Sunday, 17 June 2012

Sports markets “at capacity”: their rarity?

As I have noted in two previous posts (here and here), a number of sporting markets in the United States and Canada are not able to support the teams they have acquired in major leagues. This has led me to consider how many markets which actually have major league teams are not overextended but still cannot support any more major league franchises.

The striking thing is how few of these there are, as can be seen from the table below only nine non-overextended cities with major league teams cannot support more in theory:
Of these nine, four are NHL-only: the Canadian trio of Ottawa, Edmonton and Calgary, along with Raleigh in North Carolina. These cities are doing all right with the team they have especially in ice hockey-mad Canada, as is Oklahoma City with the possibility of an NBA title as I write. Their challenge is not to be tempted to attract more teams which they cannot support, one which they should have no trouble achieving for cultural reasons.

However, Memphis and Jacksonville are struggling a great deal even though they look viable under this theory because of the less competitive culture in the Deep South, which especially affects the Jaguars, whom many say will relocate to Los Angeles soon.

Baltimore and San Diego, though often criticised for their inability to retain teams, may be a wise example for other overburdened cities, especially those with theoretically enough money to support an MLB franchise. Since MLB has no intention of contracting in the foreseeable future, this will mean overburdened sports markets may need to lose NBA, NFL or NHL franchises if they have teams in all four leagues. San Diego, a market where baseball is king, is especially notable as it has lost NBA teams twice in the past and has thus avoided a burden on city governments and taxpayers in stadium construction. Baltimore, which like San Diego has only MLB and NFL, is similar in not having tried to attract teams. Overburdened metropolises should draw lessons from these seven cities’ experience to see if it reduces cost - something the majority of markets have never tried to do.

Wednesday, 13 June 2012

Why an MLB franchise costs more?

In a previous post, I noted very clearly that a Major League Baseball franchise requires twice as much urban income to be adequately supported as do franchises in the National Basketball Association, National Football League and National Hockey League.

Whilst the epic season length of MLB, as I noted before, is likely to be part of the cost of a franchise in that league, the case of the National Football League, with its 16-game regular season and still higher costs than the NBA, shows that the issue cannot be as simple as that.

I have attempted, without research since I unfortunately do not know where to start, to assess the factors that could cause the cost differences. Possibilities identified are:
  1. Season length: it obviously costs more to run a team playing over a hundred and fifty games than one playing twelve or fourteen as they do in Major League Lacrosse (not considered here)
  2. Roster size: it should cost more to run a team in a league where roster sizes are large than one where they are small
  3. Talent pool size: if the talent pool is small due to naturally specific body types (i.e. height as in basketball or netball or volleyball) being required, the cost will be higher.
    • If the talent pool is restricted by the sport not being widely played, it should have the same effect, but this may be countered by a smaller money supply in the relevant league.
  4. Protective equipment: if a sport requires specialised equipment, especially of the protective kind, as in gridiron, ice hockey, lacrosse and to a lesser extent baseball, it should cost more
    • I considered the level of training (such as strength training) required to play a sport, but thought the variable too dependent on this fourth variable I shall test to be worthwhile as an addition.
  5. Stadium utility: if a stadium can be used for activities other than the sport which is its chief user, costs should be less
  6. Minimum required stadium size: large capacity stadiums should cost more to build and upgrade than smaller facilities. This may be more a cost of land than money.
  7. Fan loyalty: if a sport’s fans are more likely to view every game either on television or more especially live, rather than only a few games, then costs should be reduced.
I will give a table of how the five leagues compared by David Berri fare on these questions. Purple indicates a high value will reduce costs; red-brown indicates a low value lowers costs.
Season length 162
1682 34
Roster size ≈25 ≈25 ≈45 ≈15 ≈35
Talent pool Medium Medium Large Very small Very large
Protective equipment Medium High High Low Low
Stadium utility Low Medium High Very high High
Stadium size (minimum)25,00015,00050,00015,00015,000
Fan loyaltyLow High HighHighMedium
From the table above, one can see that:
  1. Apart from roster size, Major League Baseball is by no means ideal for affordable franchise formation.
  2. The National Football League has problems with a large roster, large stadium size and high (weight-)training costs, but stands favourably in other areas
  3. The National Basketball Association stands favourably in terms of roster size and stadium utility but the fact that training cannot make people taller means it has a tiny talent pool of potential players who become of extreme price when they are good.
  4. Major League Soccer stands very favourably placed because:
    1. it has stadiums of a shape for very good extra-sport utility which lowers costs
    2. it is not difficult to find players suitable for playing the sport and little protective equipment is needed
    3. the season length is relatively short
The National Hockey League, however, seems a little difficult to understand. It has a long schedule, has only moderate utility of electrically frozen rinks (figure skating) and requires very specialised equipment. Ice hockey is not a widely played sport and the NHL’s strong point of small stadium size may be counterbalanced by refrigeration costs. Yet, a National Hockey League franchise costs only a tiny bit more to run than one in the NFL and NBA. This suggests ice hockey must have tremendous fan loyalty that I am underestimating, or that other factors I have overlooked reduce the cost - one of which, a smaller league money supply, I have hinted at.

Still, it is interesting to see that potential NHL relocation/expansion markets were not discussed in a study of baseball, gridiron and basketball markets, despite a promise to do so. In my view, ice hockey struggles for viable relocation markets, with Seattle and Portland, Oregon being the most promising. Other theoretically possible ice hockey relocation markets have high living costs and declining populations or cultures and climates unsuited to ice hockey.

The analysis also perhaps fails to suggest that MLB teams should cost as much more than NHL, NFL or NBA teams than they do. Ticket prices may explain a lot of this since they are so much lower in MLB than in the other leagues, but ticket prices would be reflected as part of the fan loyalty criterion and may be multiplicative.

Thursday, 7 June 2012

A strange insight into obesity and its causes

Although I have been plagued with obesity problems ever since my late father stopped driving me to university in 1997, I have never understood the cause of obesity in children so well as with this article by Rod Dreher.

As a child, I used to think advertisements really told one what was the best, despite protests by an aunt of mine which I outlined in my previous post. However, reading Sandra Bloodworth et. al. has placed that idea out of my head, but still I am prone to believing what I am told about a product if it can be justified much better than was the case with the old Toyota adds I watched as a boy. Such behaviour has certainly had its costs for me, especially in terms of finances, because I will readily seek anything remotely rare or collectible, or even something I suppose to be like that but which in reality is anything but. This can also be seen with food, where McDonalds, Hungry Jacks and KFC advertisements stick with me more than adds by Toyota or Mitsubishi. That, along with my tendency to gallop round the countryside on buses during the late 1990s and often still being out when no other restaurants are open, may account for me taking so easily to them as a source of food.

However, the stunning thing about Dreher is how he shows clearly the influence parents can have on eating habits. He says that parents today have far too much trouble stopping their children from eating junk food when it is advertised on television. Maybe my parents were not tough enough on me when it came to drinking milkshakes and eating chocolate bars and should have offered me better food that was tasty so I did not turn so quickly to junk food chains. I imagine though that such would have been tough in cloistered Melbourne suburbs where food is very simple and hearty - though often fatty because of Australia's glut of land.

Dreher also points out that school teachers - to whom I will confess I was rather distant - offer a valuable example for kids trying to learn healthy eating and fail to do anything at all. When I had to decide what to eat for myself, I took to what I knew - which caused my mass to grow in a year from 80 kilograms to 120 kilograms, where it has remained with some up-and-down variations since. It should be where it was in 1996 when I was fed at home, and I know but cannot do anything. Maybe I should be aware that my temper tantrums were totally unjustified and I was treated too leniently - telling!

Monday, 4 June 2012

The question: how to limit government in the Enriched World

The Telegraph here, looking over the recent economic decline of Japan, argues that Britain faces the same problems in the future as it faces a shortage of labour from its demographic decline and growing pension problems.

The Telegraph also argues that Britain has to be careful with the solutions Japan has offered, because of Japan’s relatively small pension systems that yet face severe debts.

The key issue for author Michael Fitzpatrick is how under zero nominal interest rates and even with claims of deflation negative real interest rates young savers get almost no return on their savings, and become dependent on struggling state pension systems. Fitzpatrick says that there is a danger that Britain and other European nations will, especially outside a small number of megacities, suffer the same fate affecting rural Japan today: a very high suicide rate, almost no formation of new families and an increasing trend towards migration to nations that do not have severe demographic problems – as show by one Satsuki Okumura moving to Bali in 2011.

The PIGs and related organisations have consistently argued that if Britain and Japan simply privatised all their public services and demolished the public welfare state, the free market would provide ample jobs and return traditional values and high fertility that would dispose of the present “inverted population pyramid”. In theory, this cannot be remotely denied: before the creation of the present welfare states the Enriched World enjoyed high fertility and solid – though not exceptionally rapid – economic growth, as Hans Hoppe documented in his Democracy: The God That Failed.

The trouble is that underneath the stable, prosperous, and very socially conservative economic order between 1788 and 1914 lurked the following facts that Hoppe himself discusses only tangentially:
  1. that working class males never supported the existing political order of essentially absolute monarchy with a limited-suffrage parliament
  2. that academics (whose funding source neither Hoppe nor Benjamin Wiker nor Thomas Woods or anyone else spends time discussing) already in 1900 had fertility rates as low as 0.5 children per “woman-equivalent”.
    • That fertility rate would be, if correct, a tenth that of the nonacademic population, creating an enormous gulf quite beyond what we see today
    • The academic community of pre-World War I Europe generally preached the same values that form the majority in the Enriched World today
  3. higher education was essential (or becoming so) to the growth of economies in the Enriched World because as its agriculture became uncompetitive, it because more and more dependent upon technology which required a lot of scientific investment – whether private or public – to develop
  4. people on the other side of politics such as Mike Davis have argued that the growth in the Enriched World between 1788 and 1914 was heavily dependent on the exploitation of the Tropical World
    • examples are seen in the demographic decline brought about by Indian famines in the nineteenth century and in “currency wars” against nations on silver standards in Asia and Latin America
In pre-World War I Europe women and the ruling and landowning classes whose wealth depended on private property constituted the chief supporters of the old order of traditional religious moral standards and limited government. Women quite possibly did not lack influence to moderate the radicalism of men and maintain a limited government system, although except in forestry-dominated New Zealand and Norway women had not acquired suffrage by World War I.

There is no doubt that the Enriched World needs to do something to reduce the size of government; the trouble is that apart from a small number of politicians, it is hard to see where a political base for such policies exists?

A strange memory not of football

Today, after having some surprising finds of old football games I have been after ever since beginning to collect them early in 2010, I went to Croydon to collect them and avoid the possibility of Australia’s poor mail service costing me valuable items. Although I was scheduled to meet the person with whom I was trading them at 14:00, I was as usual preoccupied on the computer and thus took until quite a bit later to get to Mooroolbark.

The train ride was not bad, and I tried as best I could to avoid blocking people with my bicycle - for which I assumed I would have to pay a concession fare on the return “peak” period journey. It did seem to me as though people actually did avoid my place on the train because they feared a blockage, though I still accosted too many people about the weather, with familiar story that Tasmania does not have the best weather in Australia for most people. On the other hand, I tried to avoid placing myself in difficult places when travelling to Mooroolbark, and when I went to pick up the games, it was much less difficult than I thought to cycle via only modestly steep side streets to the home. The house was apricot brick and flanked by a garden of wet grass like my old Keilor Downs garden in cooler and wetter weather, and the man with whom I was trading - a kind young man - gave me the games and I had a very good discussion of the games I had listed for him as my most wanted. Perhaps I was much too long-winded about why I was so interested in certain games, and probably I should have left sooner - still, I was satisfied with such rare games as Brisbane v Fitzroy where the Bears scored thirty behinds and Fitzroy v West Coast where the Eagles held the Lions to 0-2 (2) for a half on the only wet day for two months.

The trip home, however, reminded me of rather unsavoury days at Melbourne University when I watched over peak-hour trains. It was then that I studied the running of peak hour trains to Ringwood, Frankston, Dandenong and Werribee when I intended merely to go to Rushall station and to a rented home in North Fitzroy.

What bothered me, extremely angry then as now that a government in the most fragile nation in the world would waste any money on roads instead of rail transport, was how so many of the trains were cancelled every day “due to defective trains at Flinders Street”. One week, the 17:00 (five P.M. said the announcers) Mooroolbark train, running express from Richmond to Box Hill, did not run once due to defective or vandalised trains. Often, the 17:14 and 17:29 Upper Ferntree Gully trains which also ran express from Richmond to Box Hill would also not run, and at home and even on the station I would talk about running express from “Moneymond” to “Fighting Hill” or simply to “…Hill” while punching my fists. I recall a later day when I went all the way to Mooroolbark on this 17:00 train to see why it only terminated at Mooroolbark and on one of the Upper Ferntree Gully trains for the same reason. An oddity which attracted me then was how the fullest expresses ran to Upper Ferntree Gully only and not to Belgrave - an anomaly rectified with the first major timetable change after 1996.

The notion that “Richmond” should be where rich people live and “Box Hill” where boxing takes place deserted me between about 1986 and 1994, but the way it recovered when I noticed trains were running express between the two places en masse in peak hour alarmed my mother and even me eventually. Still, it has proven tough for me to dissociate, and whenever I think of “Box Hill” I think of punching and drawing a hill, usually in such a way that can embarass me afterwards and is not understood by others even when I wish to help them.

When I came home after receiving the games, the tendency to think “Box Hill” must be a reference to boxing turned a little ugly at the station, since whilst I was waiting I with my bicycle punched and drew a hill in a mood that can only be described as over-tense. I had also eaten a full chicken and a number of other items without telling my mother and brother I had had dinner. thus, in the dark at Croydon station as I observed the only current train to stop at Mooroolbark rather than Lilydale during the evening peak. Repeatedly punching instead of saying “box” in a calm voice without the silly but really humorous notion that it was named because of boxing there really is not good, and I admit it so quickly now that I wish I could give up an idea that is just too amusing.

Friday, 1 June 2012

The true “cheap and nasty” land

One of my childhood recollections is of an aunt of mine saying of Japanese cars (whose advertisements I then assumed to be truly representative of how good they were) calling them “cheap and nasty” and “mitsi-bitsies”, which is of course a bastardisation of the correct Japanese-language pronunciation mi-tsu-bi-shi.

My brother, when I discuss the issue in the knowledge that Japanese cars were actually manufactured to a much higher standard of workmanship than British cars of whom this aunt said “did not need to be advertised because they were good and people will buy them without advertising”. The PIGs of course say this was because of excessive union power in Britain, which my brother doubts but does not deny.

However, for all the talk of “cheap and nasty”, there is no doubt at all what country really is “cheap and nasty” to live in: my homeland of Australia. Owing to the surfeit of land and minerals, Australia’s working class has always been much richer adjusted for the low cost of living than those of Eurasia or New Zealand or most of the Americas. The result has been:
  1. it has been willing to accept low quality because migrants to Australia have sought low living costs rather than an easy life of total libertine freedom like those moving to New Zealand
  2. its high real wages have meant it has been much less politically active and support for radical socialism as has been dominant ever since industrialisation in Eurasian and now South American working classes is absent
The results of this, whilst pleasant for ordinary people, can be awful for those with any sort of discrimination or specialised interest. The fact that Australian workers are much less self-interested than those of Eurasia or the Americas means that demand for high quality products is extremely low in proportion to Australia’s population. Thus, if you as I do want specialised, rare or old products they must be imported from Eurasia or the Americas where demand among ordinary people is so much higher.

What is worse is that the apolitical nature of Australia’s working class means there is no pressure on businesses to not produce the cheapest good or service - and this applies to government or historically government-owned businesses equally as much as to private businesses, such as critically the mail service from which I can get specialised goods like old Wisdens.

A shoddy mail service can be disastrous because of the possibility of parcels failing to be properly checked and consequently being lost in the mail. Over the time I have received parcels from and eBay, this possibility has always lurked in my mind. I have come to accept that a good mail service would deliver a parcel from Europe or North America to my post office box in a single straight week - some parcels I have receive have come more quickly than that so one week seems a reasonable standard of service. However, Australia’s poor mail service can not only delay this but also simply leave parcels behind never to be found: although I always fear this and have bad temper tantrums when I feel that the people responsible should be punished as hard as possible for negligent behaviour, I have lost only around a dozen parcels in the mail. Nonetheless, the number seems to be increasing: since October 2011 I have lost three parcels in the mail:
  • a WALS copy intended as a present for me in October
  • some old Famous Five Adventure Games this January
  • a bargain 1907 Wisden this May
The rate of parcel loss since February is equivalent to one parcel in ten! Since I  have some other parcels waiting the figure may be even higher, too, and I am being told to wait through my mother’s masectomy for a refund that may be frustratingly late for something lost two weeks ago or more as I write.

My imagination tells me that a one-in-ten rate of parcel loss must be orders of magnitude above anything reported from any OECD nation other than Australia. When I told my brother of the WALS loss, I said that there is no way such a loss would ever occur in Singapore because the high living costs would mean tolerance for low quality is much reduced. Although my brother denies the truth of this, he has never refuted my argument with real-world examples of lost parcels to any other location, and it is not easy for me to imagine that lost parcels do occur everywhere.

People who want to migrate to Australia because of the continent’s surfeit of resources and relaxed lifestyle need more warnings than the fragile environment which low living costs do not pay for: quality of services is “cheap and nasty” in the truest sense. If that is what you want, so be it but do be warned for you may experience things not found elsewhere!