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Baseball’s Blue Ribbon Economic Report

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  • E. Woodrow Eckard

    (University of Colorado at Denver)

Abstract

In July 2000, Major League Baseball published a report claiming a recent marked decline in competitive balance. The alleged cause is growing disparities in team revenues and payrolls driven ultimately by market size. Consequently, sweeping changes in the game’s economic structure are necessary, mainly composed of new labor market restrictions. The report, however, fails to present evidence of a decline in competitive balance or of a significant link between market size and winning. The present study seeks to provide the missing analysis. Although competitive balance might have declined in the American League (AL), it improved in the National League (NL). The difference is important, as both leagues are subject to the same governance structure—that is, the AL decline is likely due to idiosyncratic causes. Also, there is (at most) a weak relation between winning and market size that has not worsened in recent years.

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Bibliographic Info

Article provided by in its journal Journal of Sports Economics.

Volume (Year): 2 (2001)
Issue (Month): 3 (August)
Pages: 213-227

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Handle: RePEc:sae:jospec:v:2:y:2001:i:3:p:213-227

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Cited by:
  1. Booth, Ross, 2005. "Comparing Competitive Balance in Australian Sports Leagues: Does a Salary Cap and Player Draft Measure Up?," Sport Management Review, Elsevier, vol. 8(2), pages 119-143, September.
  2. Ross Booth, 2005. "Comparing Competitive Balance In Australian Sports Leagues, The Afl, Nbl And Nrl: Does The Afl'S Team Salary Cap And Player Draft Measure Up?," Development Research Unit Working Paper Series 02/05, Monash University, Department of Economics.
  3. Joel G. Maxcy, 2006. "Revenue Sharing in MLB: The Effect on Player Transfers," Working Papers 0615, International Association of Sports Economists & North American Association of Sports Economists.
  4. Joel G. Maxcy, 2007. "Progressive Revenue Sharing in MLB: The Effect on Player Transfers," Working Papers 0728, International Association of Sports Economists & North American Association of Sports Economists.
  5. Young Lee & Rodney Fort, 2008. "Attendance and the Uncertainty-of-Outcome Hypothesis in Baseball," Review of Industrial Organization, Springer, vol. 33(4), pages 281-295, December.
  6. Sung Il Hong & Michael Mondello & Dennis Coates, 2011. "An Examination of the Effects of the Recent Economic Crisis on Major League Baseball (MLB) Attendance Demand," Working Papers 1123, International Association of Sports Economists & North American Association of Sports Economists.
  7. Allen R. Sanderson & John J. Siegfried, 2003. "Thinking About Competitive Balance," Vanderbilt University Department of Economics Working Papers 0318, Vanderbilt University Department of Economics.
  8. Rockerbie, Duane, 2011. "The Invariance Proposition in Baseball: New Evidence," MPRA Paper 55020, University Library of Munich, Germany.
  9. Paul, Rodney J. & Weinbach, Andrew P., 2012. "Competitive balance in the NFL?," Edition HWWI: Chapters, in: Zur Ökonomik von Spitzenleistungen im internationalen Sport, pages 73-84 Hamburg Institute of International Economics (HWWI).

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