Sources of Revenue of Major League Baseball Teams
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Major league baseball teams generate revenues from a variety of sources. Although revenues from television contracts generate the greatest contemporary interest, ticket sales continue to be an important source of revenue in major league baseball. The national television contracts negotiated in 1988 represented a 102 percent increase in national television revenues over the prior contracts (Staudohar 33). Local television contracts provide substantial additional revenues for major league baseball teams located in large markets, while teams in smaller market benefit much less from such revenues (Bernstein 40). Total revenues in major league baseball increased from $718 million in 1985 to approximately $1.4 billion in 1990 (Zimbalist xiii).Revenue generation in baseball began in the 1860s, when a few teams began to enclose their playing fields and charge a small admission fee, typically a quarter, to watch the games (Goldstein 84). Between that time and the contemporary period, owners of major league baseball teams have not always demands that the teams be profitable at least not directly. Anheuser Busch, as example, used the St. Louis Cardinals as a marketing promotional vehicle for Budweiser beer (Zimbalist 32). Anheuser Busch profits stemmed from the sales of Budweiser, and a contending St. Louis Cardinals baseball team was a part of the promotion effort for the beer. While there may be some philosophical objections to such a use of a commercial sports franchise, t
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he financial capacities of large market teams and small market teams to pay exorbitant player salaries, the issue of revenue sharing becomes linked with the issue of salary caps (Staudohar 36). National television revenues and license sales revenues are already shared equally among major league baseball teams. Gate receipts are shared on an unequal basis between home and visiting teams. The goal of current revenue sharing proposals is to gain an equal division for all major league baseball teams of local market broadcast revenues. Through a combination of this type of revenue sharing and the imposition of salary caps, proponents of such action contend that major league baseball will benefit because all teams will be able to survive, and that the resulting increase in competitiveness will benefit all teams. Both the National Basketball Association and the National Football League have such programs (Collingwood 39).
Local broadcast revenues are central to the revenue charing concept in major league baseball. A comparison of local broadcast revenues by major league baseball team in 1993 is presented in Table 2, which may be found beginning below on this page.
Table 2
Local Broadcast Revenues 1993
Major League Baseball By T
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Approximate Word count = 4072
Approximate Pages = 16 (250 words per page)
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