The inequities of territorial rights are epitomized by the Knicks, who act as if they bought Manhattan Island and its environs for $9.12, which not coincidentally was their league-leading average ticket price last season. A question: If the Portland Trail Blazers can sell out every game in a town of 381,400 souls, surely a megalopolis of 16,557,600 could accommodate another basketball team or two, no? Yes, but the Knicks know that the reason they are one of the most prosperous franchises in sports is that they dominate a market where the demand exceeds the supply by a wide margin. That is why they are trying to put the struggling Nets in their place, which is presumably six feet under.
The restrictive effects of territorial rights are even more apparent in football. According to one study, the NFL could successfully expand into eight more markets, including adding a team in both New York and Los Angeles. Now, before the NFL numerologists come charging out with their studies, it must be noted that the decision to expand requires careful scrutiny of some non-economic factors, not the least of which is whether the world is ready for another rash of New York Muggers and El Paso Enchiladas. Besides, there are more reliably profitable ways of expanding, such as adding two more games to the schedule, which the NFL will do this season.
Overexposure and overlapping seasons be damned; the Stanley Cup will continue to be played in June on melting ice, and if the World Series runs into the Super Bowl, well, the fan can buy an extra TV and catch all the action. Over the past two decades, baseball has added 868 games to its season; basketball, 614; hockey, 510; and football, 124. Owners like extended schedules because they mean more income for a relatively small increase in operating expense.
And that means more profits, especially for teams monopolizing the larger population centers: one franchise in a market that can support two teams equals double the demand, which equals higher ticket prices, which equals greater profits, which is what the game of Moneyball is all about.
The rewards of staking out even part of a major market can be enormous. In the '50s a subcommittee of the House of Representatives succeeded where other investigators have failed. It obtained hard financial data on all the teams in baseball for the periods 1946-50 and 1952-56. The results were revealing. Despite the competition of a third team (the New York Giants), the Brooklyn Dodgers during that decade accounted for 44% of the National League's pretax profits, while the Yankees glommed 38% of the American League's take.
Why then, in 1958, did the Dodgers desert such a gold mine, not to mention that era's most rabid fans outside of an Elvis Presley concert? Like any businessman, owner Walter O'Malley wanted to boost revenues by moving to a larger ball park, and though New York City offered to build him one on the very site where Shea Stadium stands today, he decided West was best. Among Los Angeles' enticements were the promise of lucrative broadcasting deals and the gift of 300 prime acres where O'Malley could build his own park. But essentially O'Malley's move was a straight business deal, based on the equation that 100% of a big virgin market was better than 33⅓% of a big tested market. That did nothing to placate Brooklyn fans, but unlike Congress, they at least found out the answer to the old question: Is baseball sport or business?
The Dodger move touched off a westward-ho! land grab that has since swung around and headed south to places such as Houston and Atlanta. Although Memphis' and Birmingham's bids for NFL franchises were turned down, the cities are likely to be tapped sometime—later rather than sooner, because of another equation: owners share equally in the entry fee paid by a new franchise. Therefore they tend to expand slowly, because the longer they wait the greater the demand for new franchises. The greater the demand, the higher the entry fee. The higher the entry fee, the bigger each slice of the communal pie.
There also is the claustrophobia factor. As the leagues have grown, owners have become more protective of their territories. This has been reflected in their attempts to stake out multiple cities (Kansas City-Omaha Kings) and even whole regions (New England Patriots). In baseball it often seems like the sheepherders versus the cattlemen. The major reason the American League galloped into Toronto was to cut the National League off at the pass. And when Walter O'Malley recommended that the National League go grazing in Washington, D.C., hard by the Orioles' spread, Jerry Hoffberger, the brewer who owns the Baltimore franchise, foamed in his beer. He had a better idea: How about dropping an American League franchise into Chavez Ravine? "Los Angeles County is as big as France," he exclaimed.
Phoenix is large enough to support an NFL franchise, but chances are that it—or another city of its size—will be kept on the sidelines as a safety valve. Teams need likely places to threaten to move to so they can force better stadium deals. Thus in every league's future there will always be a Phoenix rising—but never quite making it. James Quirk, an economist who has studied these strange tribal rites, says, "On the one hand, you want to keep a few cities hungry, and on the other hand, you don't want to keep too many cities hungry. You don't want to start a new league."
Nor do investors who are denied the opportunity of purchasing a franchise want to sue on antitrust grounds. They are trying to buy territorial rights, not destroy them. Similarly, the four ABA survivors could contest the NBA's dictatorial ways in the courts, but in doing so they would undermine the monopolistic advantages they want to protect since they will eventually benefit from them, too.