Can Padres Take Advantage Of Lone Franchise Status?

The Padres are about to wade into unfamiliar territory. With it will come potentially lucrative business opportunities.

With last month’s announcement the NFL’s San Diego Chargers were relocating to Los Angeles, the Padres became the only major professional sports franchise in San Diego.

As such, San Diego becomes the lone MLB-only market in North America. All other 29 MLB teams share their markets with at least one other major professional sports team from the NBA, NFL, and/or NHL.

In the view of David Carter, the executive director of the Sports Business Institute at the University of Southern California’s Marshall School of Business, that puts the Padres in an opportunistic position.

“There’s a potentially very important business development part of this,” Carter said. “Now that (the Padres) have the market to themselves, it will really help them with gaining advertisers and sponsors trying to reach sports fans and consumers. An NFL fan is not exactly the same as a baseball fan, but any time you have fewer competitors in the marketplace, the better opportunity for you to move the needle in terms of advertising or sponsorship, whether that’s radio or selling suites and signage in venue.

“That, and they now have the ability to capture some of that disposable income fans were spending on the Chargers and divert some of that through some great marketing and other campaigns. Even if it’s just a little bit, it can be a boon for the Padres.”

San Diego is the first MLB-only market since Baltimore from 1984-1995, in between when the Colts left for Indianapolis and the NFL returned with the Ravens in 1996.

Other sports leagues have had varying success with single-team markets. The NBA has seen long-term competitive and financial success with the San Antonio Spurs, Portland Trail Blazers, Oklahoma City Thunder and Utah Jazz, but less so with the Memphis Grizzlies, Orlando Magic and Sacramento Kings. The NHL’s San Jose Sharks have fared well, but the Columbus Blue Jackets and Carolina Hurricanes (the league’s only U.S. single-team markets) are largely at the bottom of the league in terms of long-term success and revenue. The Jacksonville Jaguars have long been a flop as the only single-team market in the NFL.

“From a Padres perspective, from a baseball perspective, it’s a different dynamic (than other sports) because you’re talking about so much more inventory, so many more games at Petco (Park),” Carter said. “It puts a lot of increased focus on the franchise in terms of their ability in the community. They have a lot more room to be an integral part of the community. They don’t have to share that space with other franchises. It gives them a chance to message what they stand for, what they’re all about, without a lot of clutter in the marketplace.”

The Padres do have a leg up on the aforementioned single-team market franchises. All of them were expansion franchises in markets with no previous major professional sports team experience. The Padres have been in San Diego since 1969 and have a long-held imprint in their market that spans generations.

That existing community foothold and the allure of Petco Park has them set up for the road to success, Carter said, although he added the franchise has to be wary of taking it for granted.

“I think the corporate experience, the fan experience at Petco despite a losing record has been a really compelling one,” Carter said. “People think very favorably of the location of the venue, they enjoy the Gaslamp District, the food and beverage options, especially compared to what was going on at Qualcomm Stadium. From that standpoint, winning matters a tremendous amount, but also, great customer service matters a lot.

“(But) the notion that ‘We don’t have to try because we’re the only show in town’ I think that’s a pretty dubious route to take and fans see through it,” he added. “Any business resting on their laurels, especially if the laurels are not strong, that’s a failing strategy going forward. Taking for granted that you have the market to yourself would be just as detrimental as not performing in the market now that you have it all to your own.”

Major League Baseball declined comment on the Padres’ transition to being the lone major sports franchise in their market.

For their part, the Padres issued a statement from chairman Ron Fowler and managing partner Peter Seidler shortly after the formal announcement the Chargers were relocating.

“We are deeply disappointed by the news that the Chargers are leaving San Diego,” the statement said. “The Chargers are a community treasure, and we have always believed that San Diego is better off with the team here. That said, we know San Diego will continue to grow and become an even more vibrant community.”

If they play their cards right, the Padres will play an integral part in making that happen and stand to reap the rewards.

“They should have been preparing for either of those eventualities, the Chargers staying or leaving,” Carter said, “so, they should be well into the planning of how to activate now that they have the market to themselves.”