Competitive Balance and Market Size in Major League Baseball: A Response to Baseball's Blue Ribbon Panel

Major League Baseball's recently convened Blue Ribbon Panel concluded that competitive balance had been reduced in the latter half of the 1990s. Specifically, the Blue Ribbon Panel argues that smaller-marketteams now know before theseason begins that there is little chance for post-season success. Such a finding is contrary to the findings of numerous economists who contend that Major League Baseball at the close of the twentieth century has never been more competitively balanced. The purpose of this work is to reconcile these disparate viewpoints via an analysis of the link between various definitions of market size and competitive balance. In general, our analysis of the 1990s reveals that market size, however it is defined, is not consistently related to the level of competitive balance in Major League Baseball.