how does baseball economics work? Do all teams give their profits to MLB?

Answer 1

Simple answer, no. Baseball teams each have their own local deals and receive all income from tickets, concessions, merchandise, tv, radio, etc. However, league-wide deals such as with ESPN, FOX and a portion of post-season ticket sales are collected by MLB and then equally distributed amongst the league.
For more detailed information, check out one the books mentioned above.

Answer 2

There are books on the subject, which is obviously very complicated. A few short points:

* Each team is individually owned. If the Yankees make money, and they do, they keep it.

* There is no salary cap, but there is a luxury tax. So, once teams go past a certain threshhold, they have to pay the league's revenue-sharing system. Teams like Tampa Bay and Pittsburgh get money, while the Yankees and Red Sox kick in money.

* Remember, it's accounting. There are all sorts of tricks and stunts involved, especially when a company owns both a major league team and other businesses. If a television network has a bad year and a team has a good year, the cost of rights fees can be juggled accordingly. Contracts can be depreciated, etc.

Answer 3

No. The reason that people complain about the Yankees is that they have more money than other teams, and can spend that money. There is a luxury tax that teams pay to the league when their payroll is over a certain amount of money. This money is shared with other teams so that they can pay more money to free agents and remain competitive.

The teams are each their own entity, and they are entitled to their own profits. While the luxury tax is intended to improve competitive balance, very few teams actually spend enough money to have to pay the tax. Traditional revenue sharing like the NFL uses would be a better solution than the luxury tax. You can see that the Yankees are not discouraged from spending by the luxury tax by the signing of Roger Clemens. They were already above the taxable payroll, and paid Clemens a lot of money anyway, increasing the amount due.

Answer 4

That's really an essay question, not a short answer. In summary, though:

- Each team is individually owned, and keeps their own profits.
- A certain portion of ticket and local broadcast revenue is shared between teams. National broadcast revenue is shared among all teams.
- There are certain other fees that go to MLB from the teams, such as fines and luxury taxes.

Answer 5

Far too vast a question to answer in this forum.

But to hear some (all, really) tell it, throughout history, no one ever made any money at this game.