$500,000,000 for a New Stadium. Is It Worth It?

For 150 years, American sports franchises have spent billions solely in effort to win a championship. Although, some may see the economic return, and social stature as motivation enough to own and spend money on a sports franchise, the majority of owners and front office decision makers yearn for championships above anything. Teams have won by spending much money, and by spending little money. Among several expenditures of materialistic value, owners can spend money to improve their teams on free agents, better coaching, smarter management, and new facilities.

However, are new facilities, or a new stadium, or a $500 million overhaul providing any winning value to the franchise?

According to Tom Ricketts, owner of the Chicago Cubs, his personal $500 million renovation project for Wrigley Field, will not only advance the ballpark out of the Stone Age, but also create an environment more conducive to short term winning. With over 100 years of futility, Ricketts pleads for support for the project, and support for the franchise.

http://chicago.cubs.mlb.com/news/article/chc/cubs-moving-forward-with-wrigley-restoration-plan?ymd=20140521&content_id=76326626&vkey=news_chc

The big question here is will it work? Will improving the clubhouses and the fan experience draw better players to play for the Cubs eventually leading to the elusive prize? In order to simplify those questions, The Cleat Sheet is going to examine the relationship between a franchise and its stadium. Or rather, attempt to answer this question: Does a new stadium improve the success of a team?

Cubs fans are growing restless, so let’s see if we can determine if a positive correlation between new facilities and an increase in short term wins. To do this, we are going to examine the performance of the team five years before a new stadium, and then the five years with the new stadium. We will use win percentages to determine success, and see if there is a relationship between anticipation of a new stadium, receiving the new stadium, playing in the new stadium with wins. Of course, there are several other variables. Although those contribute heavily to success, for the purpose of this study we do not care about those. We are simply going to research whether or not there is a relationship between a new stadium and win percentage. Also, the Chicago Cubs are not receiving a new stadium, but $500,000,000 is a significant investment to align with the study. Hopefully for the Ricketts’ Regime, there is a positive relationship.

Hypothesis: Simply, if an MLB franchise receives a new stadium, then their win percentages will increase the immediate years after the stadium opens compared to the years before the new stadium. Data: Here is a link to the full data collected. It is interesting enough to just observe a few of the specific teams’ performance. Take a gander if you care: http://https://docs.google.com/spreadsheets/d/1ZWLmjRd10m6ODkEPxUQFadUQ1eS4OknKNBzJQ1ziqHk/edit#gid=0

Here is the chart and the table of average (note: 300 seasons were included in this data). In the “Time” column, -5 for time represents five years prior to open, 0 is the year the stadium opened, and 4 is the fifth season the new stadium has been played in (encompassing a range of ten years). Remember, the win percentages below are of every MLB team relative to the time they received a new stadium.

Stadium chart

 

Time: -5 = five years prior to new stadium.0 = year new stadium opened4 = fifth season with new stadium Win Percentage
-5 0.490421636
-4 0.497916322
-3 0.512007453
-2 0.499286916
-1 0.500076394
0 0.510497959
1 0.50882285
2 0.513745533
3 0.519398318
4 0.525068886

Conclusion: The Cleat Sheet’s conclusion is the data clearly shows a positive correlation between time and win percentage. With an R-Squared value of .768 that means that 76.8% of the variation win percentage is based on the time before or since receiving a new stadium. Also, the correlation coefficient, R, is .8764. Although not a perfect positive correlation, this high number (1 indicates perfect correlation) suggests that there is a strong positive relationship between time relative to a new stadium and win percentage. This should serve as an indicator to teams that investing in the facilities can indeed contribute to increased success. Whether it attracts better free agents, or the players are simply more content to play in a new, state of the art stadium (relative to the time period) an investment into the teams’ facilities could improve the short term success of the franchise. An investment, even at absurd dollar amounts, is well worth it
.

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