Tipping Pitches: Sports: MLB Economics and Competitive Balance (Pt. 2)


Tuesday, November 3, 2009

Sports: MLB Economics and Competitive Balance (Pt. 2)

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[This is Part 2 of a four part series.  You can read Part 1 about Accessibility of Success here.] 

In Part 1, we defined "competitive imbalance" and compared data between the NBA, NFL and MLB during the past 10 years to determine, at least on the surface, whether competitive balance exists in those leagues. 

In that entry we focused on the Accessibility of Success.  In other words, competitive balance would exist if a large percentage of teams would have experienced some level of success during the past 10 years.

Of course, it is also important to remember that while the rules may be in place to foster competitive balance, but it is ultimately up to team ownership and management to succeed.

Lifting the Dead Weight
Another sign of parity is a variety of teams in the bottom of the standings.  As a fan, you want there to be hope when your team finishes at the bottom.  We want to see that there is some variation and that the same teams aren't found at the bottom year after year.

You can view the data here.

What it Means:  In my opinion, this is the report that provides the most value.  In baseball, any team can experience temporary success, with or without money.  Sustaining that success is the privilege that money affords. 

So this report charts how much dead weight there is in a league.  Once again, the NFL is an equal opportunity league.  It qualifies as having the most parity in five of the eight comparisons.  I think it's amazing that all 32 NFL teams have been in the bottom 10 of the league at some point during the past 10 years (compared to 83.3% in baseball).

Maybe even more telling is the fact that only half of all baseball teams have finished in the bottom five during the past 10 years while 81.3% in the NFL and 70% in the NBA have suffered that fate.

While the NFL was most often at the top, MLB was last in these comparisons in all but one instance.  Though achieving success seems to be easier in baseball during the past five years, it doesn't seem to look much better for the bottom feeders.

Only 33.3% of all Major League Baseball teams have finished in the bottom five during the past five years, compared to 59.4% in the NFL and 53.3% in the NBA.  In other words, the same baseball teams seem to stink every year. 

Why You Should Care
While I'm slow to point to the first report as being evidence of competitive imbalance brought on by an unfair economic system, this report is different.  As discussed before, any team can buy temporary success.  But MLB does not provide the environment for small market teams to sustain that success.

I'm actually more concerned that 33% of all Major League baseball teams finished in the bottom five during the past five years than if that number was significantly lower.  If it's lower, you start to wonder if it's simply because of mismanagement.  But one-third of all teams is high enough that affects a large minority without being able to make the claim that baseball is an equal opportunity league.

The beauty of the NFL and even NBA is that fans enter each season with hope.  And if they don't have hope, it's entirely because of a lack of confidence in ownership and the roster they assembled.

Fans of one third of baseball teams have a long term negative perception of their team.  They see the Yankees spending $200 Million.  They see their own team spending $50 Million.  They lose their best players to the big market teams via free agency.  Or they regularly trade those players for prospects, fearing they'll never be able to sign them.

It's bad business.  It's bad business perpetuated by the league.


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