Why Markets Matter: How Money Talks Baseball

Published: Nov 21, 2022  |  

Sports fanatic, avid dancer, and classic literature junkie

When you think of the biggest players in baseball, your mind usually goes to teams like the Los Angeles Dodgers and the New York Yankees. These organizations boast the biggest cities, the biggest fanbases, and the biggest budgets to create the dynasties they’re known for. The big markets the Dodgers and the Yankees have cultivated have significantly elevated their brand, propelling their image into the stratosphere of world recognition. You’ll find their team merchandise being sported by the likenesses of world-renown artists, featured in movies and television shows as part of a character’s identity, and in the closets of fans thousands of miles away from the closest baseball field. Big market teams like those in Major League Baseball make hundreds of millions of dollars in revenue each year to put up massive valuation numbers, with the New York Yankees ranking #1 out of the 30 MLB organizations with a whopping $6 billion valuation as of March 2022. Top teams have ample wiggle room, giving these teams the ability to spend more to achieve more. Most of the time, it works. That said, what difference does it make if the money isn’t speaking a winning language?

The thing is, in baseball today, money is creating the winning scenarios. In the recent 2022 World Series, the Philadelphia Phillies and Houston Astros went head-to-head in competition to achieve the championship status every baseball club dreams of, with the Astros ultimately reasserting themselves as deserving and capable of achieving supreme success they’ve been chasing since their 2017 World Series championship. The Phillies and the Astros, while wildly talented, both fall within the top 10 payrolls of Major League Baseball organizations across the entire 30-team league. These deep wallets make for the designation of a big market team, beating out other teams like the Miami Marlins and the Oakland A’s for the top talent they’ve been able to retain. What makes a team a small market is their inability to compete with higher earning teams to attract the best players for their organizations. The Philadelphia Phillies have one of baseball’s most popular players in Bryce Harper, whose jersey sales ranked #1 all-time in the first 24 hours of its launch. Jose Altuve of the Houston Astros has the largest salary of his team, of which possesses winners of the Cy Young, MLB League MVP, Rookie of the Year, Silver Slugger, Gold Glove, and All-MLB awards. While stakes are always high in baseball, expectations are higher for these top-ranking teams.

For big market teams, the World Series means more than a championship—it’s an opportunity to take their status to new heights. After their 2008 World Series championship, the Phillies saw their attendance spike and their value soar. The Astros, although met with controversy after the 2017 World Series victory, also saw the largest spike in valuation coupled with increased attendance and fandom. Just after winning their 2022 Pennant, the Philadelphia Phillies broke a merchandise record in the 24 hours after a NLCS victory according to Fanatics, Major League Baseball’s official e-commerce partner. This record was last held by the 2016 Chicago Cubs, who went on to win the 2016 World Series. With the Phillies 2022 NLCS win and Astros 2022 ALCS win combined, they’ve set a new 24-hour merchandise post-win record since 2016.

It’s clear to me that money makes the wheels go ‘round within the powerhouse that is Major League Baseball. For small market teams to compete against these giants, they must pay the price. We see this often with blockbuster trades like Carlos Correa to the Minnesota Twins, years-long organizational rebuilding like that of the Detroit Tigers, and re-branding with the hope that fans old and new will subscribe to the efforts as the Cleveland Guardians have done. If these teams get lucky, they can grow their own talent, like Miami Marlins’ Sandy Alcantara, who was unanimously voted the National League Cy Young award winner. In today’s game, the love of the game may simply not be enough to make winning teams anymore. For example, it’s hard to imagine a team located in chilly Milwaukee can compete as easily to retain talent as one situated in sunny California. 

There’s additional earning potential that endures well past game day, too. Teams who have bigger followings are more likely to have fans contribute to the rise of sports betting, which is legal in 30 states across the U.S. and internationally within dozens of countries. The recent sports memorabilia boom offers a huge secondary revenue stream, too. Coming off a World Series, players on both the Philadelphia Phillies and Houston Astros have the potential to propel their autograph to new value while observing the skyrocketing value of their game-used equipment. Bryce Harper, Alec Bohm, Aaron Nola, J.T. Realmuto, and Noah Syndergaard are all Fanatics Exclusive Athletes per Fanatics Authentic, the Fanatics memorabilia division. With memorabilia being at an all-time high in popularity, a World Series championship completely catalyzes soaring value for collectibles from the winning organization, and also sets a new precedent for the conceding organization to come back stronger. Win or lose, teams want to stay ahead of the season to come, which may mean bringing out the checkbook.

One would like to believe that it is by pure merit and sheer will that teams achieve the highest level of their sport. This, however, is entirely unrealistic by today’s standards. On top of the onset of sports analytics to carefully tailor the lineups and pitches of each game to the degree, there must be dollar signs to match the talent. I find baseball to be one of the most unpredictable sports to succeed in—but one thing is certain: getting a team that reaches the highest stages of performance in the sport requires the power of the pen.

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