For over a century, the sport of baseball has been one of America's greatest national pastimes. Every spring when the start of the baseball season comes around, thousands of fans get ready to fill the ballparks and watch their favorite players hit a homerun or strike someone out. However what many fans dont realize is that baseball is more than just a bat and a ball, it is a business. Economically, there is a major problem with Major League Baseball right now. Major League Baseball reported that it lost over five hundred million dollars in the 2001 season (Banks 1). Although some people may find this hard to believe, one should consider that every time Manny Ramirez, a member of the Boston Red Sox, steps up to the plate he earns an average of $30,000 (http://boston.redsox.com). With salaries like Manny Ramirez's, it shouldnt surprise people that major league franchises can lose money in a given season. .
After learning that were many major financial problems in baseball, Commissioner Alan Selig organized a committee which he called the Commissioner's Blue Ribbon Panel on Baseball Economics. The committee analyzed every aspect of baseball economics tallying revenues and costs for each franchise. Their 18-month study allowed the MLB to evaluate where each club stands with respect to the other teams in the league. For instance, the New York Yankees earned almost $160 million in local revenue while the Montreal Expos earned under $20 million (Selig). Senator George Mitchell, a spokesman for the committee, said "The study left absolutely no doubt that large and growing revenue and payroll disparities exist in Major League Baseball, causing chronic problems of competitive imbalance." Along with the committee's review of financial data, they also made some suggestions as to what could solve these problems, one of which was contraction. .
EARNING REVENUE IN BASEBALL.
To analyze how much revenue a team earns in a given year, one must first take a look at a franchise's operating expenses, or what it takes to run a team.
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