There's nothing wrong with a baseball team turning a profit. What is wrong is a baseball team that cries poor while posting 18 consecutive losing seasons turning a profit. This difference is why the Pittsburgh Pirates, whose
The Pirates are the extreme, if inevitable, product of a system that has been put in place over the past 20 years, step by arduous step. The core problem is a revenue-sharing system that is designed not to level the playing field between teams in large and small markets, but to lower the returns on paying for players, and therefore the industry's labor costs as a whole. MLB has never once entered a negotiation with the union with any goal other than lowering labor costs, and all proposals, from a payroll cap to a luxury tax to revenue sharing, have been proffered with that objective foremost in mind.
The flaw in the current system is the use of actual revenues, rather than potential ones, in determining who pays in or out and how much. So a successful team in a legitimately small market will pay into the system while a poorly-run team in a larger market doesn't feel the pain of its inefficiency. There was a time, early in this construct, when the Philadelphia Phillies, with the game's largest one-team market to themselves, were recipients of revenue-sharing funds. At the same time the Indians, from tiny Cleveland, paid into the pool. When you base revenue sharing on actual revenues, you incentivize sloth and aggressively diminish a franchise's motivation to move upward, as gains in revenue will be offset initially by lost welfare payments. It's a zero-sum game -- one the Pirates elected not to play.
What this system does is lower the marginal revenue product of players. For instance, if signing
It has been wildly successful. MLB pays less to its players as a percentage of revenues than does any major sports league. Overall spending on players, as a percentage of revenues, has fallen. The top end of player salaries has barely moved in a decade;
What the system
You can fix this system, but to do so, you'd have to give up the salary-dampening features of it. MLB's problem isn't gaps in actual revenue, but in potential revenue, and a well-designed system would address those gaps. Gather smart people and have them quantify what it means to play in the Bronx versus Baltimore, or in Queens versus the Queen City. Establish the baseline differences in market sizes using everything
In a well-designed system, the Pirates would have the same incentive to improve, to compete, to win as every other team, because the money they would make by doing so would belong to them. There would be no diminishing returns. The revenue-sharing mechanism would properly adjust for their small market separate from their revenues, leaving them free to invest in their product with the same potential for return as the Yankees do. That is not the case today, and while the Pirates are the easy and obvious target, be sure to save some opprobrium for the owners, led by commissioner