One of the challenges in professional sports is creating a level playing field for all teams in order to have a more competitive league. This has been most successful in the NFL where television revenues are the most lucrative. Since there are more television revenues for the NFL, there’s more money to be divided up among the teams. However, what has given the NFL the edge, is the addition of salary caps, which prevent the big market teams from always cornering the market on star players. Does anyone think that the same strategy would work in the MLB in creating a more competitive balance among teams?
The MLB has not been as successful as the NFL in creating a competitive league. The book states that the “perceived competitive balance issue can be largely attributed to the revenue disparity among teams’ local television revenues.” Teams like the Yankees and Red Sox largest revenues come from their own television stations (YES and NESN) where advertising dollars directly pad the wallets of the owners.
If you were Bud Selig how would you leverage revenue disparity among teams? If you are not a big market club how would you go about raising revenues? An argument that the big market teams have is that their revenue is being used to help their competition bolster their teams. Do you think this robin hood approach is fair?
In chapter 17 Mondalo also discusses the economics of collegiate sports. He notes that the NCAA owns the rights to just its championship events. As a result universities and conferences can negotiate their own broadcasting contracts. With the increased exposure of college sports on television the acquisition of star athletes by colleges and universities becomes more important than their academic credentials. If colleges focus more on acquiring “jocks” rather than “brains” do you think colleges academic standards will decline?
Here’s an article from 2005 on the Yankees and revenue thoughts.. http://www.usatoday.com/sports/baseball/columnist/bodley/2005-04-07-bodley-revenue-sharing_x.htm
Another article on baseball revenues
http://www.forbes.com/2006/04/17/06mlb_baseball-team-valuations-cx_mo_0420sports.html
NFL revenues from 04
http://www.usatoday.com/sports/football/nfl/2004-07-05-revenue-cover_x.htm
6 comments:
Major league baseball has suffered from horrible ratings, and the lack of a salary cap is what it stems from. The current ARod situation should point that out. ARod's agent threw out the numbers 8 year, 300 million dollars. In addition to being absurd and quite frankly unmerited, this also is unfair. Only 5 teams in baseball even make enough to afford a contract like that. The lack of a salary cap has literally made it so that only big market cities can pay and hold onto big time players. This also explains why when young teams liek the Marlins make a run for a world series, they are almost immediately disbanded. Young players make a name for themselves and then only the Yankees, Red Sox, White Sox, Cubs, Mets and Dodgers can afford to have them. Whats even more upsetting is that of those six teams, only two of them are routinely good. What reason do non coastal or non-illinois fans have to watch baseball if their teams are only good once a decade and then they only see their young players for a year or two? The NFL formula does work and not just for competitiveness. We see fans selling out EVERY stadium. We see players willing to take paycuts to win. And we see the most competitive product on television. Bud Selig is a weasel, criminal, idiot.
Small market teams do win in baseball.
Look at the current teams in the playoffs. The Rockies, Indians, and Diamondbacks are all still alive.
You can spend 1 billion dollars wrong and be a last place team, you can spend 50 million correctly and be a championship caliber team.
It has nothing to do with needing a salary cap, it has to do with smart owners and smart general managers.
Despite the fact that a couple small market teams are still alive, MLB definately needs a salary cap. Like Jared mentioned in his post, players make names for themselves on small-market teams and then leave to only a few select teams to go make the big money. It will be interesting to see how many of these young players on the Diamondbacks, Rockies, and Indians that are making a name for themselves this year stay on those teams in a few years when their contracts are up. I'm a Yankees fan and I still think it is a disgrace how baseball works when it comes to a lack of a salary cap. A-Rod opting out and being a free agent should be a huge story in terms of the lower teams looking to sign him and change the face of their franchise, but the story is what team out of the typical teams like the Red Sox, Yankees, and Cubs can sign him. I think this issue has alot to do with why there is little to no nationwide interest in the NLCS right now, and if the Indians win the ALCS that the World Series is in serious trouble of having its worst ratings ever.
The NFL has it totally right when it comes to the salary cap and spreading out the money from the TV contracts. Football is the most competitive sport right now, as every team and their fans has realistic hope coming into every season. Baseball should really watch how football and its salary cap operates and try to mimick it a little bit.
As far as college sports go, as bad as it might sound to say this, I think there are a number of schools that already focus more on acquiring jocks than the brains. The fact is that college sports, especially football and somewhat basketball, make these schools alot of money and that is what it is all about.
I think that Kristina’s idea about the salary cap would definitely help, it not work in the MLB. Teams like the Yankees and Red Sox continuously bring in so much money that it is so easy for them to put together a dream team every year. However, because of their revenue, it is nearly impossible for other teams to compete for a World Series year after year like the Yanks and Sox are able to do. Being a Red Sox fan, I don’t hate that we make it to the playoffs every year. But I certainly think that in order to level the playing field so that other cities actually want to watch baseball in October, there should be a tighter belt on the salary cap. I think that colleges already look at jocks instead of brains…and I think that Division 1 universities no only can do that but should do that. Ya college is about getting an education, but how many people are fans of Notre Dame because they have amazing geometry classes? People all over the country have a devotion to college athletics and I think that colleges should keep up with that. Just because the valedictorian doesn’t get into ND and the Hoover High running back does, well ND is going to make back the valedictorians tuition bill 10 fold when they win a national championship because the running back ran for 200 yards a game…and in the end all anyone cares about it making money.
I pretty much just laughed out loud in the middle of the library at Joanna's geology class comment. And I agree, I mean how many people sit back to watch a bowl game and actually think about whether or not the school is good academically? I know that I sure don't. I'm surprised no one brought up the issue that many feel college athletes should be paid for what they do on the field.
I'm totally going to relate this to television for a second, and don't hate me, but I love the show "Friday Night Lights" and this weeks episode featured a star college player getting hauled into a disciplinary meeting because he accepted Justin Timberlake tickets from someone, (I think his exact defense was "white boy gots moves") and, as we all know, college athletes aren't supposed to recieve gifts from supporters or donors. My point is that the show brought up a good issue, if these players bring millions of dollars worth of revenue to the school, why shouldn't they be paid in addition to the education they are recieving?
I think that a salary cap is pretty much a waste of time when it comes to baseball. Teams like the Yankees and the Red Sox can afford to pay star players the big bucks because they bring in so much more revenue because of the markets they play in. Sorry, but lets face it, no one is ever going to care about the Diamondbacks, so lets just keep Americas favorite teams the way they are and hope that they perform so that they can be continue to be watched at a national level in the playoffs. A salary cap in the NFL is different because the NFL has no clear cut "leader" when it comes to "America's favorite team" like MLB does. (example, on most Sunday's Elis on Whitney is packed with members of the Steeler Nation, Pittsburgh fans in CT.. not uncommon... there aren't crowds gathering at sidestreet to watch the Pirates play...)
Okay my point is, the NFL just kicks ass.. and no one is ever going to comepete with the way they handle their league.
Sorry for the long rambling post, but its been a long day, and only going to get longer from here. Hope everyone is surviving midterms!
I am a huge fan of the way the MLB is structured but certainly would not be opposed to the salary cap. However I do not mind that there is no salary cap now. I am actually on the side that believes if the bigger market team can create more revenue then they should be able to spend more money. Yes this seems unfair but baseball does have this little thing called the "luxury tax." By having a luxury tax, teams who spend the most money and spend over a certain amount of money are required to pay money back to Major League Baseball that is then distributed to the smaller market teams. For example a team like the Florida Marlins every year will receive about 20 million dollars at least from the luxury tax. Unfortunately their owners are reluctant to put this money back into their team. As a result their payroll is very small every year and people are led to believe this is because they are in s small market and are not receiving the fan base. However from the money they receive from revenue sharing, they should still be able to spend more money than they currently are.
As far as college athletics go, there are very few schools that require to athletes to meet the schools academic standards. The school makes so much money off of their football and basketball athletes that it is not in their best interest to hold them to the same academic standards as a regular student who earns their way into school on the academic bassis. However, my favorite college football team, Notre Dame, has actually been criticized for their stringent academic standards of their athletes. It has been argued that there acadmeic standards have been the reason their football team has declined in recent years. While other colleges are bending their rules to accept athletes, Notre Dame remains strong for the most part and have actually lost several recruits over the past years because they have not met the academic standards. The NCAA appears to be cracking down on academics this year as I have noticed many athletes becoming ineligible however there needs to be a more pressing interest by these athletes to perform well in school. Most of them go to school with the intention of making it to a professional level, the one who do not and do not take school seriously are left with a rude awakening. However, college academic standards will never decline because of athletics. In the grand scheme of things, college athletes make up an extremely small percentage of college students. Division 1 can offer full scholarships, after that the money that can be gauranteed to an athlete in the D2 or D3 level is minimal if nothing at all. If you are not a division one athlete you virtually need to have your grades in order or you will not be going to college. As a result I don't think that choosing "jocks" over "brains" will hurt a colleges academic standards at all.
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