Economic Gap in MLB ENC1102 Research Paper

Economic Gap in MLB ENC1102 Research Paper - Majewski Tony...

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Majewski Tony Majewski Lepschy ENC1102 April 20, 2007 The Economic Gap in Major League Baseball America’s Pastime has been around since 1846 (“Baseball” n.pag.) and is considered one of the purest sports left today. Since then baseball has turned into a revenue machine, which brings up a major point in today’s baseball economy. The revenue gaps between the small market teams and the large market teams are monstrous. Teams like the New York Yankees and the Boston Red Sox are bringing in over $60 million a year in revenue and are able to afford their $100+ million payrolls. All payrolls are steadily increasing, and teams with low revenues cannot keep up. Major League Baseball’s revenue sharing policy isn’t strong enough to help level the playing field for small market teams. The current revenue sharing system split up $326 million to all 30 Major League teams, and it isn’t scheduled to change in the next 4 years. Each team is currently taxed based on its current revenue, 31% tax, and the money is dispersed (“MLB” n.pag.). In 2006, four Major League Clubs (Marlins, Devil Rays, Pirates, and Royals) received more money through revenue sharing than they were spending on their payroll. Now, it is hard to believe that these teams are losing money when they are raking in around $30 million, before they even sell tickets or bring in their broadcasting money (Stark n.pag.). There are three groups of people on this issue… the one that want no change, the one that wants more sharing, and the ones that want less. It makes sense that Clubs shouldn’t be allowed 1
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Majewski to receive $30 million if their not going to put it towards improving their roster through an expanded payroll, so some call for a “minimum payroll” or to just give it back to the MLB (Stark n.pag.). “The lower-revenue teams, even with revenue sharing, do not have enough money to compete,” said Jerry Reinsdorf (qtd. In Brown n.pag.). This just goes to show that the bar needs to be raised in revenue sharing. When looking at how the high revenue teams are doing versus the lower revenue teams, it shows that the system is not doing enough to level the playing field. In 2002, the New York Yankees brought in $40.86 million and were taxed $26.5 million to be put towards revenue sharing (Pappas n.pag.). Sure, this may seem like a huge amount, but the Toronto Blue Jays lost $52.9 million and only
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Economic Gap in MLB ENC1102 Research Paper - Majewski Tony...

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