As the 2008 baseball season approaches, fans in cities such as New York and Los Angeles are overcome with excitement and anticipation. Fans in cities such as Tampa and Kansas City are saying to themselves, "What's the point?"

Baseball fans in cities such as New York, looked on intently as their teams signed one all-star after another this off-season. Fans in cities such as Minneapolis watched as their team lost one all-star after another.

This is the business of modern day baseball. If you live in a large, wealthy city, your team will most likely be successful. If you live in a small city, your team will have a miniscule chance at being successful.

The economics of baseball can be somewhat complicated. But let me try to give you an overall, big picture view of it. 

The largest forms of revenue for a baseball team are sponsorships, television and radio contracts and the advertising that goes along with them, team licensed apparel and ticket sales. 

The NY Yankees will have much higher revenue stream than say the Tampa Bay Devil Rays.
Why?

Due to New York's population (almost eight times that of Tampa Bay's in Manhattan alone), far more people will watch Yankee games on television, attend Yankee games and purchase Yankees apparel. This offers advertisers and sponsors the ability to reach a much larger audience with the Yankees than with the Devil Rays. Hence the Yankees are able to charge a much higher rate for television rites, sponsorships and advertising as they are offering clients a more attractive opportunity than the Tampa Bay Devil Rays.

To state the obvious, because of the Yankees ability to charge far higher rates for television contracts, sponsorships and advertising, the Yankees have a much higher revenue stream than the Tampa Bay Devil Rays.

A large portion of that revenue goes into the Yankee's payroll, which in turn produces an extremely high quality baseball team. 

The correlation between team payroll and success is staggering. In the past two decades, small market teams with low payrolls have made up fewer than 10 percent of all teams that have made the playoffs.

Teams such as the Florida Marlins, Minnesota Twins and Colorado Rockies have made it into the World Series, and in the case of the Marlins, even won the Series. They have done so through the development of their young players. But, they are unable to build a consistently good ball club because when those talented young players reach free agency, they simply cannot afford to keep them. 

Many will say that the parity problem in baseball is not due to profound differences in revenue between large and small market teams, but is due to bad decision making by the front offices of many teams.

Let's look for a moment at the Minnesota Twins 2007-2008 off-season.

I will go out on a limb here and say that Mike Radcliff, the Twins GM, didn't wake up one morning this winter and say, "I think this off-season I will get rid of my two best players." Instead, Radcliff woke up one morning this off-season and said "Wow, this winter I will be forced to lose my two best players."

The New York Mets acquisition of Johan Santana was front page news in every sports section across the country. Santana swept into New York as the savior of the Mets' pitching staff and was greeted with nothing short of a hero's welcome. But, nobody has stepped back to look at the Santana deal in the context of the league as a whole and how tragic it was for Major League Baseball.

Santana and Torii Hunter are case and point as to why MLB still has a major parity problem.

The Twins had arguably the best pitcher in the league in Santana and one of the best centerfielders in the league in Hunter. So, why would the Twins give up Santana and Hunter this past winter?

They simply could not afford them anymore.

Hunter was a free agent this year and signed a five-year $90 million contract with the Los Angeles Angels of Anaheim. Santana was going to be a free agent next season and the Twins knew there was no way they could afford to sign him as a free agent. So, they were faced with a choice. They could keep Santana this season and let him walk away next year without getting anything in return, or they could trade him this year and at least get some good ballplayers in return.

After Hunter had already walked away from the Twins in free agency, it was a no-brainer to trade Santana and at least get something in return. Santana was traded to the Mets and within days signed a six-year $137 million contract with the Mets.

It is no coincidence that Hunter and Santana wound up in the two large markets of New York and Los Angles. These were two of only a handful of teams that could actually afford players such as Hunter and Santana.

Last year the Twins had a $71,439,500 payroll. If the Twins had signed Hunter and Santana for the same money they received in New York and Los Angles; those two players would make up somewhere between 55-60 percent of the Twins entire payroll. That would make it next to impossible to acquire enough other quality players to produce a good baseball team.

As long as there are teams in the league that are put in the same situation the Twins were put in this off-season, there will not be complete parity in MLB.

So what about the luxury tax/revenue sharing system that has been implemented in MLB?

Sure, the revenue sharing system is a major step forward, but it is no where near where it needs to be to actually make even a minor difference in league parity.

Last year, the Yankees had a final payroll of $218.3 million. The Devil Rays had a final payroll of $31.8 million.

Last year the Devil Rays received around $33 million from the revenue sharing system. It is very questionable as to what happened to that $33 million as most of it did not go to the Devil Rays payroll. But, if the Devil Rays had put that entire $33 million towards their payroll, they would still be competing against the Yankees in the AL East with a $64 million payroll versus the Yankees $218 million payroll. Is that parity?

Last year the Washington Nationals had a final payroll of $43.2 million. The Mets had a final payroll of $121 million. The Nationals received $3.9 million from MLB through revenue sharing. With their $47 million payroll (basing this on the Nationals adding all of their revenue sharing money to their payroll), are the Nationals supposed to compete with the Mets $121 million payroll?

Yes, MLB devising and implementing any kind of revenue sharing program at all was a step forward. But, the current system has little or no bearing on league parity.

To see, first hand, a revenue sharing system that works, one needs to look no further than the NFL.

The NFL has a strict salary cap and an extremely successful revenue sharing program. The NFL distributes profits from television contracts, league sponsorship and licensed NFL apparel equally with all its teams. This allows for complete parity in the league, which translates into the game becoming more popular throughout the country, which translates into more money for everyone.

The Carolina Panthers have the NFL's highest team payroll at $123 million. The Buffalo Bills have the leagues lowest payroll at $65.7 million. The Panther's payroll is 46 percent higher than the Bills.

The Yankees have baseball's highest team payroll at $218 million. This is a staggering 85 percent higher than that of the Devil Rays.

If you don't think that the NFL's system is financially beneficial to all teams, just look at the NFL team valuations.

The most valuable NFL franchise is the Dallas Cowboys, valued at $1.5 billion. The most valuable MLB franchise is, of course, the Yankees, valued at $1.2 billion, $300 million less than the Cowboys.

The least valuable NFL franchise is the Minnesota Vikings, valued at $782 million. The least valuable MLB franchise is the Florida Marlins, valued at $244 million, a staggering $538 million less than the Vikings.

Let's also remember that, for the most part, there are only 16 NFL games per year versus 162 MLB games per year.

Until MLB can start adding taboo words such as "salary cap" and "equal revenue sharing" to their vocabulary, MLB will continue to operate with complete disparity. 

It is time that Major League Baseball fixes our national pastime and produces a fair and level playing field in which a team's geographical location has no bearing on their probability of success.