Study suggests minor league teams have major economic impact

I was at an academic conference last year in Las Vegas. As I waited for the next presentation to begin, I talked to Nola Agha, a professor of sport management at the University of San Francisco. She asked where I was from and I replied “Augusta, Georgia.” To my surprise, she replied, “That’s the home of the GreenJackets minor league baseball team.”

 

How did someone from California know about the GreenJackets? Maybe it was because they are an affiliate of the San Francisco Giants and Agha was a baseball fan?

Turns out, Dr. Agha knew about the GreenJackets because she has spent much of the past few years studying the impact of minor league baseball teams on their local economy.

Eighty-five percent of economists agree that local and state governments should eliminate subsidies to professional sport franchises because studies have shown major league sports teams have no impact on their economy. What Agha was the first to do is look at minor league, not major league, teams.

She found that the presence of a AAA or A+ minor league team increased per-capita income by $67 to $118 per year. Affiliated minor league teams in a city also increase rents by 6 to 8 percent. This is in direct contrast to major league sports.

So why are the results different? One suggestion is that major league teams often are located in large cities, so discerning the effect of a team is difficult given all the other economic activity. Minor league teams are in smaller, more isolated, cities, and so may affect their communities more.

Agha also states that new stadiums are more likely to affect income if they are associated with other development, have a high degree of utilization and drive new visitor spending. I was at the North Augusta Chamber of Commerce meeting when Jeff Eiseman explained his vision for the new GreenJackets stadium. He certainly is planning a high degree of stadium utilization, expecting more than 200 dates when the stadium will be in use for other sporting and nonsporting events besides GreenJackets games.

Mr. Eiseman is aiming high as well in mentioning spring training, and the Clemson and University of South Carolina baseball teams. Many of these events will drive new visitors to North Augusta from out of town. This is important, because attracting visitors who would otherwise spend their money in town, say at the cinema or theater, doesn’t create new spending.

Moreover, the stadium is part of a larger development that includes residential housing, hotel, office and retail space where people can live, work and play.

Overall, this new research suggests the Riverside Village at Hammond’s Ferry may have a positive economic impact.

The writer is associate professor of finance at the James M. Hull College of Business, at Augusta University.

 

More