Munich Personal RePEc Archive

Of Bricks and Bats: New Stadiums, Talent Supply and Team Performance in Major League Baseball

Rockerbie, Duane W and Easton, Stephen (2016): Of Bricks and Bats: New Stadiums, Talent Supply and Team Performance in Major League Baseball.

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Abstract

This paper considers whether publicly-financed new facility investments encourage professional sports team owners to increase their investments in costly talent. We develop a model of a sports league that incorporates publicly-financed facility investments, the unique characteristics of the talent market, and revenue sharing to explore the complementarity between new facility amenities, the team budget decision and team performance. Our empirical results suggest that publicly-financed new stadiums do little to improve team performance, not due to restrictions in the talent market, but rather due to a lack of fan response.

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