Media Rights and Market Size

Last week, Larry Granillo found an old article in Sponsor magazine ("the national weekly of TV and radio advertising") that listed the TV and radio deals each MLB team had in place for the upcoming 1961 season. The chart is here, and is pretty cool on its own. Larry did a good job breaking down who spent what where, but I was personally more interested in the "why". Several companies (like American Tobacco) sponsored teams in multiple markets; how did their advertising agency decide to pay $140,000 for a third of the Red Sox' rights, but $200,000 for a third of the Tigers' rights?

How Much Is a Win Worth to an NBA Team?

Last month, I used J.C. Bradbury's free agent valuation method to determine how many wins the Red Sox expected Mike Napoli and Shane Victorino to contribute to the team in 2013. That worked fine, but suppose we want to build a similar model for the NBA. Again, we'll use the basic system Bradbury outlines in "The Baseball Economist" (ch. 13). Here, Bradbury found a relationship between revenue, wins, and the size of the city a franchise plays in.

All three of those variables are readily available. For city size, we'll use the population of the metropolitan statistical area (MSA) each team plays its home games in, as reported in the 2010 U.S. Census*. Revenue is available through Forbes' Business of Basketball listings. This data is almost exactly one year old -- suggesting that it covers the 2010-2011 season, and not the recent lockout-shortened 2011-2012 season. This is better for our purposes; I don't want the compressed schedules and reduced number of games to interfere with my results.

* - And the Canadian equivalent for Toronto, with the hope that the two have very similar methodologies.

Evaluating MLB Signings, Part 2: Madness

Last time out, we asked how good the Napoli and Victorino signings were for the Boston Red Sox. Using J.C. Bradbury's method, we established that we need to do the following:
1. Figure out how much a win is worth,
2. Figure out how much an individual player contributed to his team's wins, and
3. Convert that number of wins into a dollar value.

Evaluating MLB Signings, Part 1: Methods

After their 2012 season went down in flames, the Boston Red Sox were active during the recent winter meetings, signing 31-year-old first baseman/catcher Mike Napoli to a 3-year, $39 million contract, and 32-year-old outfielder Shane Victorino to a 3-year, $37.5 million contract. The moves were modest when compared to past offseasons, but the question remains: will the Sox get value from their new acquisitions?