EBK THE ECONOMICS OF SPORTS
EBK THE ECONOMICS OF SPORTS
6th Edition
ISBN: 9781351684491
Author: LEEDS
Publisher: YUZU
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Chapter 3, Problem 1DQ
To determine

The validity of the argument raised by the New York Yankees.

Expert Solution & Answer
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Explanation of Solution

The revenue-sharing model for Major League Baseball (MLB) teams was given by the blue-ribbon panel, which was an autonomous board selected by the MLB commissioner to look into the matter of increasing inequality between the local returns. The mechanism tends to favor the local revenues. The mechanism that tends to favor the revenue sharing redistributes the income between rich and poor teams. The balance is preserved for the future. Thus, it is assumed that the coming demand for sports will upsurge, leading to an increase in revenue of the game. Some big clubs claimed that some teams should not get the money. They said that certain teams have not shown any upgrading after the revenue-sharing model and in its place some team owners hoarded the profit. Therefore, it can be said that the revenue allocation does not increase the balance in the competition but it reduces the incentives for teams to win.

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