Factors that influence Major League and Minor League Baseball Research Paper

Introduction

The field of games is a rather demanding area that calls for a fair deal of devotion if one is to succeed in it. Games come in different categories. However, inasmuch as each category wishes to attract fans based on its records of fabulous performance, it is crucial to note that various factors boost and or lower the performance.

The paper narrows down to the baseball game. Major league and minor league baseball attendance are affected by a myriad of factors ranging from the motivational factors that attract fans, to ticket pricing. In between these two extremes, scholarly works have shown a number of factors to be significant in influencing the attendance in baseball matches.

Meehan, Nelson and Richardson (2007, p.572) sheds light that, “A host of factors influences the demand for sports, including the price of tickets, fan income, the population of the drawing area, team quality, and the age of the stadiums in which teams play”. Other factors include crowd control, parking, and concession.

These factors are what researchers have referred to as environmental factors. Fans of a given sport differ enormously from fans of another sport and hence the factors that affect their attendance in the matches are widely controlled to a different extent by the same factors.

What this means is that one factor may have positive effects in drawing the spectators to cheer up a given match while in a different sport, it may produce the opposite effects. With this in mind, this paper introspect the factors that affect sports attendance with reference to principal and minor baseball league. The complexity and magnitude of promotions and marketing of entertainments products during the matches ardently influence major baseball leagues.

Other factors that are given consideration in the paper includes but not limited to team quality, top prospects, ticket pricing, prospects of terrorism, influence of international players and location of base ball facilities. However, these factors widely act in a combination mode and hence they influence attendance compositely.

Major and minor baseball league attendance

Promotions

Various scholarly works have confirmed promotions to increase attendance of baseball contests. Various types of promotions, however, influence attendance differently. As Gitter and Rhoads (2011, p.345) claim, “While price promotions affected attendance negatively in all clubs, non-price and combinations of promotions were associated with an increase in attendance for all teams.”

Butler conducted a study of determinants of the minor games attendance in 2006 Carolina baseball league. The analysis of the study predominantly focused on the effect of different promotions conducted during the game day, as opposed to promotions conducted throughout the season.

In this regard, Butler (2002, p.328) posits that, “The operation of Major League Baseball (MLB) teams is a remarkably complex enterprise involving the marketing of a diverse multi-dimensional entertainment commodity. Apart from promotion of concession products: soft drinks, hot dogs and the likes, promotion of home teams tickets increases the attendance for home teams fans.

Increased buying power goes hand in hand in the provision of the positive response to promotional campaigns. Arguably, the demand for tickets and hence the attendance during minor baseball leagues is impeccably affected by income per capita.

Butler (2002, p.328) reckons that, “the higher the per capita income in the host county (or host city) for a minor league team, the greater demand for tickets in that county.” Attendance for minor base ball league, consequently, is a function of factors that affect the demand for the home team tickets and the factors that impede the promotion of the home team entertainment products.

Using the data generated form Carolina baseball league attendance in the year 2006. Butler (2002, p.334) found out that “attendance, expressed in relative terms as a number of persons in attendance as a percent of stadium capacity was directly related to the per capita income of the county or the city of the host team”. The attendance was also a function of the other benefits such fare deals of foods and drinks products.

Reduction of food and drinks prices sold during the matches and other products for home teams such as caps, T-shirts are promotion endeavors, which have a tremendous capacity to draw a substantial volume of attendance (Gifis, 2006, p.513). Scheduling the games on Saturday and Fridays has also the capacity to increase attendance. Consequently, given the capacity of the promotions to increase the attendance, combining the two has an ability to raise the attendance even more.

Team quality

Team quality affects not only major league baseball attendance, but also minor league attendance. According to Gitter and Rhoads (2010) “there is evidence that minor and MLB are substitutes as increased ticket prices for the nearest MLB team lead to higher minor league attendance if that team is within 100 miles” (p.620). Most fans interpret quality of the team as reflective of its performance. Maintained satisfactory performance stands a perfect chance of increasing the team’s attractiveness before the eyes of its supporters.

A study conducted by Greenstein and Marcumin 1982 revealed that major baseball attendance was a function of win-loss record in previous matches (Kahane & Shmanske, 1997, p.427). In the variance of attendance, 25% of it was accounted for by the team’s record of performance. Attractiveness or rather the quality of the team plays pivotal roles in making the decision to attend.

Arguably, the fans of given Baseball team whether in major or minor leagues attend games to celebrate the winning of their team. In case a team has been recording losses more than wins, most of the fans will tend to shun from attendance since they do not want to be part of loss. This perhaps leads to the appreciation of the significance of considering the team’s quality in determining the attendance of major and minor Baseball league.

As Kahane and Shmanske (1997, p.434) reckon, “The attractiveness of the visiting team (its quality, the presence of star players, the strength of its rivalry with the home team, etc.) is a second crucial factor in fans’ decision making about game attendance” (p.40). Congruent with this view, if a visiting team has recorded a negative record in terms of performance, most likely the home team fans are likely to attend in large numbers even though the visiting team might have not held contests previously with the home team.

According to Gitter and Rhoads (2010) “…local or regional MLB team’s winning percentage only has a positive impact on minor league attendance when they are affiliated clubs” (p.614). Thus, it is plausible to argue that affiliation of teams coupled with fans perceptions about their team’s quality has an impeccable influence in determining whether to attend or not to attend a major or minor Baseball league competition.

Top prospects

The existing enthusiasm among fans to see the future baseball star contributes to increased attendance during the minor leagues. According to Gitter and Rhoads (2010), “Baseball America, a leading industry publication, ranks 100 top prospects that have yet to play substantially in the principal leagues” (p.614).

For a whole year, the one hundred prospects develop within their localities before taking part in major leagues. Fans attend baseball minor leagues driven by enthusiasm to have a glimpse of the likely star to take part in the major leagues.

The study conducted by Gitter and Rhoads claims that “only those prospects ranked in the top five and the highest AAA have an impact on their team’s attendance and their impact on attendance is small” (2010, p.615). From these results, it follows that for those stars rated least in the Baseball America ranks for top 100 prospects have little capacity to draw fans attention and hence attendance during their minor base ball leagues.

Arguably, this is perhaps because the majority of the fans interpreted the ranking as likely indication of how such prospects would perform during the matches. This argument consequently takes us to the idea that fans would like to be associated with winning teams rather than losing teams.

Since motivation is essentials in any game, the best prospects have the ability to produce baseball stars during the major leagues. Fans produce this motivation since their large attendance serves to give the players the belief that they are the best in the ranking as put forward by Baseball America.

It is somewhat subtle to argue that, if top prospects can increase minor league attendance, them if these prospects happens to participate in the major league then, there is no doubt that the attendance will also be high. Unfortunately, this argument tend to infer that only those that who are ranked high by Baseball America have the chances of being Baseball stars during major leagues.

Even though, the ranking of baseball prospects by Baseball America may increase the attendance percentage according to various scholarly studies, the increment is minimal. According to Gitter and Rhoads (2010), “minor league Baseball player ranking by Baseball America as top prospects increases attendance for minor league team by a minimal amount (less than 2%)” (p.621).

However, even though this increment is small, its contribution to sporting facilities revenues increment is quite significant. This is particularly pertinent since most of this revenue goes into improvement of sports facilities. In fact, new facilities have indicated their ability to increase attendance of fans both in minor and major baseball leagues (Roy, 2008, 146).

Fear of Terrorism

Sporting facilities are crucial targets of terrorist activities. Consequently, various sporting managers anticipate all range of consequences in term of fans attendances especially with increased perceptions and fears of terrorism activities. Kalist (2010) laments that, “sports venues may experience falling ticket sales as the public becomes more concerned about the threat of terrorism” (p.181).

Increase of terror alerts results to escalation of reduction of Baseball fans attendance. Kalist reckons that “during the early days of the nation’s first-ever increase in the terror-alert level (i.e., rose from yellow to orange) attendance decreased by as much as 12%. A back-of-the-envelope calculation suggests that a team may have lost more than a half million dollars in attendance revenue” (2010, p.181).

However, this suggestion faces incredible opposition since the most recent terror alerts has not been positively reflected into a reduction of fans attendance. The researchers of study conducted it in a time perhaps when people were not used to terror attacks threats by the ministry of state security. This is largely because most of the terror attacks threats hardly success.

Terror attacks threats that do not materialize. They make the public to lose confidence for government’s announcements of likelihoods of terror attacks. However, sporting facilities remain outstanding targets for terror attacks perhaps due to high anticipations of a large crowd turnout. In fact, “he Federal Bureau of Investigation (FBI) has made repeated statements about terrorist interest in stadiums” (Kalist, 2010, 189).

Convenience and security are perhaps two factors that fans establish tradeoffs. Inadequate security has the capacity to annoy the fans to the level that they may choose never to attend again in the future. This is argument is perhaps more significant and applicable to people who have encountered insecurity instances at one or more attendances.

Fears of terrorism have additionally resulted in the increment of insurance costs. For economic reasons, the owners of the stadiums have to extend this cost to the fans in terms of increased tickets, prices. Feeling of insecurity fueled by fears of terror attacks affects major and minor baseball leagues attendance negatively both in terms of increase in ticket prices and the need to refrain from places that one is likely to be afflicted by aftermaths of the terror attacks.

International players

The United States does not dispute the incorporation of foreign players into the Baseball teams. It is widely acceptable among sporting scholars that fans initially attended tournaments to celebrate the achievements of people they regarded as ‘their own’. Does the incorporation of foreign players in the baseball team affect the attendance of the fans? Tainsky and Winfree (2010) demonstrated “how traditional studies of consumer’s discrimination can be applied to gauge the impacts of international players in sports” (p.126).

According to Tainsky and Winfree, the incorporation of a foreign player not only resulted to discrimination amongst the MLB teams players but also affected the team’s quality. However, “the net effect of additional international player has evolved with time from negative to positive” (Tainsky and Winfree, 2010, p.126).

More and more fans continue to develop the sense of internationalism. Hence, their attendance in response to incorporation of international players in major Baseball leagues also increases lineally. This is, in fact, immensely vital since as Tainsky and Winfree (2010) reckon, “MLB, have actively tried to become more international by signing international players or scheduling more games outside the United States” (127).

Perhaps also with appreciation of the need to incorporate the international players in the MLB teams, MLB deploys incredible endeavors to advertize base ball tournaments in other languages apart from English. As Tainsky and Winfree (2010) argue “…domestic demand is not affected by international players” (p.127).

Opposed to long gone perceptions, global perceptions have resulted to immense alteration of fans regards about international players in the MLB. Furthermore, Tainsky and Winfree (2010) indicate, “The largest negative change in revenue from an international player came in 1985 with a loss of $731,875. In 2000 when the effect peaked teams increased their revenue by $595,632 from an international player…” (p.127). Based on people’s arguments, increased arise from increased attendance.

Location of the major league

Location influences the attendance of fans in the Baseball tournaments especially the major leagues. Location is significant since it influences other factors such the capacity of the fans to commute. The influence of location to attendance of major Baseball league concerned Winfree, Mittelhammer and Fort who conducted a “ travel-cost model to analyze the attendance impacts on major league baseball (MLB) of the closest substitute MLB team” (2004, p.2117).

Majority of the Baseball leagues owners complains of the probabilities of experiencing uncertainties in terms of finance in future attributable to imbalances of competition problems. As part of the solution to these problems, people have stood an excellent chance of making many proposals.

One of them is that “MLB should allow owners to move their teams, especially to larger markets to reduce the imbalance” (Winfree, Mittelhammer & Fort, 2004, p.2117). One question surface: Does change of location by virtues of relocating a major Baseball facility to a market with more financial capacity help increasing attendance and hence the revenues to the owners of the facilities?

Location carries within itself many other factors that might influence attendance such as the existence of other Baseball teams within the area that might acts as substitutes that would have the net effect of reducing the attendance of a certain MLB.

Location is significant in the evaluation of factors that influence the attendance since travel cost entangles a cost that Baseball fans have to meet. Arguably, if location needs to be significant, then in case there are two facilities within an area that offers equal utilities amongst fans, then it is widely anticipated that the fans would choose to attend the tournament that is closest to them.

In this context, it “implies that attendance lost to a substitute team should be a functions of the distance to that other substitute” (Tainsky and Winfree, 2004, p.2118). Now, it is essential to ask ourselves how prominent location is in comparison to fans loyalty to their teams.

From a different dimension, it is crucial to look at the location and its impacts to the attendance of Baseball leagues as a function of other factors that influence the same.

Tainsky and Winfree, (2004) posits that “The utility of a Baseball fan is a function of the number of visits to baseball stadiums, the quality of the teams, the quality of those stadiums, as well as all other goods consumed” (p.2118). It is thus worth to argue that, the dominant factor among all these factor wins in terms of contributing and controlling the fans decision to attend a given Baseball competition.

Tainsky and Winfree finding claim, “A travel cost model is used to explain attendance for MLB teams, 1963–1998. At the sample average variable values, a one-mile increase in distance to a substitute MLB team increases attendance by about 1544 fans” (2004,p.2123). These results indicate that in case a substitute team emerges within the vicinity of an existing team, the attendance of the first team is likely to reduce.

However, when this teams assume their market share of fans, “ongoing attendance impacts are small, even when a team might be placed fairly close to another” (Tainsky and Winfree, 2004, p.2123). Bearing in mind the economic consequences change of the location can have on the fans’ attendance, change of location should encompass one of the things that owners of Baseball facilities needs to consider before attempting shift the location of their facilities.

However, this does not disregard out the weight of other factors that may contribute towards pre-bargaining for the need of relocation. This is largely justifiable since a good number of fans can be willing to attend tournaments of Baseball teams to which they have developed incredible loyalty towards no matter the commuting costs.

Ticket pricing

Sport teams have three principal sources of income. These sources are “sales, of media rights, concession sales and ticket sales” (Meehan, Nelson & Richardson, 2007, p.572). As a way of ensuring that sport teams have maximized their profits, the team’s owners need to be in possession of ample knowledge about the relationship, between the attendance and the pricing of the tickets.

Pricing tickets at higher prices, from the most general dimension and given that the demand is inflexible, means increased revenues and hence profits. On the other hand, increased attendance, even without necessarily increasing ticket prices, means increased revenues.

However, is it possible for demand to be inflexible even in the helm of increased ticket prices? As Meehan, Nelson and Richardson (2007, p.572) posit, “A host of factors influences the demand for sports, including the price of tickets, fan income, the population of the drawing area, team quality, and the age of the stadiums in which teams play”.

Each of these factors has different impacts on the attendance. For instance, Meehan, Nelson and Richardson (2007, p.574) claims that “the sensitivity of attendance to changes in the price of tickets (the elasticity of demand) and to changes in average incomes (the income elasticity) may vary from team to team”.

Meehan, Nelson and Richardson’s study investigated 23 MLB teams in 1970 to 2003. They deployed series data to make them be at a point to pin point on certain factors that had a direct influence on the attendance of Baseball leagues. To this extent, ECM (error correction model) came in handy.

The results of the study indicated that ticket pricing was amongst the factors that affected the attendance in the baseball league. Their results contend with other scholarly studies that “MLB ticket prices are set in the inelastic range of demand” (Meehan, Nelson and Richardson 2007, p.577).

Setting ticket prices in any elastic range of demand has the effect of reducing demand and hence revenues in case any adjustments are made on the ticket prices. This is perhaps necessary for the purposes of ensuring that ticket pricing does not result to dwindled demand. Reduced demand is a substantial impediment towards ensuring increment of baseball facilities profitability.

Conclusion

A number of factors affect the attendance of fans in both major and minor baseball leagues. These factors range from incidences of voicing likelihood of terror attacks, team quality, top prospects, ticket pricing, and influence of international players, promotions and location of Baseball facilities.

Before making any policy, the Baseball facilities’ owners, consequently, need to put all these factors into consideration since they affect the attendance of the fans differently. This goes hand in hand in determining the future financial position of the Baseball clubs.

Reference List

Butler, M. (2002). Interleague Play and Baseball Attendance. Journal of Sports Economics, 3(4), 320-334.

Gifis, L. (2006). Promotions and Attendance in Minor League Baseball. Atlantic Economic Journal, 34(4), 513.

Gitter, S., & Rhoads, T. (2010). Determinants of Minor League Baseball Attendance. Journal of Sports Economics, 11(6), 614-628.

Gitter, S., & Rhoads, T. (2011). Top Prospects and Minor League Baseball Attendance. Journal of Sports Economics, 12(3), 341-351.

Kahane, L., & Shmanske, S. (1997). Team roster turnover and attendance in major League Baseball. Applied Economics, 29(4), 425-431.

Kalist, E. (2010). Terror Alert Levels and Major League Baseball Attendance. International. Journal of Sport Finance, 5(3), 181-192.

Meehan, J., Nelson, R., & Richardson, T. (2007). Competitive Balance and Game

Attendance in Major League Baseball. Journal of Sports Economics, 8(6), 563-580.

Roy, P. (2008). Impact of New Minor League Baseball Stadiums on Game Attendance. Sport Marketing Quarterly, 17(3), 146-153.

Tainsky, S., & Winfree J. (2010). Discrimination and Demand: The Effect of International Players on Attendance in Major League Baseball. Social Science Quarterly, 91(1), 117-128.

Winfree, J., Mittelhammer, R., & Fort, R. (2004). Location and Attendance in Major League Baseball. Applied Economics, 36(19), 2117-2124.