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Revenue-talent sharing leads to lower salaries for players

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1. The value of a league has been demonstrated through the likely elevation of revenues. However, as illustrated in the graphs in the class and readings, sustaining competitiveness in a league requires sharing revenues and talent.

Discuss how revenue and talent sharing leads to lower salaries for players.

With the loss of revenue by larger market teams but lower salaries overall, does a league structure make benefits for owners?

A few years ago Major League Baseball raised the possibility of eliminating low revenue teams and distributing the players to the other teams.

Do you think fewer teams would lead to a more profitable league and higher (or lower) salaries for players? Why? In the end, MLB decided NOT to disband any team.

2. Select any two teams from Major League Baseball (MLB). The only team that you cannot select is the Detroit Tigers. Gather the opening day payroll data for the two teams you selected for the following seasons: 2011-2019, 2021, and 2022. Make a spreadsheet showing in constant or real dollars how much the teams spent for players. Also record the number of games each team won in each season.

What relationship do you observe between real dollar salary levels (player salaries) and wins?

What trends did you observe?

What is or was the marginal cost of more wins to owners?

Reference no: EM133246395

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