Study: Kansas City is Saturated with Sports Franchises

1. First off it shouldn’t measure personal income, it should measure disposable income. The thresholds they have established don’t take into account things like cost-of-living. For example, let’s say you make $40,000 in Johnson County. On average, the same job in San Jose pays $45,000. On the face of it, it appears San Jose residents have an extra 5K to spend on the San Jose Sharks. In reality, your mortgage, taxes, and living expenses are much higher in San Jose—almost 50% higher than living in Olathe. Even though you make less in Olathe, you have more money left after paying the bills to spend on things like Wizards games.
2. It assumes there are no other viable entertainment options. Even though Norfolk and Las Vegas have similar amounts of available personal income, there are a LOT more entertainment options in Las Vegas than in eastern Virginia. In fact, Las Vegas has some of the lowest personal savings rates in the country, indicating (to a degree) that peoples money on luxuries and entertainment are already stretched. These “thresholds” in reality are incredibly variable depending on the market.
3. No direct measure of corporate support. I’m sure the threshold number implies some degree of corporate support, but again its quite variable. Why does Norfolk not have a franchise? Because 35% of its regional economy is in the defense industry, which has some of the lowest revenue support of sports entertainment (Northrop-Grumman Arena?). If the CEOs of Garmin and Sprint grew up playing on the same ice rink in Toronto, there would be an NHL franchise in KC within a year. With the right corporate sponsorship, any region could support an additional sports franchise.
4. The contention that, “these cities will have issues with attendance and revenue in the future.” Oh, really? The KC market is not a boom-and-bust region. Growth has been fairly steady over the past few decades. The relative personal income now is not appreciably different than when the MLS Wizards started playing in 1996. KC’s “personal income threshold shortfall” has been the largely same for the last 13 years. Still, the Chiefs have been top three in attendance for most of those years. The Royals had their 2nd best attendance numbers since 1994 this year—one of the worst economic years on record when money should be short. The Wizards are getting offers on both sides of the state line for a new stadium-a massive commitment and investment, one that investors don’t make without researching the entertainment market.

It’s not income that keeps people out of the stadium, it’s the LOSING. The Chiefs aren’t threatened with their first blackout because of competition with the Royals and Wizards, it’s because the Chiefs have gone 5-32 and nobody wants to watch their team lose-again-on a cold day in the middle of December. People went to Royals games because people went to see Greinke win. I defy any market in the country to go through the Royals last 20 years and still pull 22,500 in a 65-97 season. Winning breeds attendance and the additional revenue that comes with it.

Would an NHL team do well in KC? If it loses 75% of the time like the KC Scouts did in the mid ‘70s, probably not. If it’s a consistent winner, I think it would.