# Local Revenue Sharing and Competitive Balance

Topics: Standard deviation, Percentage point, Arithmetic mean Pages: 3 (1049 words) Published: May 7, 2013
Local Revenue Sharing and Competitive Balance
Problem Statement
Your textbook shows the conditions that lead to increased competitive balance with an increase in local revenue sharing.  Data exist on competitive balance and local revenue sharing so you can examine this for yourself.  New local revenue sharing plans were put in place in MLB for the 1995 season and another increase in revenue sharing was in place for the 2001 season.  These changes create a "natural experiment" for analyzing the impact of changes  in local revenue sharing on competitive balance.  Procedure (Data File: Blackboard, Local Revenue Sharing_Competitive Balance_Project3Data.xslx) A.  The prepared sheet shows winning percent data for MLB, from 1990 to date. 1. Calculate the standard deviation of winning percents for each year at the bottom of each column for the AL 2. Calculate the standard deviation of winning percents for each year at the bottom of each column for the NL. 3. A table of standard deviations is created from your calculations 4. A chart with year on the x-axis, in ascending order, and standard deviation of winning percents on the y-axis, also is produced for you. B.  Using the results of your calculations from Part A:

1. In the provided area at the bottom of the worksheet, calculate the average of these standard deviations for the three periods shown. 2. In the provided area at the bottom of the worksheet, calculate the percentage change in these averages for the three periods shown. Hand In

Hard copy of all MSExcel files, tables and charts created, plus a paragraph for each of the following questions: 1.  Explain how increased local revenue sharing will improve competitive balance.  What should happen to the standard deviation of wining percents over time if  increased revenue sharing improves competitive balance? 2. Why is it valid to use just the standard deviation of winning percent in this project, rather than the standard...