Small market
Encyclopedia
In the terminology of professional sports in North America, teams are often said to be based not in a city but in a media market
. The size of the media market is usually a good indication of the potential viability of a major league
team. A small market team is likely to struggle to compete financially against teams from larger markets and may therefore also be outbid in the competition for top talent. This has led to calls for revenue sharing
, luxury tax
es, and / or salary cap
s is most North American sports leagues in order to ensure competitive balance or parity.
Media market
A media market, broadcast market, media region, designated market area , Television Market Area , or simply market is a region where the population can receive the same television and radio station offerings, and may also include other types of media including newspapers and Internet content...
. The size of the media market is usually a good indication of the potential viability of a major league
Major professional sports leagues of the United States and Canada
The major professional sports leagues, or simply major leagues, in the United States and Canada are the highest professional competitions in team sports...
team. A small market team is likely to struggle to compete financially against teams from larger markets and may therefore also be outbid in the competition for top talent. This has led to calls for revenue sharing
Revenue sharing
Revenue sharing has multiple, related meanings depending on context.In business, revenue sharing refers to the sharing of profits and losses among different groups. One form shares between the general partner and limited partners in a limited partnership...
, luxury tax
Luxury tax
A luxury tax is a tax on luxury goods: products not considered essential. A luxury tax may be modeled after a sales tax or VAT, charged as a percentage on all items of particular classes, except that it mainly affects the wealthy because the wealthy are the most likely to buy luxuries such as...
es, and / or salary cap
Salary cap
In professional sports, a salary cap is a cartel agreement between teams that places a limit on the amount of money that can be spent on player salaries. The limit exists as a per-player limit or a total limit for the team's roster, or both...
s is most North American sports leagues in order to ensure competitive balance or parity.
See also
External links
- Column: "Small Market Mania" by Jonathan Phillips, Sports Illustrated
- Handbook on the Economics of Sport by Wladimir Andreff and Stefan Szymanski