How Much Is a Sports Rivalry Worth?

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Aug. 2 2013 2:49 PM

How Much Is a Sports Rivalry Worth?

The economics of crosstown hatred.

New York Yankees' Alex Rodriguez (L) takes a punch from Boston Red Sox catcher Jason Varitek in the third inning at Fenway Park in Boston, Massachusetts July 24, 2004.
New York Yankees' Alex Rodriguez takes one from Boston Red Sox catcher Jason Varitek at Fenway Park July 24, 2004.

Photo by Brian Snyder/Reuters

This is part of a special series about great rivalries: between tech titans, sports franchises, and even dinosaur hunters. Read about the series here.

When I went to my first game at Fenway Park in 2002, I was excited to hear Red Sox fans outside the stadium chanting “Yankees suck! Yankees suck!”

I turned to the guy who invited me and said, “Hey, you got me tickets to a Yankees game? Awesome.”

“Nope,” he answered. “They’re playing the Cleveland Indians.”

Cue the trombone.

By some subjective and completely unscientific measures, the Yankees–Red Sox rivalry is the most storied in American sports. In fact, it has been a rather lopsided affair, even accounting for the Theo Epstein–led resurgence of the Red Sox that began about a decade ago. The Yankees have won 27 world championships. Boston has won seven, with just two of those since 1918. The Red Sox have a .457 winning percentage against the Yankees since 1900, their worst record against any team in the American League. Still, the Sox obsession with the Bronx Bombers has a tangible benefit.

“Boston is a relatively large-market team, but the Red Sox enhance their value by playing up the rivalry with the Yankees,” says Evan Osborne, an economist at Wright State University who has done economic modeling on sports rivalries. “For the Yankees, it’s much less important. Everyone hates them, so, in a sense, every team is their rival.”

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If a sports team needs one thing—well, it’s probably a large market. But if a franchise needs a second thing to ensure its economic health, it’s a good rivalry. How much hay has Boston made by playing David to the Yanks’ Goliath? According to the 2013 Forbes rankings, the Red Sox are the third most valuable team in baseball, behind the larger-market Yankees and Los Angeles Dodgers. The Red Sox are worth 47 percent more than the Philadelphia Phillies, who occupy a much bigger city. Though there are obviously many factors that come into play here—the added value of a treasured landmark like Fenway Park, Boston’s historic affection for baseball—the Phillies’ lack of a historic rival like the Yankees surely factors into the club’s lower standing in the financial standings.

The Forbes baseball rankings, from top to bottom, demonstrate the value of a rivalry. The top few teams are all involved in intense rivalries: The Yankees have the Red Sox, the Dodgers have the Giants, and the Cubs have the Cardinals. Most baseball fans would struggle to identify true rivals for the least valuable teams. (Sorry, Royals fans. The Cardinals don’t really think of you as their main rivals.) It’s hard to separate correlation from causation here, but the correlation is striking.

College football, with only a dozen games a year and enormous stadiums to fill, may be the most extreme example of the economic value of sports rivalries to a community. The game between the University of Idaho and Boise State reportedly brings $1 million to the Moscow, Idaho economy in one weekend. And a local restaurateur reports a 65 to 75 percent increase in sales on the day of the Utah–BYU game. And, where there’s money, politicians are sure to meddle. The South Carolina House of Representatives last year considered, but ultimately rejected, a law mandating an annual football game between Clemson and the University of South Carolina. And a former Texas governor publicly pleaded in vain to keep Texas A&M in the Big 12 to maintain their rivalry with the University of Texas.

Recognizing the value of a good rivalry, American sports leagues go to great lengths to create and promote them. When the NFL realigned its divisions in 2002, the league minimized the combined geographic distances between the teams in each conference, likely as a means to maximize the possibility that nearby fans would develop intense antipathy for each other. The divisions with the least combined distance between the teams, the NFC North and the AFC Central, feature some of the strongest rivalries, according to Osborne’s research. Interleague games in Major League Baseball and interdivision matchups in college football conferences introduce an obvious unfairness into the sport—teams whose traditional rivals are strong are dealt a handicap—but we tolerate it for the sake of entertainment.

Rivalries have an economic value because they seem to tap into the same subconscious processes as other forms of marketing. As Charles Duhigg described in The Power of Habit, marketers use a habit loop consisting of a cue, a routine, and a reward to hook consumers on a product. (Marketing legend Claude Hopkins hooked Americans on toothpaste, for example, by using the film that naturally develops on teeth as a cue and a beautiful smile as a reward.) Rivalries work on the same primitive neurological process. ESPN plays up traditional rivalries on SportsCenter (the cue) in the week leading up to the game (the routine), while the winners take some sort of tangible prize (the reward), like Paul Bunyan’s Axe or the Fremont Cannon. Major League Soccer, unwilling to wait for rivalries to develop organically, has rather unsubtly attempted to push the same buttons in our basal ganglia, with the Rocky Mountain Cup and the Cascadia Cup.

Stoking our primordial passions is a risky economic gambit, though. It may inspire us to care deeply and spend without inhibition, but it also brings out the worst in fans, owners, and athletic directors. Racist chanting and inflatable bananas, directed at superstar Mario Balotelli, interrupted the Milan derby earlier this year. Otherwise good coaches, like Ohio State’s John Cooper, have lost their jobs largely because of poor records against a single team. And rivalry destroyed the Scottish soccer league. As Celtic and Rangers improved, the rest of the league atrophied or regressed, essentially reducing the entire season to the home and away series between the top two teams. In an attempt to finally vanquish their rivals, Rangers owner Sir David Murray boldly declared in 2000, “For every five pounds Celtic spend, we will spend ten.” The strategy eventually led to the liquidation of his team, with the remnants sent down to a lower division last year.

Like so many other economic tricks, rivalries can do more damage than good when left unregulated. And it’s risky to rely on rivalry as a primary economic strategy. The Yankees, the team that everyone hates, has long been the richest team in the sport. Boston, which is substantially less reviled, is no closer to surpassing the Bronx Bombers’ wealth than they are to exceeding their trophy haul.

Brian Palmer writes about science, medicine, and the environment for Slate and Earthwire. Email him at explainerbrian@gmail.com. Follow him on Twitter.

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