Class Projects on Business Models for Baseball

Major League Baseball is famous for excessively high salaries and huge profits. Use this to your advantage when coming up with a class project on the business of baseball. Whether you are working alone or in groups, baseball offers a variety of interesting and compelling topics that will allow you to learn about business models and teach your classmates something useful. Baseball may be about the game at the end of the day, but it is the business side that keeps it going.

  1. Team Profile

    • Profile one Major League Baseball team and its business model. Because markets for baseball vary widely across the country, different teams have very different methods for generating profits. The New York Yankees, for instance, have a seemingly endless supply of revenue, with their own television station, sold-out games and worldwide brand recognition. A smaller market team, such as the Oakland Athletics, has a limited pool of revenue to work with. As a result, these teams must spend their money more carefully while trying to build a winner through draft picks and trades.

    Salary Cap and Revenue Sharing

    • Equalizing the wealth between rich and poor teams has been an impossible goal of Major League Baseball for years. How would you propose making the game competitive for all teams without removing the incentive for good business practices? As your project, try to figure out how a salary cap or a system of revenue-sharing could work to make the playing field more level. Think about the business model that would have to be implemented. In the long-term, would revenue-sharing increase profits for everyone by making the game more interesting?

    Baseball as a Business Model

    • Apply the business model of baseball to other domains in business. Two things are unique about professional sports in the business world. First of all, while teams are in competition with one another, they must all thrive for the system to work. While Starbucks benefits when all other coffee chains go out of business, you need many healthy teams for the league to exist. Secondly, Major League Baseball has a system of minor leagues under it, where smaller businesses can take chances where the stakes are low. Could either of these aspects be the basis for a business model in another industry? Why or why not?

    Correlation Between Profits and Winning

    • Examine how well profitable teams fare on the field. Research how much money each Major League team has made over each of the past 20 years. Compare that to their on-field records. Is there a consistent correlation? Why do some teams win when they profit, while others do not? See if you can apply your conclusions to other domains of industry.