Ownership Structures of Professional Sports Teams

Baseball sport provides an important example of a sporting activity in the US that has experienced revolutionary changes on its own since the 1800s. Initially, clubs were simple teams of young people within their neighborhoods or schools. They were poorly organized and lacked material and financial support. Nevertheless, they attracted a substantial audience from the public, especially in towns.

The second method of ownership was through the franchise. For example, when the National Association was founded in the early 1870s, it became the first professional league in the US. It started charging around $10 as a franchise fee. In the early 1900s, wealthy sportsmen owned and operated baseball teams. For example, a person with financial interests in certain industries or textiles that provide related activities to sports would purchase or start a club. In addition, some owners operated clubs as sole proprietors or in partnership with others. There was no corporate ownership of clubs at the time.

Corporate ownership became the fourth model of club ownership, with conglomerates such as the Chicago Tribune and AOL Time Warner, mostly derived from the news and media industry, purchasing several clubs across the country.

Each of the four methods of ownership runs under strengths and weaknesses. The old method of ownership is currently seen in school sports across the country. It is a simple method because it derives resources from individual schools, colleges and universities. In addition, it has the potential to recruit the best players because most participants are young and potential students. On the other hand, most school athletic teams have low capital resources because they are not business-oriented. Ownership by individuals or partnerships also lacks the financial potential, ability to recruit good players and inability to access the best training facilities. However, they are able to make decisions quickly and efficiently compared to the franchise and corporate ownerships.