Of the three major American professional sports leagues, the one that comes the closest to pure corporate socialism is the NFL, primarily due to the fact that the teams only play once a week. The largest source of revenue is the league’s TV contracts, the proceeds of which are shared equally. There is a fairly hard salary cap. The worst teams are treated preferentially in the draft, with no lottery. As a result, there are incentives to tank, but they are based more on the desire to win big later than on financial concerns.
The NBA is in the middle. There are more games, so local TV contracts are an important source of revenue. There is a salary cap, and a draft, but the draft is subject to a lottery to create disincentives for tanking.
MLB comes closest to the capitalist model. Local TV contracts and gate receipts are much more important sources of revenue than the national TV contract. There is no salary cap–just a tax over a threshold that is set relatively high–and no floor. International signings historically have not been subject to a draft. It is a model that naturally favors large market teams (which inevitably have the highest revenues) and a handful of the best players, whose salaries have skyrocketed, over the middle class.
It is the players, not the owners, who insisted on the capitalist model for MLB. Viewed from a broad perspective, it looks a lot like the world economy after globalization–huge profits for the most talented and fortunate, but struggles for average workers. How is it working out in practice, and are the players satisfied? I will answer those questions in the last two posts of this series.