Author Date

2025-11-20

Degree Name

BS

Department

Management

College

Marriott School of Management

Defense Date

2025-11-19

Publication Date

2025-11-20

First Faculty Advisor

Kurt Sandholtz

First Faculty Reader

Jeff Dyer

Honors Coordinator

Mark Hansen

Keywords

1. Franchise Profitability 2. Revenue Optimization 3. Market Inequality 4. Cost Efficiency 5. Major League Baseball 6. Fan Engagement & Brand Equity

Abstract

This thesis examines the strategic, economic, and operational forces that drive profitability in Major League Baseball (MLB), positioning franchises not merely as sports teams but as complex, multi-revenue businesses. As the league evolves into a multi-billion-dollar industry shaped by expanding media rights, rising player salaries, and increasing market disparities, financial sustainability requires a blend of data-driven decision-making and modern business strategy. Through analysis of revenue streams, cost structures, market dynamics, and case studies, this work identifies the key levers that differentiate successful franchises from struggling ones.

The study outlines how media contracts—both national and local—serve as the backbone of MLB revenue, with market size and brand equity driving massive variation in financial outcomes. It highlights the growing importance of stadium monetization, including fan experience, premium seating, and year-round venue usage. Cost efficiency emerges as a critical determinant of profitability; teams like the Rays and Guardians demonstrate that smart player development, analytics, and optimized payroll strategies can outperform large-market spending.

Economic frameworks such as Porter’s Value Chain, the GE-McKinsey Matrix, and elasticity modeling provide structured approaches for identifying profitability drivers and areas for optimization. Case studies of the Dodgers, Athletics, and Red Sox further illustrate how media mastery, brand-building, and strategic reinvestment shape long-term outcomes.

Ultimately, the thesis argues that MLB franchises succeed when they operate as diversified entertainment enterprises—leveraging analytics, maximizing media value, cultivating fan loyalty, and optimizing operations. As the league eyes expansion into new markets such as Salt Lake City, future franchises must embrace innovation, financial discipline, and brand-centric strategy to achieve sustainable competitive advantage on and off the field.

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