ch agreements specify the proportion of minor league player salaries that will be paid by the major league clubs with which minor league clubs are affiliated, as well as specifying other minor league expenses that will be borne by major league clubs (Zimbalist, 1992, p. 112). Thus, while the negotiating positions of the parties to the Player Development Contracts, the equity of the provisions of the agreements, and so forth are not relevant to this current research, those elements of the agreements that directly affect minor league baseball revenues and expenses are considered in this examination.
The antitrust exemption granted by the United States congress to professional baseball exempts both major league and minor league baseball from prosecution for collusion in the setting of prices, the control of markets, and so forth (Miller, 1991, pp. x-xi). While a case may be made to the effect that the antitrust exemption exerts a positive impact on the financial structure of baseball--both major league and minor league, such an argument is essentially irrelevant to this current research because the existence or non existence of the exemption would not affect materially the revenue and expense ratios of minor league baseball. The Minor League Revenue and Expense Structure
A minor league baseball team in many respects is much like any other business with respect to revenue structure. The primary revenue, upon which any eventual profit will be based, is dependent upon sales. The typical ticket price to attend a minor league baseball game is $5.00. All of the top Class A league teams reported attendance in 1993 in excess of 200,000 paid fans (Waddell, 1993b, pp. 13-14). Thus, ticket revenues for a successful Class A club will approximate $1.0 million per year. The Class AAA Buffalo club drew 1,058,620 paying fans in 1993, with ticket revenues in excess of $5.5 million (Waddell, 1993a, pp. 34-36). T...