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May 25, 2008

Richard Florida

Mega Ball

« The National | Main | Toronto (Science) Rising »


Mike Tanier over at Football Outsiders sees the power of the mega-region:

Buffalo has long been one of those in-between cities: small by international standards, but large enough to host the Bills and the NHL Sabres. Now, Buffalo is close to losing some of its big-league luster. The Bills will play three preseason and five regular season games in Toronto, starting this year and ending in 2012. The so-called Toronto Series is a likely precursor to a permanent move to Canada. ...

This region spans two nations: the Buffalo-Rochester area in western New York, and the Toronto metro area in southern Canada. Toronto is the financial capital of Canada, and if you yoke its economy onto Buffalo-Rochester’s, you get a powerhouse mega-region.

Richard Florida, economist and author of Who’s Your City?, explains the mega-region concept. “Mega-regions are the driving forces of the world economy. A mega-region is an area that hosts business and economic activity on a large scale, generating a lion’s share of the world’s economic activity and an even larger share of the world’s innovation and technological discoveries.” Toronto-Buffalo-Rochester (TBR) is one of just 40 significant mega-regions in the world. According to Florida, it’s responsible for $530 billion in economic output. It also ranks highly among world mega-regions in worldwide innovation patents and what Florida calls “star scientists,” two indicators that TBR is positioned to compete against other regions as a high-tech research and industrial center.

Strapping U.S. and Canadian cities together seems a little disingenuous at first, but Florida explains that it’s vital to everyone’s financial interests to think outside the borders of states and nations. “Much of our public policy ignores the rise of mega-regions and, sometimes, works against them. If we want to bolster economic competitiveness, policy leaders across country borders and state lines must pursue policies that take mega-regions into account.”

Buffalo and Toronto are just a few hours apart; Maple Leafs fans often travel to Buffalo when their teams play the Sabres, and Buffalo baseball fans often take day trips to watch the Blue Jays. By moving across the border and closer to the center of the TBR mega-region, the Bills can acquire a much-needed influx of corporate-caliber cash. “The Bills are like your parents who bought their house 50 years ago,” Robinson explained. “Their mortgage is paid off, so they don’t need a lot of income to get by.” The Wilson family can turn a tidy profit on television revenues, but the next owners will cough up as much as $800 million. They’ll need luxury box revenue and other income sources to offset their initial debts. “We don’t have a deep stable of companies,” Robinson said. “The Bills couldn’t dream of selling a PSL.” Ideally, Toronto would provide the companies, with Buffalo providing the loyal fan base.

It’s one thing to embrace macroeconomics, but quite another to root for a team that sings a different national anthem before games. While Bills fans are among the most loyal in the NFL, Robinson is not sure how many would follow the team to Canada, not when the Steelers, Browns, Jets, Giants, and Patriots offer attractive regional rooting interests. “Over time, it would settle into the relationship locals have with the Blue Jays,” Robinson said. “The Bills would be a nearby team to go to.”

However, the Toronto Series, with its multi-venue format, could help fans acclimate to the idea of a regional team. The Toronto Series allows the Rogers group to use the novelty and rarity of NFL football to charge super-premium prices to Toronto fans. At the same time, the Wilson family gets a $78 million payday from the Rogers group, and can also charge slightly more for games at Rich Stadium because of decreased supply. Over a period of a few seasons, the Wilsons and the Rogers conglomerate could tweak the 7-to-1 Buffalo-Toronto game arrangement. The Bills could end up playing four games in each venue, just as the Packers split time between Green Bay and Milwaukee in the 1970s and 80s.

Some fans may abandon the Bills if they become Canadians or vagabonds, but Florida sees a big difference between a move within the TBR region and a move to, say, Los Angeles. “Economic development, more than ever before, is about talent attraction and retention. Creative types are concentrating in communities that are open, diverse, and thick with an array of amenities. Major league sports help to create an authentic community, one that is appealing and engaging for people of all walks of life.” The designation “major league city” still means something in the world of high finance. Toronto will use pro football to enhance its international profile; the official Toronto Series website (www.billsintoronto.com) touts the city as “international, sophisticated, ethnically diverse, fascinating and passionate about sports.” That designation could apply to the whole TBR region, which could in turn use the Bills as a drawing card. “Authenticity is important to creative workers,” Florida said. “Professional sports teams, similar to a region’s arts community and its unique neighborhoods, help make a region unique.”

The Bills are one of the few things lending “authenticity” to Buffalo; without them (and the Sabres), Buffalo has little to offer that can’t be found in Elmira or Erie, Pennsylvania. “The Bills are our last lingering vestige of being a major league city,” Robinson said. “People take a lot of pride in them.” Re-imagine Buffalo as a small part of a thriving mega-region, and the fans of western New York can keep their allegiance to the Bills.

Even with a border in the way, the mega-region remains a big, growing  "commutable" market.  In Bos-Wash, Philly and DC are becoming the new suburbs so to speak, for those who can't afford or can't deal with the hustle and bustle of NYC but want a more "urban" alternative.  Buffalo can benefit from Toronto's market size and unrelenting growth. Already, Canadians are the no. 1 immigrant group in Buffalo. Who knows?  Eventually, as housing prices continue to rise in Toronto, Buffalo may well be able to capitalize on its huge housing cost advantage, combined with its lakefront, authentic neighborhoods, universities, healthcare system, and arts and cultural assets to begin to attract talent from the mega, and perhaps, the world.

And I'll sure be lining up for my Tor-Buf-Chester Bill's tickets.


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Charles Carrington

This story on London and broadband competition really struck me as being emblematic of the sharp differences between the mega-regions and the rural areas. http://gigaom.com/2008/05/26/in-london-a-glimpse-of-a-broadband-future/

Like rural USA before the "rural electrification" initiatives in the first half of last century, limited information services in rural America is a "cost" of living rural that is not borne by those living in the mega regions.


I am a big supporter of the Tor-Buff-Chester concept however I think that the border needs to be a lot less of a barrier and a faster rail link built in the cluster to realize the potential. The border represents a time barrier (traffic congestion and custom inspections) that especially for passenger rail (take a look at the Via/Amtrak schedule crossing the border) imposes a time tax on integration of the cluster (or attending sports events across the border for that matter).

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