Event Title

The Demand for Baseball and the Growth of the Entertainment Business

Location

Panel 18: Kearney 323

Start Date

27-10-2012 10:15 AM

End Date

27-10-2012 11:45 AM

Description

As the 20th century dawned, professional baseball was well established on the American landscape, but had not yet grown into big business. It was popular in local markets and even had a growing national following, but it certainly did not resemble the national pastime that it is today. In this regard, baseball is an excellent barometer of the health of the broader entertainment industry, of which spectator sports is a small, but culturally significant, part.

Over the course of the 20th century baseball flourished, growing to become America’s most popular sport until eventually being overtaken by football. Despite losing its position at the top of the American sporting entertainment industry, baseball is still a large and profitable enterprise, annually generating more than seven billion dollars in revenue, attracting more than 73 million fans to the ballpark, and playing nightly to national television audiences.

In this paper I tell the story of the growth of the baseball industry and its impact on the value of the franchises in Major League Baseball (MLB). Using a unique set of financial data I am able to estimate the changing value of MLB teams over the course of the 20th century. This provides us with an insight into the role that MLB played in the entertainment industry from a perspective not often available: the business side.

Baseball teams are privately owned companies with no obligation to share their financial records. As such, data concerning their revenues and profits are scarce at best, and nonexistent for most of the sport’s history. As a result, gauging the health of the business of the sport is difficult. Understanding the value of franchises and how they change over time, however, is an important part of understanding the market for baseball, and entertainment in general, and helps to explain its growth over time.

The model I developed allows me to estimate the value of MLB franchises over the course of the 20th century, providing insight into why baseball grew in popularity and profitability during the first three quarters of the 20th century, and why it ultimately fell behind football. The model also helps us understand how local markets and entertainment venues varied and grew over time, and gives us a glimpse into the economic health of the entertainment industry as a whole.

A better understanding of the market for entertainment in general, and baseball in particular, gives us insights into the changing pattern of entertainment expenditures by the American public. While spending on sports and entertainment is a relatively small part of our economy, it is a culturally significant part of the American landscape. A better understanding of entertainment spending will help us better understand ourselves.

This document is currently not available here.

Share

COinS
 
Oct 27th, 10:15 AM Oct 27th, 11:45 AM

The Demand for Baseball and the Growth of the Entertainment Business

Panel 18: Kearney 323

As the 20th century dawned, professional baseball was well established on the American landscape, but had not yet grown into big business. It was popular in local markets and even had a growing national following, but it certainly did not resemble the national pastime that it is today. In this regard, baseball is an excellent barometer of the health of the broader entertainment industry, of which spectator sports is a small, but culturally significant, part.

Over the course of the 20th century baseball flourished, growing to become America’s most popular sport until eventually being overtaken by football. Despite losing its position at the top of the American sporting entertainment industry, baseball is still a large and profitable enterprise, annually generating more than seven billion dollars in revenue, attracting more than 73 million fans to the ballpark, and playing nightly to national television audiences.

In this paper I tell the story of the growth of the baseball industry and its impact on the value of the franchises in Major League Baseball (MLB). Using a unique set of financial data I am able to estimate the changing value of MLB teams over the course of the 20th century. This provides us with an insight into the role that MLB played in the entertainment industry from a perspective not often available: the business side.

Baseball teams are privately owned companies with no obligation to share their financial records. As such, data concerning their revenues and profits are scarce at best, and nonexistent for most of the sport’s history. As a result, gauging the health of the business of the sport is difficult. Understanding the value of franchises and how they change over time, however, is an important part of understanding the market for baseball, and entertainment in general, and helps to explain its growth over time.

The model I developed allows me to estimate the value of MLB franchises over the course of the 20th century, providing insight into why baseball grew in popularity and profitability during the first three quarters of the 20th century, and why it ultimately fell behind football. The model also helps us understand how local markets and entertainment venues varied and grew over time, and gives us a glimpse into the economic health of the entertainment industry as a whole.

A better understanding of the market for entertainment in general, and baseball in particular, gives us insights into the changing pattern of entertainment expenditures by the American public. While spending on sports and entertainment is a relatively small part of our economy, it is a culturally significant part of the American landscape. A better understanding of entertainment spending will help us better understand ourselves.