The NFL is one of the most successful professional sports organizations in the world for two major and related reasons: television revenue and the equal sharing of that revenue among all franchises. It is that revenue sharing that allows the Green Bay Packers to continue to compete against the big market New England Patriots and allows the league to prosper without a team in the nation's second largest metropolitan area.
Baseball has never before embraced this concept, and as a result, the small market teams are consistently outbid by the Yankees, Mets, Red Sox and Angels for the players those large market franchises really want. The tide however may be slowly and subtly changing in the years ahead. Several years ago, at the urging of the Commissioner, the owners agreed that all revenue for new media sources (read Internet) would be shared equally. At the time, no one thought too much about it. After all, what revenue was there from Internet broadcasts?
Now, however, hints of what to come are beginning to emerge. Baseball has agreed to buy Tickets.com, the major competitor to Ticketmaster, in a deal that will strengthen the competition in the online ticket market, give teams a greater outlet for disposing of excess seats and produce online revenue. The league's online subsidiary operates each of the teams' websites and has begun producing the websites of the minor leagues. Last year, it introduced a subscription service for online broadcasts of games.
The radio broadcasting deal that Major League Baseball signed with XM Satellite Radio was signed with the online subsidiary, thus placing that revenue in the equally divided pot. A deal was recently made with the players union for licensing rights in an attempt to make MLB the force in fantasy baseball.
However, the major piece to this whole puzzle is probably still several years down the road. As broadband access becomes the norm, MLB is likely to introduce online webcast of local games and move local television revenue away from each team and into the pot to be shared equally. The impact of that move would be enormous. The Yankees took in over $50 million in local television revenue last year; the Royals took in $6 million. You can readily see the impact sharing the revenue will have on competition.
When the time for a decision about these revenues comes, it is likely that baseball will choose to share equally. It operates by majority rules and there are more clubs who stand to gain by that decision than lose. Besides, there is always football to look to for an example of how to be both a competitive and a financial success. See Tim Marchman's New Republic article
here for a more complete explanation of this theory.