Sport Management



Accordingto Lewis (2008), there exists imbalance in revenue generation withinthe small and large markets for team playing in the MajorLeague Baseball(MLB). For about a decade, the teams have sought to introduce arevenue-sharing model to reduce the imbalance. The intention was toenhance the competitive balance in the MLB. Nonetheless, Lewis(2008), observes that the teams are yet to realise the benefits ofthis model. In fact, the clubs have fully managed to build theirteams or grow their fan base. He observes that teams in the smallmarkets collects more revenue if when they do not win or have fullstadiums. With this in mind, he argues that the league lacks themotivation to grow and build teams. Ideally, the size of the markethas great influence on the revenue generated by the clubs. The smallmarkets cannot easily develp talent or attract invetments.

Lewis(2008) recommends an alternative model that would reduce theinequalities experienced within the small and large markets. Heargues that the small markets should nopt be defined on the revenuegeneration by the teams. His model seeks to achieve three objectivesnamely generate revenue from stadiums and reward the winners. Hismodel seeks to use the revenue-sharing model using the localpopulation size and the team’s accomplishment in attracting fans.The higher the attendance the higher the payment a team receives.Further, the clubs have the responsibility to generate better andinnovative products that will attract fans to the stadiums.Increasing the fans is beefitial to both the clubs and the league.With improved pay, the teams will get an incentive to increase theirfan base. The approach will lead to greater investments in both thesmall and big markets hence reduce the imbalances (Lewis, 2008).


Lewis,M. (2008). Individual Team Incentives and Managing CompetitiveBalance in Sports Leagues: An Empirical Analysis of Major LeagueBaseball. Journalof Marketing Research, 535–549.