In my previous post, I looked at why Green Bay wins so many pro sports championships despite its size (less than two percent the size of New York and only a little more than three percent the size of Chicago). Today, with the help of my colleague Patrick Adler, I turn to the broader connection between a metro’s size and its success in pro sports.
Size brings lots of advantages. Bigger metros have bigger markets, which translates into more lucrative local endorsements and better business opportunities. With larger fan bases, overhead is spread out across more consumers. Teams in these places can afford to pay superstar coaches more, and can offer them more opportunities and amenities to tempt them away from smaller markets (this last consideration certainly helped Miami land Lebron James, as I wrote at the time).
The New York Yankees notoriously outspend their rivals on payroll, snatching up the most sought-after players. The ability of large market teams to bring in top talent was a key reason why commissioner David Stern blocked the Lakers’ attempt to obtain superstar guard Chris Paul from New Orleans.
Metro size is closely correlated with championships, as one would expect. This can be more clearly seen in the graph above. New York is an extreme outlier because of its size. In addition, Montreal, Boston, Chicago, Pittsburgh and Green Bay have won more championships than their population share would predict.
A key reason for the win rates of bigger metros is simple arithmetic: They can afford to field more teams. Green Bay has had just one franchise throughout its history, the Packers. New York has had ten (two franchises for each sport, plus the Dodgers and baseball Giants before they decamped for California).
Teams from bigger metros also play more seasons. New York teams have played more than 500 professional seasons, Chicago teams have logged 482, Philadelphia, Detroit and San Francisco teams have more than 300 seasons each. This is compared to 91 for Green Bay and just 32 for Edmonton.
The graph (above) plots the relationship between metro size and the percent of championship seasons won by teams from a given metro. The two are closely correlated. As the graph shows, the three largest metros – New York, Los Angeles and Chicago – clearly drive the relationship.
But what also stands out is how three smaller-market teams outperform, taking home substantially more championships than their small size would suggest.
When it comes to professional sports, size confers major advantages in terms of markets, attendance, salaries and endorsements. But as in most other aspects of economic life, it's not everything. Just as Nashville, despite its relatively small size, has emerged as a dominant center for popular music, metros like Green Bay in football, Edmonton and Montreal in hockey and San Antonio have been able to develop considerable athletic prowess.
Many have speculated on the degree to which smaller-market teams can compete in a world where size so heavily shapes success. Outsmarting the competition is one way to do it. By adopting Billy Beane’s statistically savvy "moneyball" methodology, the Oakland Athletics leveraged overlooked talent and erased some of the bigger-market Yankees’ and Red Sox’s natural advantages. Of course as those techniques proved their effectiveness, the bigger teams began to use them as well, and the A’s advantage diminished.
A few small-market teams benefit from their marquee brands. Green Bay won most of its championships in the pre-Super Bowl era, when there were fewer teams and dollars and hence market size was less of a factor in securing top talent. And then there are the locational idiosyncrasies of truly spectacular talent. Vince Lombardi, Green Bay’s long-standing coach, was so iconic that they named the Super Bowl trophy after him. Wayne Gretzky was a once-in-a-generation hockey player who has his fingerprints on every Stanley Cup Edmonton has won. Sometimes the returns to individual brilliance can exceed returns to region size.
And these marquee franchises bring advantages that can transcend sheer size in attracting super-star talent. "In professional basketball, history trumps everything else," Bill Simmons explained about Chris Paul’s near trade to Los Angeles.
It's not just about playing in Los Angeles … It's about following the footsteps of Magic, Kareem, Wilt, West, Baylor and Shaq. It's about Showtime, Nicholson, the yellow jerseys, the Laker Girls, even that awful Randy Newman song ... When these idiots complain about a 'big market/small market' disparity, it's almost like they never followed the league before they bought their teams.
The Packers’ legacy offers something just as valuable as the Lakers’. There is a considerable lag – what economists refer to as path-dependence – to this phenomenon: once established, this marquee franchise effect can persist for quite a long time.
All that said, in most sports, the lure of bigger markets, bigger dollars, and bigger endorsements has proven increasingly irresistible; it is getting harder and harder for smaller market teams to retain or attract top talent. Which makes what the Packers are doing this season all the more exceptional.
Green Bay isn’t just an outlier. It is the very definition of an exception that proves a role.
Photo credit: Allen Fredrickson/Reuters