Abstract

This thesis aims to address the following two issues as they pertain to the professional baseball industry: financial stability and pay equity.  The continuously increasing salaries present in Major League Baseball (MLB) accompanied with the recent decline in ticket prices and attendance levels suggest that the business of baseball could be threatened, which recent literature has yet to address.  At the same time, since the Reserve Clause was struck down in 1975, empirical work has yet to be done to test its effectiveness at removing player exploitation.  Using performance statistics and salary data from the St. Louis Cardinals’ 2017 season, this thesis attempts to target these shortcomings.  While this study confirms baseball’s ability to financially stay afloat, it shows the increased level of pay discrimination and exploitation that still exists in the MLB today.  If baseball is to remove this inefficiency, the current arbitration system needs immediate reconstruction.