One of the most famous discussions in baseball is the idea of “who has the best rivalry?”  As we’re aware, the Red Sox/Yankees rivalry is usually the one receiving the most attention for a variety of factors (similar large market sizes, rich traditions, and a famous Babe Ruth trade).  However, there are also smaller ones, such as the Cardinals/Cubs, the Giants/Dodgers, etc.  Have you ever wondered what makes up a good rivalry?  At the core, the thing that really develops it and makes it sustainable is comparative talent.  I’m sure it was relatively palpable the difference in the “rivalry” that existed in this last year in any Red Sox/Yankees game.  The same, I could say personally, happened in Brewers/Cubs games, though of course to a lesser effect.  In previous years I’d say an average of 60%-70% of the people who came to Miller Park were from Chicago while this last year was more around a much more manageable 40%-50%.  Of course those numbers have no scientific basis, but you’ll just have to accept my first-hand account for now.

So what’s the point of this article?  This article’s point is simply to argue that there is a benefit to team’s competing at a similar level.

Why?

At the basis of this understanding is an understanding of the finite resource that is stadiums.  By definition, stadiums have a limited amount of people that they can hold.  Theoretically, they could build stadiums to hold more people, but there are diminishing returns to this possibility.  Firstly, the more seats that are added, the farther away some seats have to be from the stadium (either in height or in depth).  As someone that has definitely bought the $1 special tickets in the top corner of the stadium, I can tell you that at a certain point you’d much rather just watch the game on your television.  In addition, the larger the stadium is, the more land it takes up, both in the actual seats as well as the amount of parking spaces required.  At some point the price at which these tickets can be sold does not compensate for these increased costs.  This is perhaps why we’ve seen a shift towards more suites in stadiums rather than more seats as they realize that they can charge a higher premium for these that more than compensates for the loss of individual seats.

Now onto an important note, as I reference in my other article, How Much Should Each Baseball Team Spend?, realize that teams split their gate: 60% for the home team and 40% for the opponent.  I’m sure you can see where I’m going with this: if nobody attends the game at your opponent’s stadium, there are no gains to be made.  In fact, oddly enough, the number one thing any visiting team wants is for the opponent’s stadium to completely sell out.  However, as I’m sure we’re all aware, teams that are better, or at least are perceived as better, are more likely correlated to the selling of tickets.  An example I like to use for this point is the 2012 Astros who had a home attendance of 1,607,733.  Compare that with the 2009 Astros who posted an attendance of 2,521,076 with only a 74-88 record, a difference of 913,343 just for being “not terrible”.

So what’s the conclusion we can come to here?  The conclusion is that, there are competing forces at stake in the composition of every team; teams want to make sure they win more games so that they can reach the postseason and appear competitive so that they can sell out their own stadiums (and gain from other profits that relate to winning) while also wanting to make sure they aren’t too far removed from the skill level of their opponents so that they continue to sell out so they can reap the maximum 40% revenues from their stadium capacity.

Thus, contrary to what some fans might think, the Yankees actually want the Red Sox to be good – but just marginally worse than them.  However, the Red Sox are also thinking a similar thing – they want the Yankees to be good – but just marginally worse than them.  In the end, we have two teams that are constantly trying to be just marginally better than the other to maximize their opponent’s stadium revenues (while also decreasing costs by not spending more than they have to).  Ultimately, this should end up with a race of trying to constantly get marginally better than their opponent, resulting in decreased profits for both as they simply keep increasing their costs.  Of course, the best thing that they could do would be to collude on a strategy, but as we know, that’s prohibited in the United States.

In the end you have two teams that could theoretically each gain more profits by spending less and taking on strategies that utilize trust rather than competition.  However, there is such a large incentive to “cheat” by trying to be just slightly better than your opponent that both teams will choose to cheat every time.  This is part of the idea of game theory…but that’s another post in itself.

I hope this got you thinking about the importance of rivalries in baseball.  Please feel free to leave your comments below.

Baseball Rethought.

-Steve