Missions- ’77 or ’78, I think) I don’t know the history of it, but too bad that wasn’t more successful- or Charlie Finley didn’t see the value of maintaining that regional presence back then- things could be very different now.

  12. Reading the text of the ballpark ballot measure, it uses the word “professional,” not “major league.” The Giants might not want to block it. If an A’s deal falls apart or doesn’t get MLB approval, they’ve got a great site for the San Jose Giants.

  13. @baycommuter–I cant imagine a world where SJ would provide land for a new ballpark for the SJ gints—perhaps a soccer stadium there but never a ballpark for a singe A team

  14. @baycommuter/goa’s… what about land for a Triple A team?

  15. I’m not speaking from knowledge but doubt the 10th largest city is willing to give up prime land for a venue that might avg 8-10k fans per game–hard to justify that economic impact compared to a MLB ballpark on the same site that would bring in 2+M fans on an annual basis and add to national recognition–

  16. I was thinking AAA team when I wrote that post though I didn’t make it clear… it would be a dream for the Giants and a consolation prize for San Jose. I agree the city wouldn’t go for it unless the door to MLB was closed completely.

  17. Let me dispel this notion. San Jose is not, and has not been, considering AAA as an alternative. It’s MLB or bust. Anything else is a huge waste of money and resources.

  18. @ML

    I’m sure everyone officially involved with the situation is gonna maintain a stance of MLB only as admitting they’d settle for Triple-A would weekend their position. And I’m not saying a Triple-A team should be a priority, but seriously would San Jose residents really prefer having a Single-A team at Muni Stadium over a Triple-A team in a nice new ballpark? If I lived in SJ, I know I’d rather have a Triple-A team. I think it only makes sense to keep it open for a Triple-A team as a backup plan (and if you build it right it could be expanded to MLB size). Which is probably why they used “professional” rather than “major league.”

  19. Woops! The weekend must be on my brain. I mean “…admitting they’d settle for Triple-A would weaken their position.”

  20. @Ezra – It’s not about whether residents will settle for AAA. It’s about whether or not there’s political will for such a project in City Hall and among boosters. Can you see a powerful lobbying group like SVLG lifting a finger to have a AAA team in town? I can’t. The City’s language has been full of “major league city” this and that. Not only would settling not accomplish that goal, it would be admitting that San Jose is in fact, not a major league city.

    Personally, I don’t care if a AAA team comes to SJ as long as the A’s stay in the Bay Area. But it would be a huge waste.

    Think about it this way: in this trend towards vertical alignment, the business side of the MLB team ops doesn’t really care about attendance. I was just in San Marcos/Escondido last month at a couple of the excellent breweries there. There’s no chance that North County has the population that can really support a AAA team attendance-wise, but for the Padres, that doesn’t really matter as much as the convenience of having the players within reach. Knowing this, how would such a strategy benefit SJ city leaders, who would be looking for large-scale attendance to boost downtown? They’re diametrically opposed.

  21. Well said ML–competely agree–

  22. As I said, it shouldn’t be a priority, but a last resort. If something happens to put the final nail in the coffin preventing the A’s from moving to SJ, why wouldn’t SVLG and City Hall prefer Triple-A to Single-A? Especially if the A’s move out of the bay area. With the “vertical alignment” farm model, there’s nothing stating they want low attendance figures, just they have higher priorities in selecting a location than attendance. It would just mean that SJ would have the Giant’s Triple-A team by reason of proximity rather than SJ having for instance the Toronto Blue Jay’s Triple-A team.

    So, why wouldn’t they draw a decent attendance, similar to how Sacramento currently draws as the A’s Triple-A team? Rather, I think they would have even better attendance than Sac. And if they built one of the largest Triple-A stadiums and continually sell it out, I think that would prove they are a major league city more than just keeping a Single-A team. It would be like saying a collective FU to MLB/the owners/the Giants/whomever for not letting the A’s move to SJ.

  23. Ha… It was just a question. I don’t believe SJ would be all that into AAA.

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