O' What A Game

A recent Washington Post article illustrates a perfect example of the spatial location theory in the realm of sports franchises. Washington recently received a new baseball team, the Nationals, after the Baltimore Orioles had the only team in the area for several years, effectively breaking the local baseball monopoly. The two teams now compete for fans from the affluent suburbs of Maryland and Northern Virginia, a battle that the Nationals appear to be winning.

"Since the Nats came to town, they've wrestled with the O's for undecided voters, especially in wealthy suburbs in Maryland between the two ballparks. This season has finally done the trick."

The Nationals and the Orioles are located in efficient points where in an ideal world they would offer the lowest costs to consumers meaning that they are located close enough to fans in their respective areas. Fans from Northern Virginia no longer have to travel long distances to Maryland to go see a baseball game when they can just cross the border over to DC. This theoretical equilibrium is thrown off however because the two teams are not selling identical products. For one, the Nationals are a much better team with a brand new stadium which is preferred by some to the older Baltimore stadium. Also, the rich suburbs of Virginia are expanding rapidly giving the nationals a wealthier fan base than the one in the surrounding Baltimore area. Would it make sense for the Orioles to move their team to gain better access to customers, or would simply improving their product be a more cost effective move?