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Are High Taxes in Northern States Ruining Baseball?

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With another Sunday come and gone, the sports media has noticed that ratings for NFL football are slumping. This is a problem not just for the NFL but for TV stations who have long depended on live sports — and NFL games in particular — as something to hang over the heads of viewers who are increasingly abandoning cable and satellite TV in favor of services like Netflix. Since live TV is largely exclusive to more traditional television providers, NFL football has been key in stemming the tide of so-called "cord-cutters." 

But, in terms of TV ratings, the NFL is still, relatively speaking, the golden goose. Certainly, when it comes to TV, NFL is in a better position than Major League Baseball which became a niche sport years ago.

Nevertheless, MLB baseball continues to survive thanks to robust ticket sales compared to other pro sports. This is partially due to the large number of games played every season in MLB, but it's also simply due to the fact that many people like going to games as least as much as watching them on television. As Business Insider recently noted, more people go to MLB games than in the NHL, NBA, and NFL combined

Unlike televisions broadcasts, however, attendance at a baseball game is not something that can be had anywhere. So, when people move away from  metros with MLB baseball stadiums, that presents a problem for team owners. 

Matt Doarnberger at Libertarian Sports Fan has noticed this problem for MLB:

More than any other sport, baseball is dependent on popular teams(almost always from big markets) to drive ratings.

The general trend has been that Americans are mostly moving away from areas in which baseball is most important and toward areas where the game’s interest is considerably depleted. States which contain the three most popular MLB teams, the Yankees, Red Sox and Cubs, lost a total of four US Congressional Districts as a result of the 2010 Census (New York lost two, Massachusetts and Illinois both lost one). Other popular teams such as the Cardinals, Phillies, Indians and Tigers are also located in cities/states where people are leaving. This is, of course, consistent with the general migration pattern in the US for at least the past few decades where the northeast and midwest are losing people and the south and west are gaining them.

In fact, if we look at population trends in US states over the past five years, we find that the top-ten states with the most population growth (percentage wise) are North Dakota, Texas, Colorado, Utah, Florida, Nevada, Arizona, South Carolina, Washington, and Idaho. 

The top-ten states with the least population growth are West Virginia, Vermont, Maine, Illinois, Rhode Island, Michigan, Connecticut, Ohio, Pennsylvania, Mississippi. 

The first map shows population growth by state, and we find that the Rust Belt and the Northeast are seeing less growth: 


As noted by many observers, this is not a random pattern. There is a rather convincing case to the be made — as seen here, here, and here — that taxpayers are indeed fleeing the high-tax and high-regulation states of the Midwest and Northeast to move to the relatively low-tax and business friendly states in the South and West. 

The picture looks even worse when we consider that population growth in many high-tax states is propped up by foreign in-migration. Given that brand-new immigrants tend to be lower income — and thus pay less in taxes — we find that the wealth and earning potential found in the workforce is lopsided in its movement to certain regions of the country. If we include only population shifts from one state to another — excluding population from foreign locales — we find the trend to be even more obvious. Indeed, in terms of state-to-state migration, many states actually lost population when foreign immigration is excluded: 

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Because baseball is not nearly as well established in the West and South, this is a problem for MLB, as noted by Doarnberger: 

In contrast to these classic baseball cities that people are fleeing, the southern and western areas they are migrating to typically do not love the sport with the same kind of passion. Although growing states like Florida, Texas, Georgia and Arizona all have baseball teams, those teams all take a back seat to other teams in their respective states (former ESPN writer Rick Reilly assessed which team in a given American sports city was the most important to the fans in that area here). This leads to the observation many have had that there are more Yankees and Red Sox fans at Tampa Bay’s stadium when those teams visit and more Mets and Phillies fans at Marlins home games featuring those match ups then there are fans of those Florida ball clubs. The south in general is statistically less interested in following baseball than those in the rest of the country.

On other words, the old baseball heartland cities of Pittsburgh, Chicago, Philadelphia, and Cleveland aren't poised to generate anywhere near the growth that can be had in places like Arizona, Florida, and other big-growth states. The problem — for MLB team owners — is that there's no established baseball culture in these new places. 

It should be of no surprise to anyone, of course, that, for most people, being a Phillies fan is simply not sufficient to keep people from moving away from Pennsylvania and setting up shop in Arizona or Colorado instead, where business and tax conditions tend to be more favorable

Obviously, market shifts in baseball are not exactly the most important foundation for a public policy discussion, but these illustrate yet again the demographic shifts that are taking place in a world where tax and regulatory policy have a real effect on where people choose to live and do business. 

Perhaps in the future, we'll be watching the Salt Lake City White Sox play the Las Vegas Phillies. 

Ryan McMaken is the editor of Mises Wire and The Austrian. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre. Contact: email, twitter.

Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for Mises Wire and The Austrian, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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