Revenue Sharing and Its Impact on Competitive Balance in the MLB
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This paper examines the effects of revenue sharing on competitive balance in Major League Baseball (MLB). More specifically, this paper is looking into whether competitive balance has increased since 2002, when the first new Collective Bargaining Agreement (CBA) was implemented after the Blue Ribbon Report, which stated that payroll disparity and competitive imbalance had been increasing since 1994. To determine whether the MLB had increased competitive balance, linear regression models were used to determine whether selected variables had any correlation to competitive balance. This study used information across 17MLB seasons, starting in 1997 and finishing in 2013. The results of the study illustrated that competitive balance had actually become slightly worse since 2002 despite the revenue sharing system.