Someday Major League Expansion

As I have opined several times since starting this blog back in 2009, I think it is well nigh time for another round of major league expansion.  Since major league expansion began in 1961-1962, the longest period without expansion has been the present 18 seasons since the last round of expansion in 1998.

Commissioner Rob Manfred was recently asked about future expansion.  He said that he strongly supports eventual expansion because MLB is a growth industry and growth industries need to grow (or words to that effect).  However, his statements made clear that expansion is not a front-burner issue, which I understood to mean that there will not be further expansion for at least the next three to six years, in other words during the period of the next negotiated collective bargaining agreement.

As I wrote almost seven years ago now, I think that greater Portland, OR; San Antonio/Austin, TX; and Charlotte, NC/SC are the most promising domestic sites for the next two expansion teams.  As of today, I think any of these locations could support a major league franchise.

Needless to say, MLB’s current owners are in no real rush to expand.  They have a nice little monopoly, and why split the current national TV contracts a couple more ways?  MLB as an institution may also wish to wait until there are a few more prime metro areas, as a result of future population growth, for possible expansion.  More contenders for the expansion teams means MLB will have a greater ability to extort better facilities from the contenders.

My best estimate is that expansion teams could probably command a $600 million franchise fee if expansion were to happen now.  If two expansion teams are added, that’s $40 million for each of the existing 30 teams.  That’s a lot of money in theory, but given current player contracts, it’s not all that much.  Meanwhile, in the short term existing teams would be getting less national TV money.

In the long run, of course, expansion means a bigger national market and more national TV money.  However, I don’t think most owners are all that far-sighted when it comes to running their operations.  Most likely, teams will want to wait until team values for even the least valuable teams are so great, that expansion fees would really have a major impact on the existing teams’ bottom lines.

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