Publication Date
4-19-2020
School
School of Business
Major
Business: Finance
Keywords
baseball, MLB
Disciplines
Finance and Financial Management | Sports Management
Recommended Citation
Holtschneider, Sarah, "Payroll Disparity Among Major League Baseball Teams: Building a Competitive Team Despite Limited Resources" (2020). Senior Honors Theses. 971.
https://digitalcommons.liberty.edu/honors/971
Abstract
There has been an inequality in payroll among Major League Baseball teams for many years that became increasingly evident in the late 1990s. Revenue disparities among teams cause a competitive imbalance for the league and make it harder for small-market teams to compete with large-market teams with much higher payrolls. MLB has attempted to alleviate this disparity, but the implementation of revenue sharing and the competitive balance tax alone is not enough for small-market clubs to build a competitive team. There are a number of ways that small-market clubs can build a competitive team despite limited resources, including employing the moneyball hypothesis, quantifying market inefficiencies, utilizing the team’s farm system, taking advantage of trade opportunities, and making intelligent contract decisions.
