As it seems, Nashville’s shining star in big-time sports may have been tarnished by recent events. Our proud Predators have been left in limbo, abandoned by lame-duck ownership. The Sounds ballpark deal imploded from internal squabbling between owner and developer. Fortunately, everything is not as it seems. Music City is still a big-time player in the pro sports game.
Music City is the 30th-largest U.S. television market, with almost 1 million TV homes (Nielsen, 2007). In pro sports leagues, the critical market size is about 1.5 million TV homes. Markets above this line are large enough to support a team in each major league.
The rest of the leagues are composed of below-threshold midmarkets that can support either an NHL or an NBA club but not both. Because there are more cities than teams, this creates a bidding war among midmarkets for big-league clubs. The “winner” is the city that pays the highest public subsidy. Most second-tier venues are funded from public coffers.
Of all the major leagues, Major League Baseball relies most heavily on market size. In the midmarket tier, weaker MLB clubs are mixed with stronger AAA clubs. Nashville, for example, has a larger TV market than the Sounds’ MLB parent Milwaukee Brewers, with 880,000 TV homes (34th).
Because of revenue sharing in the NFL (two-thirds of revenue is pooled), market size doesn’t matter. The second-largest TV market, Los Angeles, doesn’t have a club (at least until 2010), and Jacksonville and New Orleans are the 50th and 54th TV markets.
When market size does matter, teams are less likely to move. This is why the Titans could jump from Houston (10th) to Nashville and why the Nashville Preds are unlikely to move to Kansas City (31st). Music City is firmly situated right where it needs to be in the urban sports hierarchy.
The bad news and the good news are the same for Nashville. The bad news is that Metro has over-subsidized venues to attract big-league expansion and relocation franchises. The good news is that because of these sweetheart deals, Music City is still the best option for our teams. Our job is to make sure that our teams remain the best options for Music City.
Here are six proposals for the integrated future of pro sports and downtown Nashville.
1. Think big. Rather than seeing sports teams as anchors for the venues, the venues should be viewed as integrated anchors for larger development projects south of Broadway.
2. Connect the dots. In its current isolated state, the Sommet Center looks like an abandoned spaceship. The only way the multiplier logic works is if all projects, including the Sounds ballpark, are fully integrated throughout SoBro development.
3. Stop the bleeding. All major players in ownership and private development are from out of town. The first rule of urban development is to stop the leaks and keep the money in Nashville.
4. Go with the flow. Midsize cities all experience an urban core abandoned by suburbanization. Ultimately suburbanites return to the abandoned core because of transportation costs and land prices. This is naturally happening now in Nashville.
5. Let ’em play. Metro’s public role should be that of a good referee. Let the players play the game. No more subsidies are necessary beyond infrastructure.
6. Get ‘er done. It’s time for Nashville business to stand and deliver. The future of pro sports in Music City is now.
John Vrooman is a Vanderbilt University economics professor who has published extensive research on the economics of pro sports, including venue financing and franchise relocation. This op-ed was originally published in the July 22 edition of The Tennessean.
Media Contact: Amy Wolf, (615) 322-NEWS
amy.wolf@vanderbilt.edu