

How Losing Is A Profitable Game In Baseball - TenJack
http://www.npr.org/templates/story/story.php?storyId=129493504&ft=1&f=1055

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mattmaroon
Not surprising, the MLB has been in a death spiral for decades. Their problems
are entirely political. Two teams (and I don't know why this article mentions
the Dodgers, they're not even in the top 10 in terms of revenue) make the
majority of the sport's money, and even among them one is far larger than the
other. The entire sport revolves around the Yankees and, to a lesser extent,
the Red Sox.

Those teams' considerations are given undue weight when determining league
policy and have been for what in the sports world would be considered an
eternity. This has led to a league designed to keep the Yankees winning and
the Sox picking up their crumbs, which might seem great to the 25% of baseball
fans who love one of those teams but alienates the rest.

Pittsburgh may be gaining $39m a year from revenue sharing, but they're losing
a ton compared to what they'd make in a well-run league. If the MLB really
believed that a rising tide lifts all boats they'd implement a salary cap and
be done with it. The cap (along with revenue sharing) is the biggest reason
for the NFL's parity, which in turn has driven the league's success. Whoever
your favorite NFL team is, there's a very good chance they've been Super Bowl
contenders in your lifetime. Most baseball fans cannot experience this.

For whatever reason, maybe because it was the scrappy upstart and it had to
outfox it's larger competitor, the NFL owners have come together in a way that
no other sport has to dethrone America's former pastime. If the MLB wishes to
compete going forward they're simply going to have to adapt their business
practices to align the incentives of the team owners (making money) with that
of the fans (winning) and there's no proven way to do this other than a salary
cap.

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JacobAldridge
The same is probably true of 'soccer', especiall the English Premier League
which is essentially a tower of debt at the upper end because only more
borrowing (or billionaires buying clubs) can support the titles and growth
that helps service the existing debt.

Of course, the EPL situation is made more complicated by the divisions and
relegation possibility. There are probably plenty of fans - especially outside
the big 4 - who would be happy to cycle through the top and bottom of the
Premier League, but a cycle of relegation is not attractive. In fact, I wonder
how a salary cap could be managed across different divisions, although it
would probably still be better than the same clubs bouncing up and down most
years.

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notahacker
Relegation makes a big difference because it means that aiming to minimise
spending is not a viable strategy; the potential to be profitably run in lower
divisions is much lower. Likewise, because the debts incurred by risky
spending to try and beat the top teams (all with huge global merchandising
incomes or a sugar daddy) also have resulted in financial crises, you have the
curious outcome of most of the division aiming to be somewhere in mid-table.

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dstorrs
Only tangentially related, but should be of interest to most HNers:

If you haven't read _Money Ball_ (<http://tinyurl.com/28ryy4b>) you really
should. It's the story of how a coach and a stats guy hacked major league
baseball; they took one of the poorest, losing-est teams in the league
(Oakland A's) and turned them into serious winners. I found it well written,
informative, and quite a pageturner...and I don't even /like/ baseball.

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mattmaroon
Not serious winners, marginal winners. IE they made the playoffs every year
and got promptly defeated. There's a big difference.

While every hacker loves to believe that scrappy upstarts with data will
conquer the good old boys every time, the reality of baseball seems to be the
opposite. Sabermetrics just hasn't delivered. (It was a great book though).

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Empedocles99
Taxpayer bought stadiums probably don't hurt profitability either.

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jpdbaugh
The only way to fix this is for Pirates fans to stop going to the game. As a
Pittsburgh fan and living there for a summer I am pretty confident in saying
Pittsburgher's will never quit going.

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WillyF
Here's a great J.C. Bradbury piece on why revenue sharing really does nothing
for competitive balance.

[http://www.sabernomics.com/sabernomics/index.php/2010/08/rev...](http://www.sabernomics.com/sabernomics/index.php/2010/08/revenue-
sharing-incentives-and-competitive-balance/)

