Revenue sharing is one of the hallmarks of baseball. Small market teams get to reap the financial benefits from larger market teams. They get a guaranteed payout every year regardless of team performance. Given that, I can’t imagine why the Pittsburgh Pirate owners wouldn’t want to increase payroll to win. From The Sports Economist:
If they won and were forced to increase their payroll from $34 million to $75 million or $80 million … how profitable would they be? There’s a ceiling in terms of gate revenues, ” said Dave Berri and Roger Noll, a Stanford University economist, follows with, “Probably the Pirates would be less profitable if they tried to improve the team substantially.”
Ah.
