Baseball Revenue Sharing
As the seasons progress in major league baseball, the economic structure of baseball is suffering from numerous problems, which are currently allowing for the competitive balance to be less than ideal. Baseball is faced with problems amongst the revenues, which there teams are receiving. This disparity in revenues is causing some teams to not be able to sign players that they need to compete: whereas, teams like the Yankees, and Braves can go out and sign basically whomever they want, and have payrolls, which are surpassing 100 million for a season. What I propose to do, in order to solve the problems with baseball is to revamp the current Luxury Tax system, come up with a minimum and maximum salary level, and develop a revenue sharing program, which will help the lesser teams out. I feel that these changes will allow for baseball to be more competitive every season, and would allow some small market teams not to move. Baseball is in need of Restructuring due to the current disparity amongst all the teams in terms of revenues. When considering any possible changes in the baseball structure, you must consider them from three different perspectives. Owners
The key component in the restructuring of baseball is to increase the amount of revenue that each team visiting team receives from the gate split and other performance incentives. The problem lies in the fact that the percentages are not even the same throughout, the two leagues (American and National Leagues.) Currently, in the American League the home team keeps 80 percent while the visiting team gets 20 percent. In the National League, the home team-visiting team split is 95 percent home team, 5 percent visiting team. Along with the gate split, the sharing of local media revenues, which currently are not shared at all and these are the largest source of inequality amongst all the teams. What I think needs to be done is to have the Home team get 75% of the revenue, where the away team receives 25%. Newhan, Ross. "Baseball: Pay Dir." Los Angeles Times. 10 Nov 1999: D. Rottenberg, Simon. "The Baseball Player's Labor Market." Journal of Political Economy June 1956: 242-258. Major League Baseball is at a point where they cannot afford another work stoppage like they had in 1994. If the gap between the have's and the have-nots continues to grow, the sport of baseball may be in danger of becoming less popular of a sport than it is now. What I feel baseball should do in an attempt to rejuvenate the competitive nature of the game is revamp the current luxury tax system so that the teams that go over a certain salary level pay a tax on that number. The beneficiaries of this tax will be those teams, which are in the bottom 8 in revenue in the league. My next way to solve the problems was the idea of setting a minimum, and a maximum salary. The minimum payroll at $35 million, and the maximum at $100 million. My luxury tax would start above $75 million. And the final way, I mentioned to fix the problems in baseball was to change the revenue sharing, so that in both leagues the home team receives 75% of the funds, versus 25% for the visitors. What I think would work good for Major League Baseball would be to develop a minimum and a maximum salary for which teams cannot go under or over. The way, which this minimum and maximum should be derived is through how the NBA does it, the cap will be based on a percentage of league revenues, and then a number will be assigned based on that number. One of the most storied broadcasters Bob Costas said the objective of a salary cap is to "enhance the competitive balance and stabilize the game's economics. What it does salaries is an important but secondary concerns." (Costas 92) The only major drawback with setting a salary cap is that the small market teams are going to want to spend the minimum amount of money necessary for survival in the game. It is for this very reason why Major League Baseball (MLB) must derive a minimum salary for all the teams like the Twins, Expos and Royals so that the m
Some common words found in the essay are:
Luxury Tax, League Baseball, National League, League Baseball's, Rupert Murdoch, Alex Rodriguez, Dombrowski Payroll, Restructuring Baseball, Expos Royals, Bob Costas, luxury tax, revenue sharing, market teams, major league, major league baseball, league baseball, competitive balance, minimum maximum, visiting team, salary cap, home team, minimum maximum salary, current luxury tax, revamp current luxury, luxury tax system,
Approximate Word count = 1925
Approximate Pages = 8 (250 words per page double spaced)
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