http://seattlepi.nwsource.com/baseball/359350_values17.html

Those who know anything about Major League Baseball can see by looking at the current league franchise values, the rich teams indeed get richer. According to an Associated Press article, the values of MLB teams positively correspond to the revenue collected by them. As evident in the 30-team value rankings, as the value of a franchise decreases, so does its revenue. The New York Yankees, ranked number one, have a value of $1.3 billion with a $327 million revenue. The last team on this list, the Florida Marlins, have a value of $256 million and a revenue of $128 million. Most teams in between these two generally follow this rich-get-richer correlation.

But how does this social and economical phenomenon come about in the MLB? One plausible reason is that in general, teams with larger payrolls have higher valuations than those with lower payrolls. The higher payrolls are produced by signing high-quality players to long-term and financially-heavy contracts in hopes that these players will produce and lead the way to the postseason. These same teams take in more revenue because their all-star lineups attract crowds of people who are also willing to pay a hefty price for their seats and fun-filled day at the ballpark.

Another possible reason for this phenomenon is the fact that star-studded teams with larger-than-life payrolls are typically more successful than those with miniscule payrolls (with the exception of the 2003 World Series, where the New York Yankees were defeated by the Florida Marlins, a team with a payroll 1/3 of the size of the Yankees). Although critics may believe many of the high paid players are overrated, they generally are very successful players who help to lead their teams to the postseason. The postseason helps bring in more revenue because there are more games to sell tickets for and companies’ endorsements become more exclusive as there are less teams playing at a single time. Moreover, World Series Champions receive paychecks and other earnings from endorsements. This money, in addition to the other revenue, can then be used to sign potential prospects and top-notch players away from teams that don’t have the same money to offer.

As this cycle continues, teams with more money sign players with the best stats, bats, and gloves. These teams, with such potent lineups, have the ability to go deep into the postseason, and with that comes more and more money for teams that are already rich.