An historical analysis of divisions and post season in baseball.
Parity in sports is the idea that most teams in a given league are at a similar level of talent and play, and that there’s a competition for the top spots any given year. There’s an impression that Major League Baseball has substantially less parity compared to other sports leagues, partly because of the huge discrepancy between the top spenders’ payrolls and the bottom spenders’, and partly because of the past history of the sport with very few playoff berths. But neither of those opinions is really true any more. Let’s take a look at the history of the MLB with regards to playoff spots, pay rolls and parity.
The first World Series was held in 1903, it was skipped in 1904, but as been held every year since. Until 1969, the AL teams played only each other, the NL teams only played themselves and the teams with the best record in each league played in the World Series. Because even the very baseball teams rarely win more than 70% of their games, a team that failed to win even half their games would be completely out of contention by mid-season, all but mathematically eliminated. When each league expanded from 8 to 10 teams in the early 1960s, the leagues both decided to split each league into two division and have winner of those play in the “divisional” round before reaching the world series.
A lot happened over the next ten years in baseball. Four more teams were added in 1969, and two more added in 1977, bringing the total number to 26, up from 16 just 16 years prior. Then in 1975, free agency was introduced. The rapid dilution of talent and ability of richer teams to pay big contracts to players on the free agent market made a notable increase in the number of wins of the top play off teams, even when the number of spots in each league had doubled. The period between 1977 and 1993 was the nadir of parity in Major League baseball in modern baseball, with many teams reaching the playoffs in back-to-back years, and the average top team winning nearly 100 games.
A few major changes took place in 1990s to increase parity. First, four more teams were added two in 1993, and two in 1997. Coinciding with the 1993 expansion, was an extension of the playoffs from two to three rounds, and from two teams per league to four teams, and eight over all. Crucially, in 1996, revenue sharing began, specifically around large television and merchandising contracts. Revenue sharing has allowed small market teams to make an increasingly large percentage of their funds off of the revenues of larger market teams.
The revenue sharing program has evolved over the years, and now includes most merchandising and all national and local TV deals, including the deals the MLB has made directly with Television networks. Not just that, in 2003, the league added a “Competitive Balance Tax”, usually called a luxury tax, which punishes teams from spending too much money by taxing them and giving those funds to teams with less payroll. It’s not a surprise that since the luxury tax has been put in place, 28 of the 30 teams in the MLB have been to the playoffs at least once, and
Most MLB teams these days have huge cable tv contracts with local providers. The LA Dodgers, for example, have a deal with Time Warner to broadcast their games that’s worth a minimum of $8.35 billion dollars over 25 years. One of the strange consequences of these regional deals with TV networks is that they bring money regardless of whether the team is good, and that may spur parity even further.
Fresh on the heels of these regional sports television contracts, the MLB has added two more teams into the playoff chase each September by adding an additional wild card game. Now 10 total teams, a third of the teams overall, get a spot in the post season, even if two of the teams just get a single game. Never before have their been so many post season positions available and never before have so many teams been in the hunt in September.