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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.

Suggested Citation

  • E. Woodrow Eckard, 2001. "Baseball’s Blue Ribbon Economic Report," Journal of Sports Economics, , vol. 2(3), pages 213-227, August.
    • Handle: RePEc:sae:jospec:v:2:y:2001:i:3:p:213-227
    DOI: 10.1177/152700250100200302
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    References listed on IDEAS

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    1. E. Woodrow Eckard, 2001. "The Origin of the Reserve Clause," Journal of Sports Economics, , vol. 2(2), pages 113-130, May.
    2. E. Eckard, 1998. "The NCAA Cartel and Competitive Balance in College Football," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(3), pages 347-369, June.
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    4. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
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    Cited by:

    1. Paul, Rodney J. & Weinbach, Andrew P., 2012. "Competitive balance in the NFL?," Edition HWWI: Chapters, in: Büch, Martin-Peter & Maennig, Wolfgang & Schulke, Hans-Jürgen (ed.), Zur Ökonomik von Spitzenleistungen im internationalen Sport, volume 3, pages 73-84, Hamburg Institute of International Economics (HWWI).
    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?," Monash Economics Working Papers 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. 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.
    5. Liam J. A. Lenten, 2017. "A Formal Test for Asymmetry in the Uncertainty of Outcome Hypothesis," Journal of Sports Economics, , vol. 18(3), pages 253-270, April.
    6. E. Woodrow Eckard, 2003. "The Anova-Based Competitive Balance Measure," Journal of Sports Economics, , vol. 4(1), pages 74-80, February.
    7. 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.
    8. Young Lee & Rodney Fort, 2008. "Attendance and the Uncertainty-of-Outcome Hypothesis in Baseball," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(4), pages 281-295, December.
    9. Robert J. Lemke & Matthew Leonard & Kelebogile Tlhokwane, 2010. "Estimating Attendance at Major League Baseball Games for the 2007 Season," Journal of Sports Economics, , vol. 11(3), pages 316-348, June.
    10. András Gyimesi, 2020. "League Ranking Mobility Affects Attendance: Evidence From European Soccer Leagues," Journal of Sports Economics, , vol. 21(8), pages 808-828, December.
    11. John R. Crooker & Aju J. Fenn, 2007. "Sports Leagues and Parity When League Parity Generates Fan Enthusiasm," Journal of Sports Economics, , vol. 8(2), pages 139-164, May.
    12. Nicolas Scelles & Christophe Durand & Thierno Bah & François Rioult, 2011. "Intra-match competitive intensity in French football Ligue 1 and rugby Top 14," Post-Print halshs-02110792, HAL.
    13. Liam J. A. Lenten, 2009. "Towards a New Dynamic Measure of Competitive Balance: A Study Applied to Australia’s Two Major Professional ‘Football’ Leagues," Economic Analysis and Policy, Elsevier, vol. 39(3), pages 407-428, December.
    14. Allen R. Sanderson & John J. Siegfried, 2003. "Thinking about Competitive Balance," Journal of Sports Economics, , vol. 4(4), pages 255-279, November.
    15. Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
    16. 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.
    17. David G. Surdam, 2002. "The American “Not-So-Socialist†League in the Postwar Era," Journal of Sports Economics, , vol. 3(3), pages 264-290, August.
    18. Rockerbie, Duane, 2011. "The Invariance Proposition in Baseball: New Evidence," MPRA Paper 55020, University Library of Munich, Germany.
    19. Travis Lee, 2010. "Competitive Balance in the National Football League After the 1993 Collective Bargaining Agreement," Journal of Sports Economics, , vol. 11(1), pages 77-88, February.
    20. Meletakos, Panagiotis & Chatzicharistos, Dimitrios & Apostolidis, Nikolaos & Manasis, Vasilios & Bayios, Ioannis, 2016. "Foreign players and competitive balance in Greek basketball and handball championships," Sport Management Review, Elsevier, vol. 19(4), pages 391-401.
    21. Rodney Fort & Joel Maxcy, 2003. "“Competitive Balance in Sports Leagues: An Introductionâ€," Journal of Sports Economics, , vol. 4(2), pages 154-160, May.

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