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Should Mlb Teams Have Price Caps

1480 words - 6 pages

Business Problem
The goal for every firm is to increase earnings, and it is no different for Major League Baseball (MLB) teams. A Major League Baseball team can reasonably expect to make the most money when they win more games due to more advertising sales, merchandise sales, etc. as a team becomes more popular. However, the way in which to increase winning percentage of a team has always been highly debated. Some of the most popular opinions on how to do this have been to: 1) increase a team’s payroll, 2) decrease the age of the team by signing younger players, and 3) increase attendance at baseball games.
First, since MLB does not have a salary cap, some teams focus on the aspect of ...view middle of the document...

Motivation
The motivation for our study is that we are all baseball fans. One day we were all watching the movie “Moneyball” which is about how statistics can directly correlate with getting wins in Major League Baseball. We were very interested in the actual fact that in the movie, the Oakland Athletics were a team that did not have a high team payroll. One of the biggest reasons why the Oakland Athletics are faced with the problem of getting wins is because they cannot afford the higher valued athletes because there is no salary cap in baseball. This means teams with more money can afford these kinds of players. Throughout the movie, the motivation to build the team was through statistics that would prove to get a higher winning percentage. This concept caught our attention and that is how the idea was born for us to research and test if there was a correlation between certain statistics that affect the game of professional baseball. Another motivation is that we were are very curious how the other 4 major professional sports in the United States all have some sort of salary cap that was put into place so the amount of spending per team was on a even playing field. Usually the way people think of getting a higher winning percentage is by having the best players but we wanted to think there was another way. All over baseball websites and sporting news channels, baseball is always explained through statistics. Our group decided to research more into this and started to collect data to try and prove our motivations.
Data collection method
We calculated the winning percentage based on games won and games played taken from ESPN.go.com, for the Teams Payroll we used the sites Deadspin.com and Gammonsdaily.com, we used Baseball-reference.com for the Average age of players, we calculated the Percentage Attendance by gathering Average people attended per game from ESPN.com and the Total stadium capacity was taken from MLB.com
Team Payroll -- http://deadspin.com/2013-payrolls-and-salaries-for-every-mlb-team-462765594
-- http://www.gammonsdaily.com/2014-mlb-opening-day-payrolls/
Winning Percentage -- http://espn.go.com/mlb/standings/_/year/2013
Percentage Attendance -- http://www.baseball-reference.com/leagues/MLB/2014-misc.shtml
Average Age -- http://www.baseball-reference.com/leagues/MLB/2013.shtml

Numerical Highlights
There was a lot of data collected during this group project. While collecting all the data, we noticed some data that stood out for us. The wide range of the team payroll was a huge standout because LA Dodgers had over a 200 million dollar payroll compared to the Houston Astros who had a between 24 and 44 million in payroll for the past 2 years. Another number that stuck out to us was the increase of payroll from 2013 to 2014 for a majority of teams. The LA Dodgers went from 216 million to 235 million dollars. The Houston Astros jumped from 24 million dollars in 2013 to 44 million dollars in...

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