Graduation Year

2026

Date of Submission

4-2026

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Professor Serkan Ozbeklik

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Abstract

The gap between small market teams and big market teams in the MLB

has done nothing but grow in this era, seeing vast differences in payroll and

performance. To try and counteract this, team revenue sharing was introduced in

1996 to try and level the playing field. Revenue sharing was designed to promote

a more competitive balance by redistributing resources from higher revenue

teams towards ones in smaller markets. This study aims to examine the impact

revenue sharing has on team payrolls, and particularly examining the difference

between both markets, by using panel data of teams revenue and the amount

they have to contribute to revenue sharing during the period from 2012-2025.

The findings indicate that revenue sharing is positively associated with an

increase in team payroll across both market types, but the key finding was that it

was more impactful on smaller market teams. These findings indicate the positive

benefit of revenue sharing, but the smaller than anticipated impact indicates

more needs to be done to close the gap between the two markets. If this study is

seen as relevant for the next bargaining agreement, small market teams can

advocate for an increase in revenue sharing, and players will find small market

teams more appealing if they are willing to invest more in their payroll.

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