29 September 2005

Understanding the markets

Most of you should be pretty familiar with the following map:

This is basically how we in the nine-county Bay Area view ourselves. There are some who consider parts of Marin County essentially an extension of San Francisco, and there are those who consider parts of San Mateo and Alameda Counties to be part of Silicon Valley, making them an extension of the South Bay. Many commuters come from cities like Tracy and Hollister, which are outside these county boundaries. This is the population breakdown by area, based on 2004 estimates:
  • SF/Peninsula (red): 1,443,446
  • North Bay (gray): 1,259,804
  • East Bay (green): 2,464,379
  • South Bay (blue): 1,685,188
  • Total Bay Area Population: 6,852,817
The 6.85 million total puts the Bay Area at #4 in the country among metropolitan areas. For some reason the US Census has chosen to break the Bay Area into two regions, one including only Santa Clara county, and the other including everything else except for Sonoma, Napa, and Solano Counties. If you look at the Bay Area based on that division, the population of the larger area (called SF-Oakland-Fremont) is 5,167,629, while the separate South Bay stays as is. With the split, the SF-Oakland-Fremont area is #12 in the nation, while the South Bay is #28.

If you think that lacks uniformity, take a look at this map showing how MLB has divided the Bay Area with respect to stadium building:

The five orange counties represent Giants territory, while the two green areas represent A's territory. Not shown is Monterey County, which was up until recently part of the Giants' territory. Lew Wolff mentioned during his August press conference that Monterey County may be part of the A's territory, though it's likely he misspoke - not that anyone's going to build a ballpark in Carmel or Salinas. The three gray North Bay counties are unassigned. Based on this form of gerrymandering, here are how the individual territories compare to the other California teams' defined territories in terms of metro population:
  • Giants - 4,039,941
  • A's - 2,464,379
  • Padres - 2,931,714
  • Dodgers/Angels - 13,723,029 (the two teams share LA, Ventura, and Orange counties)
The A's territory, while not a result of an equitable split, still compares favorably to Pittsburgh (#20), Tampa-St. Petersburg (#21), and Denver (#22). Yet by limiting the A's territory to Alameda and Contra Costa counties, it gives the appearance that the East Bay by itself is a small market. But is it?

The problem with this definition of territories is that it makes it appear that residents of one territory do not travel outside their counties to work, shop, or enjoy entertainment such as a baseball game. This is obviously not the case in the Bay Area, where residents are used to driving a half-hour to get to an event, whether it's held in San Francisco, Oakland, or San Jose. San Jose and Oakland television stations all try to broadcast from towers near San Francisco because Mt. San Bruno's central location allows them to capture more of the Bay Area. The Giants and A's draw from all over the Bay Area, though both have entrenched fanbases in their respective communities. Only one conclusion can be made from this analysis:

The Oakland Athletics are not a small market team.

If the A's aren't a small market team, what is responsible for the attendance problem? Can it only be blamed on the ballpark?

Next up: A comparison of attendance prior to and following: A) a World Series win, and B) the opening of a new stadium.


Anonymous said...

To answer your question ML, YES! Venue, location, overall baseball experience...a new ballpark (as well as a winning ballclub) is key to improving A's attendance.

Georob said...

The A's are not either a small market team, nor are they truly a large market team. Even if they were in the smallest MLB market, under normal circumstances the A's would have it all to themselves, TV, radio, newspaper, etc. Not the case here.

Instead, the A's "share" a large market with the Giants...but do they really? Much of this is due to KNBR, but my feeling is that when it comes to the A's, the Bay Area media is apathetic at best and hostile at worst.

Perhaps it's like that in NY, LA, and Chicago too: where one team will always be favored over another. But the Bay Area is still smaller than those three areas, which leads back to the old argument about whether this area is big enough to support two teams successfully.

I say it is, but the A's have to market themselves to the entire region to be successful. At the risk of being simplistic, it could come down to dropping the name "Oakland" and adopting something like "California"(do the Angels still have the rights to that?) or "Golden State". Everyone in Northern California identifies with San Francisco, but Oakland implies a much smaller area with(you gotta say it) a bad reputation. Perception is reality.

If the A's move to Fremont or Dublin, it's widely assumed that the name "Oakland" will stay. But even so, the larger task remains; and that is to market the team to a wider fan base.

Laugh all you want at "LA Angels Of Anaheim", but Arte Moreno knew exactly what he was doing.

peanut gallery said...

Exactly what I always tell people. The A's are not a small market team. They aren't even a small budget team. They're actually a mid-budget team compared to the rest of MLB (from memory of the last payroll list I saw). Any attendance problems are a marketing problem, not a market problem. Personally, I think the Raiders and A's both suffer from having a fan base largely rooted in the lower income segments of the area (as a percentage compared to the Niners and Giants) and perhaps a perception that Oakland and, by association, the stadium are rough, family unfriendly places. This is of course totally false, but the perception is hard to change.

At risk of going off on a tangent, I have several comments on population metrics:

1. People have this tendency to look at city population for these things. People look at the population of Oakland and conclude it's a small market. This makes no sense as city limits are an arbitrary boundary for analyzing anything related to the measure of population except when looking at city-based services. The entire metropolitan area is the metric to use for virtually everything else.

2. The census bureau's split of the Bay Area makes their statistics meaningless. There's a far better list available here (this also includes international cities, but you can manually count to identify the top US metropolitan area):

3. From this page you will note the Bay Area is actually #5. This is because DC and Baltimore are also one big connected metropolitan area, which makes it the #4. My guess is the census bureau also split that.

4. We all know LA is huge, but I didn't realize it was well more than twice the size of the Bay Area. No wonder they get everything they want from the state and we get the shaft. And if you toss San Diego in there too (as these are quickly growing into each other), you're looking at 3x as many people down there than up here. It's only going to get worse.

gojohn10 said...

Can you please enlighten me on how these territorial rights are decided upon and divided up?

Marine Layer said...

Territorial rights are drawn up by the owners and MLB. In a sense they're arbitrary, because there's no governing body overseeing them thanks to baseball's antitrust exemption.

The late, great former owner of the A's, Walter Haas, Jr. granted territorial rights to Santa Clara County to the Giants and Bob Lurie in the early 90's. Two ballot measures to fund ballparks failed, and the Giants went through typical ballpark histrionics until the team was sold to Peter Magowan. Knowing that a publicly funded ballpark wasn't going to pass anywhere in the area, Magowan put together a plan to privately build the stadium. The only condition was that the Giants would retain the rights to Santa Clara County, and they still the rights today even though their new home is further away from Santa Clara County than it ever was.

The only other market that has a county-by-county split is Washington-Baltimore. All other two-team markets are shared.

Anonymous said...

Peanut Gallery,

The Census Bureau's spliting the area into two metro's happened because in 2003, they changed the way the Bay Area was identified from "San Francisco-Oakland-San Jose" to "San Jose-San Francisco-Oakland" to accurately reflect the population statistics.
The Bureau had no intention of dissing SF by doing this (it's their standard), but San Francisco residents and leaders complained. The only way the Bureau could be accurate without upsetting a bunch of folks was to split the area into two metro's: SF-Oak-Fre, and SJ-Snyvl-SClara (because SJ would in turn be upset if it got switched back.) By the way, same thing happened in D.C.-Baltimore at the same time, when the Bureau gave Baltimore first position, and eventually they were split to keep everyone happy.

Anonymous said...

I think us A's fans have to face the ugly reality that the shared market pretty much only flows one way. There are loads of East Bay people sporting Giants gear and going to Giants game. The reverse is just not true (to any large degree).

How many people in SF and San Mat counties actually consider going to an A's game when they are not playing the Giants? Heck I bet with the River Cats connection the A's have a larger fan base in Sac and Yolo counties than SF and San Mat.

People in the East Bay middle and upper class suburbs such as Lafayette, Livermore, and Walnut Creek live just about as close to SBC as Network Associates and are far more likely to self-identify with the urbane SF than the rowdy (somewhat falsely accused) Oakland.

I don't think it is so much a matter of market size as poaching.

Georob said...

I totally agree with the last post. I've always felt that in places like Walnut Creek and Danville, the A's have at best a 50% share of the fan base.

Whether it's because of "Raider Nation", the crime rate, or even Gertrude Stein's 70 year old remark; the name "Oakland" hurts. If the they DO leave the city limits, I have to think that the A's will give serious thought to making a change.

Would they pull an Angels and call themselves "San Francisco"? Even if they wanted to, would MLB object due to the territorial boundaries(Even though they would play in the East Bay)?

Bleacher Dave said...

Good stuff here.

Yes, I think the stadium, and more importantly, its perception, holds down attendance. But, from the financial perspective it's more about the revenue impact than the attendance impact. We've seen that new stadiums only have short term attendance effects; but I believe they have a structural effect on team revenues - even if attendance returns to pre-construction levels, stadium revs will be higher due to the change in seating mix. (club seats, boxes, etc.)

One idea that I find hopelessly naive and outdated is that the team "deserves" attendace based on their on-field success. If the games were free, that would make sense. If teams were made up of players that were native to their areas, I could see it. As profit-making enterprises, it's empirically obvious that fans have rejected that notion.

I think one aspect that's underestimated is the effect of the relationship that ownership has with the fans, community, and media on attendance. 2 of the 3 previous ownership groups were antagnostic at worst, and indifferent at best, to their fans. Finley always wanted to be the center of attention of the Swingin A's, and Schott/Hoffman alienated folks by threatening to move almost immediately upon buying the team.

The media situation also has to hurt. Print and radio consistently take shots at Oakland, and that has to hurt their ability to attract new fans. Long-held ugly stereotypes about the city of Oakland have to hurt.

Anonymous said...

Can you give us some background on professional sports in Oakland? Oakland has teams from the NFL, NBA, and MLB,...yet San Jose has over twice as many people (and a wealthier economy), and only has the Sharks of the NHL. Why Oakland? Was Oakland once viewed as a major American City? Lastly, I think for many people, being a fan of a San Francisco Giants makes them feel (psychologically) like they also belong to "The City"...Rich, Cosmopolitan, historic, synonymous with world culture.

Marine Layer said...

I'm not going to get into the Oakland vs. anyone else discussion because it never gets anywhere. The original post shows that the population is big enough. Cleveland is the same size as Oakland, and it has similar financial issues, downturn of industry, disproportionately large poor population, etc. Yet no one is talking about how unworthy Cleveland is of having pro sports, and they have three.

Now there may be a question of whether three teams in Oakland makes the area oversaturated, but that can only be asked if all of the venues were new and competition among them were even. But Cleveland does have that situation, and we know that the viability of three franchises in Cleveland is not an issue.

On that SF naming issue - I'm certain that if the A's ever went that route, there will be a long line of people with torches and pitchforks at the Coliseum the next day to burn the A's offices in the Arena. And I may just join them.

peanut gallery said...

Not to mention the fact that Oakland sits in the middle of the 5th biggest market in the country. Cleveland sits in the middle of Cleveland, a market less than half the size. Oakland is in a much bigger market, even considering it is shared. Whether they are in San Jose or Oakland, their addressable market is really the same. They can capture South Bay marketshare from Oakland. They don't have to move to San Jose to do it. Again, don't get hung up on the relatively arbitrary and meaningless city limit boundaries. They have little or no bearing on the A's market opportunity.

peanut gallery said...

Anon 11:26 - Amazing that keeping a bunch of politicians happy with the order their city's name appears takes precedence over good data. Thanks for the info.

Georob said...

Oakland is not a market. It's part of the San Francisco market. This is where comparisons with Cleveland, Kansas City, and Detroit all go out the window. Small as those places are, those cities have the local media to themselves and no local sports station that ignores them.

The A's need to work towards parity(frankly, I'd be happy with 40%) in a two team Bay Area market. This is why the "Oakland" label may need to go. Even if they were able to go to San Jose, it might be better to use "Golden State" or "California".

As long as it's the "San Francisco" Bay Area, the city by the bay will have a distict marketing advantage.

Marine Layer said...

I don't see how putting "San Francisco" in front of "Athletics" will translate into revenue. It's no magic bean. Poll a bunch of Giants fans, and the association with SF is probably not one of the top three reasons why they like the team. It's first the players (or Barry), the venue, and then the historical bond with the team. The association with SF is tangential to the historical link. People in the Bay Area won't go to A's games in droves because it's got the name "SF A's". Oakland will still be their home and the same location-based issues will plague the team.

The media issues (radio, perception) can be resolved with patience, effort, and money. It's up to the ownership group to invest in the community so that they can reap the benefits. The Angels didn't need to change their name to the LA Angels to see a boost in revenues. Signing Vlad Guerrero and Bartolo Colon did a lot more for the team's fortunes. Similarly, if the 2001 A's team had been kept mostly intact through now, the fans would be there because the stars would have been well developed. The current team's discontinuity hurts a lot.

Anonymous said...

If they stay in the county, how about the Alameda Athletics? Has a nice ring to it.

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