Baseball – Revenue Sharing

Published: 2021-07-16 17:10:07
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Category: Sports

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One of the most interesting things regarding my research of the MLB is the system that they use to pay the teams of the league called revenue sharing. Revenue sharing is when all of the 30 teams in the league give in 31% of their total local revenue, which is then divided and equally dispersed to each team (Revenue Sharing). Teams acquire the majority of their revenue locally through things such as television contracts, concessions, ticket sales, partnerships/sponsorships, and team merchandise. This system is in place to improve competitive balance; it rearranges the money made in the MLB from profitable teams to less wealthy teams in hopes to improve their capability of appealing to the better and more expensive players (Fontinelle). In simple terms, the New York Yankees, the richest team in the league, gives in more money than they recoup and the Tampa Bay Rays, poorest team in the league, receives more money than they put in (Business).
Before my research, I was unaware that there was a specific system in the MLB to prevent dominant teams in the league from having an unfair advantage over the less successful clubs; I used to think that all teams received the same amount of compensation. This is sociologically interesting because it gives underprivileged teams the opportunity to compete with affluent teams. The idea behind revenue sharing is for a manager to take the money they have received and invest it in the goal to rebuild their roster, overall improving their team as a whole. Baseball’s collective bargaining agreement states ‘each club shall use its revenue-sharing receipts in an effort to improve its performance on the field’ and prohibits use of that money to service debt related to franchise acquisition and service to debt not related to improving on-field performance (The Associated Press).
Although the principles of revenue sharing are established to combat structural inequality, there have been instances where smaller market teams abuse the money they are given for the reasons listed in the quote above. In fact, recently, the Miami Marlins, Oakland Athletics, Pittsburgh Pirates, and Tampa Bay Rays have been suspected of inappropriately using spending their revenue sharing payments (The Associated Press). The idea of the conflict theory presents itself in this situation since the society of the MLB is in eternal conflict as teams compete for limited resources. Even though big name teams such as the Cubs and Yankees pay in millions of dollars for revenue sharing, they try to retain their wealth and power preventing smaller teams from moving up in the system.

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