Recently, I found myself in a Twitter discussion with Josh Rodrigues, an assistant coach for the Bourne Braves. Josh had retweeted a video that displayed every MLB team and the progression of their wins since 1980. Other than the expansion teams, which were founded after 1980 and thus don’t have at least a decade of wins, the line was more or less horizontal.
This led me to respond “the MLB has the best competitive balance of any major sports league #revenuesharing.” Rodrigues saw this and replied, “Don’t like the soccer model? #capitalism.”
I realized that it really is socialism versus capitalism, and that struck me. As the conversation progressed, Rodrigues mimicked having been shocked by that same statement. “Someone said it once and it clicked, USA loves capitalism unless it’s sports.”
For those unaware, the MLB has made large strides in an attempt to maintain competitive balance. The idea of competitive balance is to ensure that all teams have an equal opportunity to succeed and no one team is completely and totally dominant over others for an extended period of time.
So how do we prevent a team like the Yankees from winning every single year and prevent a team like Tampa Bay from finishing last every year? Revenue sharing. Teams have to share their money to ensure the success of teams in smaller markets.
At this point, you may be wondering why we’re looking at baseball instead of football, hockey, or basketball. Yes, I’m our MLB columnist so I’m biased. But baseball is also different from these three other sports in major ways. The NFL’s revenue is mostly made on a national stage. With so few games to broadcast, all games are shown on a national level. This creates a balance for teams, at least in terms of broadcast revenue.
Also, unlike the NFL and NBA, the MLB has no salary cap. What they have instead is a “luxury tax”. Essentially, you’re fined for going over a certain payroll and the fine increases the more frequently a team exceeds the limit. The problem, though, is that for a team like the Yankees or the Dodgers, that fine is miniscule compared to the amount of money they have. The tax in itself is not enough to maintain competitive balance. That’s where revenue sharing comes in.
The competitive balance problem was identified in the 1990s, mostly because of the dominance of the Yankees, but that’s not the only reason. During the decade, 158 playoff games were played. Teams with a payroll in the bottom 14 didn’t win a single one. It’s a shocking truth that makes you grateful that the Royals could win a World Series and then go back to being terrible.
In the latest Collective Bargaining Agreement, teams pay 31 percent of their local revenue, which is then split evenly and redistributed to the 30 teams. Additionally, there’s an MLB Central Fund that is composed of things like national broadcasting contracts, and that money is distributed disproportionately to teams with low revenue intake. Socialism.
So, let’s turn to a sport that has never been popular in America. Almost every soccer league in the world uses a system of promotion and relegation. As an example, we’ll look at England. All soccer fans are familiar with the Premier League, the top league in the country (comparable in scale to the MLS, except with more talent). Below it is a series of leagues, each slightly more popular and powerful than the other.
The Premier League has 20 teams. At the end of the season, the three teams in last place are immediately relegated to a lower level (Championship League), while the top two teams, plus a team that wins a four-team playoff, are promoted to the Premier League.
Sounds easy enough, right? The teams that don’t perform well are punished, and teams that do are rewarded. It’s capitalism at its finest. However, it does pose some significant problems.
Typically, when a team is relegated, their revenue takes a hit. A huge hit. Like, they sometimes go completely bankrupt. Typically, this happens because the top-tier athletes competing on the world’s biggest stage want to stay there, so they ask to be traded. With them goes a loyal fan base and any revenue a loyal fan base brings in, which is a lot.
Here’s another problem: what happens when a historic Premier League team is on the verge of relegation? A prime example of this would be Liverpool just a few years ago. This is a team that has won 18 League titles, second only to Manchester United. In the 2010-2011 season, they got off to such a bad start that they landed in 19th place in the league.
Even though they ultimately recovered, a lot of people had to question what happens to a team with such an incredible legacy if they find themselves in the position to be relegated.
This was a team composed of soccer giants like Pepe Reina, Steven Gerrard, Dirk Kuyt and Luis Suarez. At the time of the struggle, they still had Fernando Torres. What happens when all of these stars end up in a lower league? Clearly the system isn’t perfect from the perspective of a fan, but the market loves it and soccer fans are used to it.
So, how would you feel if your MLB team was suddenly an MiLB team? We probably wouldn’t handle that change well. Both systems have their ups and downs, and fans have adjusted to the system enough to not be upset by it. But the next time your large-market team must sacrifice revenue to smaller teams, remember that it could be a lot worse.
Rachel Schaefer is a campus correspondent for The Daily Campus. She can be reached via email at email@example.com.