Monopoly Game

THE BALTIMORE SUN

The Chicago White Sox are the talk of the major leagues, with the best record in the American League and a young, exciting team. So why isn't anyone going to see them?

The Oakland Athletics are in playoff contention for the second year in a row with an appealing club that should be packing them in at Network Associates Coliseum. But attendance has been so disappointing the franchise wants to move farther away from the cross-bay rival San Francisco Giants.

Orioles owner Peter Angelos looks at those situations and serves them up as proof that baseball promoters in Washington and Northern Virginia should not try to wedge a second team into the Baltimore/Washington market. He acknowledges that his franchise holds a monopoly on Major League Baseball in the area, but he insists that is in the best interests of both the industry and its fans.

"If you take this monopoly and reduce it to two halves," Angelos said, "you're going to have two have-nots."

Others aren't so sure. There is little doubt the Orioles would be hurt by a competitor in Washington. The team, which sells almost a quarter of its tickets to fans from the Washington area, would find itself suddenly sharing that lucrative base with an unwanted rival. Money from TV and radio would also drop, as fans switch allegiance and broadcasters divide the marketplace.

The Orioles, and their owner, might also suffer a loss of prestige and value if the club were no longer the de facto team of Washington, the franchise of choice for Presidents and lawmakers.

But the franchise would survive, according to independent economists familiar with sports. And, they note, there would be advantages. A Washington franchise would figure to be a great convenience for fans of the national pastime in the national capital. It might even keep prices down for ticket-buyers and for local companies that do business with the Orioles.

Baseball apparently has been examining the possibility of making Washington available to the Expos if they fail to get a stadium deal in Montreal, but it is unclear whether that or any other team would move to either downtown Washington or its Virginia suburbs.

In 1997 baseball owners considered the area the next best candidate for expansion when they awarded teams to Phoenix and Tampa-St. Petersburg, Fla. Meanwhile, no one disputes the emergence of Northern Virginia, home of America Online and other high-tech companies, as one of the nation's most affluent regions.

The demographics have changed dramatically since Major League Baseball twice moved teams out of Washington because of apathetic attendance. The Senators' franchise left after the 1960 season to become the Minnesota Twins but were immediately replaced with an expansion team. It moved to Texas after the 1971 season.

"I was sorry 29 years ago when we left there," said baseball commissioner Bud Selig, "but we haven't moved a team since then so there's nothing really to talk about. When there is, Washington and Northern Virginia will get every consideration."

Selig acknowledged that the well-being of the Orioles' franchise will be an important factor in any decision on the return of Major League Baseball to the Washington area.

"One thing I've always said, I thought we made an essential mistake years ago with San Francisco and Oakland and ended up with two owners struggling," Selig said. "What I don't believe in is moving a team into other people's territory. My obligation is to protect all 30 franchises."

If that sounds like music to the Orioles' ears, it doesn't necessarily mean that Selig would block the arrival of a Washington team. He said Thursday that Major League Baseball still intends to study the impact of a second team in the market - and he likely would act in concert with the will of a majority of owners, not all sympathetic to Angelos, who angered many of his baseball brethren when he was the only team owner to refuse to field replacement players during the baseball strike in 1994.

Though baseball has been able to control franchise movement for nearly three decades, a maverick team owner might decide to relocate over the objections of the sport and its commissioner,

"It wouldn't kill the Orioles, but it would knock them down a bit," said Andrew Zimbalist, a Smith College economist and author of "Baseball and Billions: A Probing Look Inside the Big Business of Our National Pastime."

Sharing the wealth?

The Orioles are among the richest teams in the game. A recent report by Major League Baseball said the team had the third-highest revenue among the 30 franchises, behind the Yankees and Indians. Orioles per-game attendance was the highest in the American League last year, averaging 42,914, although it has been declining in recent seasons.

Thanks to the appeal of Camden Yards - and its cut-rate lease with the state - the team sold for a record $173 million in 1993. Many experts think it could command a price twice that today, on par with the $320 million the Indians were sold for last year.

A competitor in Washington would probably pare the franchise's value by 10 or 20 percent, Zimbalist said. That could mean a paper loss of $30 million to $60 million for the team's ownership group.

But that doesn't mean the Orioles would go on the economically disabled list. The Orioles would be the established team in the market competing with a transplant. Fans wouldn't simply turn in their season tickets and switch allegiance, Zimbalist said.

The fans who remain with the Orioles may also enjoy the benefit of the competition: The team would feel additional pressure to keep ticket prices down, he said.

Baseball fans from the Washington area say they would enjoy a team closer to home.

"Most definitely," said Robert Pitysingh, a George Washington University employee who lives in Gaithersburg. "It's close, and there's too much traffic going to Baltimore. When you get to the game and sit down, it's already too late."

Atalla Adileh, a Virginia resident, drives a bus to almost every home game. "These people come from Virginia. An hour and 15 minutes or an hour and a half to come to games, so of course there would be some interest in a team there. They spend lots of money and take all-day trips. I'm sure they would go to games closer to home."

Tepid support in D.C.

Maybe Washington can support its third major-league baseball team, but the response to last year's two-game exhibition series between the Expos and St. Louis Cardinals leaves room to wonder. RFK Stadium played host to superstar slugger Mark McGwire and drew just 20,465 for the first game on a perfect afternoon, and 30,172 for the series finale.

"Look at that Cardinals-Expos exhibition," said Orioles vice chairman Joe Foss. "They've got Mark McGwire for his first appearance in the area since breaking the home run record and they draw only 20,000? That's a market that's going to support major-league baseball?"

Still the Orioles don't dispute that a second team would interest a substantial number of fans in the Washington metropolitan area, but fear that sharing the market would reduce their ability to compete in the big-money American League East and also leave the new franchise with limited economic potential.

According to a market analysis commissioned by the club in 1996, the Orioles sell about 1 million tickets a year in areas that a competing survey by proponents of baseball in Northern Virginia identify as their prime targets. If the Orioles were to lose half of those fans, the impact would be felt on more than just gate revenue. The decrease also would affect broadcast, concession and parking income.

The Orioles' report contends that the other franchise also would be handicapped severely by the overlapping fan base.

The other study, conducted by William Collins, a businessman who has long been trying to lure a team to Northern Virginia, projected that a new team could draw up to 3.2 million a year. But that assumption depends on fans from Montgomery and Prince George's counties - areas where the Orioles draw heavily.

If the team were located in Virginia, the Collins group estimates that no more than 7 percent of its fans - or about a quarter of a million - would come from north of the capital. But that's still too many, say the Orioles.

The Orioles draw about 3.5 million a year and, as the dominant team in a split market, would figure to draw at least three million. But they might be vulnerable to the kind of intramarket attendance shifts that have vexed both the Giants and A's.

"That would be a problem for the Orioles," Angelos said. "Those that don't believe that just don't understand. The notion that there are 6 million fans in this area is ridiculous. They don't even have that in New York, where there are 15 million people."

City, state would suffer

John Moag, managing director of Legg Mason's sports consulting practice and former chairman of the Maryland Stadium Authority, said the competition would siphon off revenue, which would hurt Maryland and Baltimore. The team's rent is calculated as a percentage of its revenue and typically falls about $1 million a year short of covering the state's cost in running the park. The situation would get worse if team revenues fell.

Also, fans coming from distant Northern Virginia and Washington probably spend the most time and money in the city. Their loss would harm businesses downtown, he said.

"In some respects, the Maryland Stadium Authority and city would get hurt more than the team," Moag said. "It is not good for the Orioles, and it is not good for the city, and it is not good for baseball."

Another problem would be supporting skyboxes and the pricey "club seats," for which fans pay annual rent. These luxury accommodations can generate as much revenue as regular tickets for some teams. "I think the market is saturated," Moag said.

Since the debut of Oriole Park in 1992, the Baltimore-Washington area has gone from no modern luxury seats to a glut of 50,000 club seats and 500 suites at the home parks of the region's five major-league teams, he said.

David Cope, director of development for the Bethesda-based Gilco Sports & Entertainment consulting firm, predicts that the market could support two teams - if they are well managed. "With proper marketing, both will succeed," he said.

If the Orioles lost fans from the south, the team could, with advertising, attract new fans from the north, he said. "It is a major regional franchise," he said.

The Orioles would remain the dominant baseball team for many years because of its established fan base and the central location of Oriole Park, Cope said. There is no location in or around Washington that offers the same combination of highway and mass transit access, as well as proximity to both ends of the oblong market, said Cope, who has held executive marketing positions with the Orioles, Redskins, Ravens, Wizards and Capitals over the years.

"I do not believe it would be catastrophic," Cope said. But, he said, the Orioles "would have competition for fans as well as eyeballs on TV and ears on radio."

To fill the luxury seats, the booming high-tech industry around Washington should provide customers, he said. But it would take salesmanship, he added.

The skybox question

One skybox renter, Constellation Energy Group of Baltimore, has found its suites at Oriole Park and PSINet Stadium useful for business, but expensive, said Constellation spokesman Michael Delaney.

"We're a Baltimore-based company, and we want to support the local teams," he said. The energy holding company probably would not invest in a skybox in Washington or Northern Virginia because its customer base is closer to Baltimore, Delaney said.

John Mansell, a senior media analyst for Paul Kagen & Associates, a national media analysis firm, believes the Orioles might not be hurt by a Washington baseball franchise, from a television standpoint.

"If you look at the regional sports network models in other cities, I'm not so sure that a similar situation couldn't exist here," said Mansell, who is based in Northern Virginia.

Every other market the size of Baltimore/Washington supports two teams, if not always well. The most comparable markets in terms of population are the Bay area and metropolitan Chicago.

The White Sox are averaging just more than 24,000 a game despite the presence of slugger Frank Thomas and a cast of young, home-grown talent. Their attendance problems could be blamed on the unenviable location and design of Comiskey Park, but the main problem is the tremendous popularity of the Cubs and historic Wrigley Field.

The strongest two-team markets are New York and Los Angeles, but they are much bigger than Baltimore-Washington. And the Anaheim Angels might even dispute the rosy scenario after two years of declining attendance at newly reconstructed Edison International Field.

The Athletics drew reasonably well when the highly popular Bash Brothers (Jose Canseco and Mark McGwire) were leading them to three consecutive American League pennants from 1988 to 1990, but only twice in the history of Bay area baseball (1989 and 1993) have both clubs drawn more than 2 million fans each and only once (when the teams faced off in the World Series in '89) have they combined to draw as many as 5 million fans.

Now, with the Giants ensconced in a beautiful new waterfront stadium, the surprising A's face an even tougher fight for Bay area fans.

"For years, we didn't have good teams, so you couldn't judge if this is a good two-team market," said A's general manager Billy Beane. "Now, we've had a competitive team for the last 1 1/2 years and, while there has been a slight increase in attendance, it is not significant. At that point, you have to question whether there should be two teams here."

Not easy to compare

Any comparison of markets is problematic, of course. The success or failure of a team is dependent upon many factors - tangible and intangible - from the team's batting average to the ambience of its stadium and the popularity of its owner.

The sites being explored in Washington and Northern Virginia would put the new team 40 to 60 miles from Camden Yards, making the stadiums farther apart than in any other two-team market.

Demographically, Oakland-San Francisco seems the most apt comparison. The region is similar to Baltimore-Washington in size and wealth. And both metro areas have two major cities with distinct cultural identities.

But there are differences, too.

The two Bay area stadiums are only a 21-mile drive apart. The Giants opened a replica of Camden Yards this year. Oakland's fans continue to trudge to a hulking coliseum that the A's share with the NFL's Raiders.

Washington's boosters are promising a fan-friendly ballpark the caliber of Oriole Park, something that would make this area the only one with two modern baseball stadiums.

It is logical for the Orioles to fiercely oppose a competitor, said Gerald W. Scully, an economist at the University of Texas.

"But so what?" There is no guarantee of success in any business, including baseball," said Scully, author of "The Business of Major League Baseball" and "The Market Structure of Sports."

"It would knock the franchise's attendance down potentially from well-above average to above average, which ain't bad," he said.

Sun staff writers Milton Kent, Christian Ewell and J. Kimball C. Payne and news researcher Paul McCardell contributed to this article.

O's vs. Senators

The Washington Senators were one of the original American League clubs and played in the District until owner Calvin Griffith moved the club to Minnesota after the 1960 season. The franchise was replaced by an expansion team the following year, but persistent attendance problems persuaded Major League Baseball to allow owner Bob Short to move the team to the Dallas/Fort Worth area after the 1971 season.

The hapless nature of the club was the basis for the popular Broadway musical "Damn Yankees," but the real enemy of the franchise was its poor fan base.

In the 18 seasons that the Senators and Orioles shared the Baltimore/Washington market as major-league clubs, the Senators never outdrew the Orioles. The closest the Senators came was 1962, when the Orioles drew 60,479 more fans.

In 1971, their last year in Washington, the Senators drew 655,156. That same year, the Orioles played in their third straight World Series and drew 1,023,037 with their highest per-game attendance since 1966, when the team first won the World Series.

The following year, as the only team in the market, the Orioles drew 899, 950. That year, attendance was down across the major leagues after a players strike wiped out the first week of the 1972 season.

Peter Schmuck

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