Television Revenue Sharing in Baseball Leagues

This research examines the related issues of television revenue sharing and salary caps in major league baseball. This examination provides (1) a brief history of team revenues, (2) a brief history of team salaries, (3) the major league baseball antitrust exemption, (4) a description and an analysis of television revenue sharing and salary caps as these concepts affect major league baseball, and (5) a proposed work model for television revenue sharing and salary caps in major league baseball.

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

. . .
In the United States, business combinations that have the effect of monopoly creation, or restraint of trade are illegal under the antitrust legislation enacted in this country. Depending upon the philosophical and political perspectives of the administration in office and depending upon prevailing economic conditions in the country, however, the application of antitrust laws in the United States tends to vary widely. While President Theodore Roosevelt was known as a trust buster, President Richard Nixon publicly proclaimed that bigness is not necessarily bad in business, a perspective which, in effect, blessed the developing oligopolistic character of most American industries, and which preceded an unprecedented increase in acquisition and merger activity. The essential economic concepts involved in antitrust are monopoly, barriers to market entry, market concentration, and the exercise of monopoly power within a market (Weston 209). Monopoly, of course, refers to singlefirm control within an industry or market. Few, if any, true monopolies exist in the United States, exclusive of regulated public utilities. Monopolistic power, however, may be exercised within an industry by a small number of firms, however. In t
. . .

Some common words found in the essay are:
Yankees Yankees, Richard Nixon, San Diego, Cincinnati Reds, Antitrust Act, York Yankees, Supreme Court, League Baseball, Louis Cardinals, Revenues Major, major league, major league baseball, league baseball, market teams, local broadcast, broadcast revenues, local broadcast revenues, medium market, baseball teams, revenue sharing, antitrust exemption, league baseball teams, revenues major league, salary caps, television revenue sharing,
Approximate Word count = 4578
Approximate Pages = 18 (250 words per page)

More Essays on Television Revenue Sharing in Baseball Leagues