In truth, the major pro sports (at least in the US and Canada)have very
different buisness models that to different degrees skew the system to
big and small market teams.
First and formost, every league has different revenue sharing agreements
between its membership. To my recollection, the NFL teams put a
relatively large amount of revenue into a common pot and then divide it
equally. This, of course, gives a boost to smaller market teams. The
last six Super Bowl winners have been Tampa, New England, Baltimore, St.
Louis, Denver (twice) and Green Bay. All relatively large markets.
Couple this with rigid standards on player salaries (in the form of a
collective bargaining agreement with the players union that defines a
maximum amount each team can spend on players), and small market and big
market teams are on a relatively even playing field.
At the other end of the spectrum, Major League Baseball teams share
relatively little revenue and have (until last year... And the rules are
still pretty loose) no real curbs on how much a team can spend on
players). Teams from Southern California or New York have appeared in
and won 5 of the last six World Series.
Why do relatively similar endeavors have such different business models?
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf
Of fabio guillermo rojas
Sent: Thursday, July 10, 2003 2:32 PM
To: [EMAIL PROTECTED]
Subject: Competition vs. Profits in the NBA
Playoffs between small market teams get low ratings, like the New Jersey
Nets/San Antonio Spurs championship game. But a lot people inside sports
seem to resent big market teams (Yankees, LA Lakers) consistently
dominating the play-offs, although audiences seem to want dynasties from
Is there an inherent problem here? Is it inevitable that there is a
conflict between people inside sports who want to see some diversity
among the winners? Is big league team sports inherently biased towards
the dynasty model? Are there viable business models for team sports that
could produce a wider range of winners?