Major League Baseball generated an estimated $12.1 billion in total revenue in 2024. But that money is not distributed evenly. The Dodgers’ local television deal alone reportedly pays them close to $200 million per year. A team like the Marlins or Guardians might generate a fraction of that from local media. Revenue sharing is baseball’s attempt to close that gap — but whether it works is another question entirely.
MLB’s revenue sharing system requires all 30 teams to contribute a percentage of their local revenue into a central fund. This includes approximately 48% of local broadcast revenue, along with portions of ticket sales and other locally generated income. National revenue sources — national television deals, MLB.TV, merchandise licensing, and league-wide sponsorships — are generally split equally among all teams regardless of market size.
The central fund is then redistributed equally among all 30 teams. The effect is a transfer of money from high-revenue teams (Dodgers, Yankees, Mets) to lower-revenue teams (Marlins, Guardians, Royals). The system is designed to give smaller-market teams enough resources to build competitive rosters, even if they can’t match the local revenue of teams in New York or Los Angeles.
Revenue sharing sends money to smaller-market teams. But there is no strict requirement that those teams spend the money on player payroll. The CBA includes language stating that revenue sharing funds should be used to improve on-field performance, but enforcement is limited and the bar is vague.
This creates a perverse incentive. A team can slash payroll, collect revenue sharing checks, and still turn a healthy profit — without fielding a competitive team. Critics point to teams that have maintained payrolls well below $100 million while receiving tens of millions in revenue sharing as evidence that the system subsidizes losing rather than promoting competition.
This is one reason the MLBPA has pushed for a salary floor: a minimum payroll requirement would ensure that revenue sharing money actually reaches players rather than becoming owner profit.
The phrase “small market” gets thrown around a lot in baseball, but market size is only part of the story. Revenue disparity comes from three main sources: local broadcast deals (which can vary by hundreds of millions of dollars between the biggest and smallest markets), gate receipts and in-stadium revenue (driven by attendance, ticket prices, and stadium capacity), and regional sponsorships.
Some teams in mid-size markets have found ways to compete consistently despite lower revenue — the Rays, Brewers, and Guardians have each made postseason runs in recent years with modest payrolls. But competing consistently over many years is much harder without the spending power that comes with a large market and lucrative local media deal.
The NFL shares national broadcast revenue equally and uses a salary cap tied to a percentage of total league revenue. The NBA has a revenue-sharing system that transfers money from higher-revenue teams to lower-revenue teams, alongside a salary cap. The NHL also uses a cap-and-floor system tied to league revenue. In each case, the revenue split between players and owners is explicitly negotiated — typically around 50%.
MLB players received an estimated 47% of total league revenue in 2024, compared to roughly 50% in the NFL, NBA, and NHL. Some analysts argue that tying player compensation directly to a percentage of revenue — as the other leagues do — could actually increase total player pay, even with a salary cap.
In MLB Strike 2027, revenue sharing is one of the key CBA issues you negotiate. How you structure it affects whether small-market owners feel supported and whether players believe the money will actually reach their paychecks. Getting it wrong can cost you approval on all three meters.