Damian Dovarganes  /  AP file
The No. 1 ranking is based specifically on Los Angeles’ ability to support a new franchise in the National Football League.
updated 10/4/2004 7:13:23 AM ET 2004-10-04T11:13:23

Los Angeles and Phoenix may be separated by just 375 miles, but they are light-years apart in terms of sports economics.

Los Angeles is the nation’s most appealing site for an expansion or relocated team, says a new study by American City Business Journals. The No. 1 ranking is based specifically on Los Angeles’ ability to support a new franchise in the National Football League.

Phoenix, on the other hand, is the most overextended market in the nation, according to the study. That means its income base is insufficient for its current teams, let alone new ones.

American City Business Journals analyzed 172 markets across America to determine their economic ability to support additional professional teams in baseball, football, basketball, hockey and soccer. The study focused on markets without a team in at least one of the five major sports.

Los Angeles ranks first because of its economic power. Its income base is eight times larger than necessary to adequately support a franchise in the NFL, the only league in which L.A. is not represented.

Right behind Los Angeles on the list of best sites for new teams are Philadelphia, Orlando, Houston, Portland, Ore., and Las Vegas:

  • Philadelphia, the nation’s sixth-largest metropolitan area, is the biggest market not in Major League Soccer.
  • Orlando has twice the economic capacity needed for an NFL franchise or a National Hockey League team. It also has the highest rating of any market not in Major League Baseball, though its income base falls 7 percent short of the sport's requirements.
  • Houston, with a population above 5 million, has more than enough room to add either a hockey or soccer team.
  • Portland could back a pro team in any of three leagues, including the NFL, MLS and the NHL.
  • Las Vegas has the strongest income base of any area without a franchise in any of the five major sports. It ranks No. 1 among all potential markets for the National Basketball Association.

At the opposite end of the spectrum is Phoenix, which already has baseball, football, basketball and hockey franchises.

The study estimated that Phoenix would need another $68 billion in total personal income (TPI) to comfortably support all four teams. TPI is the sum of all money earned by all residents of an area in a given year.

The shortfall does not necessarily mean that any of Phoenix's teams will move or fold. But it is a fairly reliable sign that they can expect continued volatility in attendance and revenues.

Some of Phoenix’s franchises, in fact, are finding it difficult to prosper in their overextended market:

  • The Arizona Cardinals ranked dead last in the NFL in attendance last season. The Cardinals averaged 36,000 fans per game. Every other team in the league was above 53,000.
  • The Phoenix Suns fell 4 percent short of last year's average crowd size in the NBA.
  • The Phoenix Coyotes finished 19th in the 30-team NHL in attendance in 2003-2004.

Following Phoenix on the list of overextended sports markets are Tampa-St. Petersburg, Pittsburgh, Denver, Kansas City, Cincinnati and Milwaukee. Each would need at least another $30 billion in TPI to provide a comfortable base for its existing franchises.

American City Business Journals based its rankings of appealing and overextended sites on income data produced by the U.S. Bureau of Economic Analysis.

The study also generated a precise score, called a market capacity rating, for each area without a pro team in a specific sport. All ratings were done on a 100-point scale. (Scores for all 172 markets can be found on the accompanying spreadsheet.)

ACBJ used data on team revenues and ticket prices to estimate that a market needs an income base of at least $70.4 billion to support a franchise in Major League Baseball, the highest figure for any of the major sports. The least expensive is Major League Soccer, requiring a minimum base of $14.1 billion.

The study calculated each market’s remaining capacity for pro sports by taking the area’s TPI and subtracting the amounts needed to support its existing teams. Further details are available in the accompanying methodology box.

Major League Soccer has the widest range of expansion or relocation options among the five big leagues, according to the resulting market capacity ratings.

Eighty-two areas have scores of 100 for MLS, placing them above the league’s minimum income threshold. The list of qualified sites for soccer ranges from Philadelphia to such unlikely choices as Shreveport, La., and Johnson City, Tenn.

Twenty-nine markets have the economic capacity to support a new National Football League franchise, as do 23 areas for the National Hockey League and 18 for the National Basketball Association.

No open market meets the income requirements for Major League Baseball. Orlando comes closest with a capacity score of 93, followed by Portland at 78 and Las Vegas at 74.

The Washington part of the Washington-Baltimore economic area has a sufficient base when separated from Baltimore, which already has a baseball team. Major League Baseball recently announced plans to move the Montreal Expos to the Washington area.

The ACBJ study was designed solely to measure each market's economic ability to support teams in the five major sports. Other considerations also would be important in any decision to expand, including proximity to existing teams (a possible problem for Orlando), unique local factors (such as the prominence of gambling in Las Vegas) and the availability of stadiums or arenas.

American City Business Journals, Inc.


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