Why Certain MLB Teams Can Afford Star Players

http://m.mlb.com/

Have you ever wondered why some sports teams are always continually good year after year even though they keep losing their best players? Well, it’s most likely because their team has a high enough revenue where they can just go out and buy players when they need them. I read an article Why Certain MLB Teams Can Afford Star Players and Others Cannot, by Dylan Kraslow, and he goes on to explain why some teams are able to purchase better players and tend to be more successful. I believe that big-market teams are going to be more successful that smaller market teams because they bring in more revenue, which equates to more money to spend on better players. This is a reliable source because Dylan is writing on Northwestern business review website and Northwestern is a very prestigious school with a lot of good history.

In the article, it discusses how there are mainly two different types of markets when you are talking about MLB

teams and their revenue. You have a “big-market” team and a “small-market” team. The article says “Specifically, the “big-market” designation refers to those teams that play in the nation’s consolidated statistical metropolitan area”. This is meaning that teams such as “the New York Yankees, New York Mets, Chicago White Sox, Chicago Cubs, and the Boston Red Sox are big market teams” and “The Cincinnati Red, Kansas City Royals, and Milwaukee Brewers are“small-market,” teams. If you are someone who is not totally familiar with the MLB and the teams that are in it, I could almost guarantee that you have heard of the New York Yankees or the Boston Red Sox. This is because they are always in the race for the World Series and they are located in a big city where there are a lot of people who 

attend their games.

The article goes on to state that  “While the size of the market refers only to the population of the respective city, it is also closely correlated, in most cases, to the amount of money that a team will spend on players.” When teams have the freedom to not worry about the money they can spend, they are more likely to bring in better players and be more successful. In general, teams in “big markets” attract more fans, allowing them to raise ticket prices. “This is a simple principle of economics.  The larger the fan base, the greater the demand for tickets.  Ticket supply is relatively constant; a stadium can only hold so many people.  As a result, prices rise.” In my next blog post, I will go on to research why players choose to go to certain teams.