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Editorial: What Economics Reveals About MLS in Charlotte has partnered with LexisNexis to bring you this content.

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The Roanoke Times (Virginia)


Gather 'round, sports fans. We have something special for you today.

All you people who envy Charlotte, North Carolina, come on up. All you Charlotte-haters, too.

Any public policy wonks in the house? Don't go away; we have something for you, too.

Is everyone here? Good.

So, here's the question today, actually several questions: Will Charlotte - which already has the NFL's Panthers and the NBA's Hornets - get a Major League Soccer team? Or will it get a Major League Baseball team? Or possibly both?

This would not appear to involve us here in Roanoke, except for one thing: Charlotte is a lot closer than Washington, D.C., so while historically we've been aligned toward sports teams in the nation's capital, the reality is it takes a lot less time to drive down Interstate 77. If you're in, say, Carroll County, well, Charlotte's only about two hours away. So if you're a sports fan, this really is news you can use.

Even if you're not a sports fan, there are some useful lessons to be learned here about regional economics. We also have a fascinating culture clash between soccer - seen by some as "the beautiful game," seen by others as a foreign, socialist sport - and the game that we used to simply call "the nation's pastime."

First, the basics: Some of you may be surprised to learn that the United States even has a professional soccer league. In sports terms, Major League Soccer is fairly new - kicking off in 1996. Baseball traces its heritage back to the 1800s, so 1996 was practically yesterday. For all our other major sports, the North American leagues represent the pinnacle of success. In soccer terms, we're still a "developing" market. Europe is where the action is. Major League Soccer, though, is elbowing its way onto television screens in sports bars. The league currently has 22 teams and has plans to expand to 28 - more cities, more televisions markets, more television revenue, you know the drill. Los Angeles is set to become the 23rd team next year, Miami will probably be the 24th, so the focus right now is on the 25th and 26th teams the league hopes to add in 2020. Twelve cities are in the running. One of those is Charlotte. Another is Raleigh, North Carolina. Here are the regional economics: Eight of those 12 candidate cities are in the Sun Belt; only four in the old industrial heartland that we often call the Rust Belt (Cincinnati, Detroit, Indianapolis and St. Louis).

If you look at baseball or football, you see leagues dominated by the cities that were dominant powers in the 1900s. If you look at Major League Soccer, you see the cities that are the economic powerhouses of the 2000s. The San Jose Earthquakes. The Portland Timbers. The Vancouver Whitecaps. You don't see a team in, say, Cleveland.

It doesn't appear as if Charlotte is likely to get a soccer team in this round of expansion. Even a Charlotte news site, The Charlotte Agenda, concedes, "let's face it, Raleigh has the better Major League Soccer bid." And Raleigh doesn't seem to be a front-runner, either.

In any case, Charlotte is in the mix - with the usual political fights over where to put a stadium and who should pay for it. Fun. Charlotte is a classic example of how some cities rise while others fall. In 1950, Charlotte was a relatively insignificant place, whose population wasn't much bigger than that of the entire Roanoke Valley. Today, it's a global financial and transportation center. No, we're not saying Roanoke could have been or should have been Charlotte. Our topography alone has something to say about that. But the point is that the fate of cities is not necessarily pre-ordained. There were some specific decisions that fueled Charlotte's rise - such as North Carolina's banking laws that allowed Charlotte's financial institutions to go on a buying spree and gobble up lots of other banks, including one that used to be the major corporate banking presence in Roanoke.

You may think this editorial is about sports, but it's really about politics: What decisions are voters (and their elected officials) making today that will shape the fate of our communities a generation or more hence? Hint: They're not necessarily the ones that candidates are running on. Nobody decades ago ran for office in North Carolina with a bumper sticker that said "Change our banking laws so that Charlotte and Raleigh someday get pro sports teams." But that's what happened (Raleigh has the NHL's Carolina Hurricanes.) Elections really do have consequences; sometimes, though, we can't see them for decades.

Charlotte's odds of getting a Major League Baseball team appear even slimmer than its chances of getting a soccer team. On the other hand, baseball commissioner Rob Manfred did single out Charlotte as an expansion candidate this summer, which set some hearts a-flutter in the Queen City. Of course, Manfred also mentioned Montreal and "Mexico City or some place in Mexico" as other contenders. Those are your better bets, and therein lies another economics lesson.

Baseball, unlike soccer, is a mature industry. Soccer needs more cities to justify more zeroes being added in a national television contract. Baseball is probably maxed out in the United States. A team in Charlotte might add a little something, but it would also eat away from the existing television market for the Atlanta Braves. To truly grow its market, baseball needs to expand its footprint into virgin territory.

Montreal had a team from 1969 until 2004, when the Expos became the Washington Nationals, and very much wants another. That might reclaim, and grow, the market in Quebec and Atlantic Canada. Mexico City or "some place in Mexico" represents an even bigger opportunity for baseball - a chance to make a major play for the growing Latin American market. By "some place in Mexico," the commissioner means Monterrey, which is closer, lower in altitude, and where baseball has already experimented with playing some regular season and pre-season games. Monterrey may not be a top-of-mind city for Americans but it's bigger than half the cities that already have Major League Baseball teams and has a gross domestic product about the size of, well, um, Charlotte.

You can't tell the players without a scorecard, but you can trace the rise of cities by checking the sports pages.

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September 14, 2017


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