MLB Owners\u27 Functional Background and their Franchise\u27s Performance

Major League Baseball owners possess different types of functional background experience. I examine the financial and on-field effects of the functional and geographic background of owners in the MLB from 2001-2014. A functional background in entrepreneurship appeared to have an insignificant effect on a team’s payroll expense and on-field performance. However, teams owned by corporations appeared to have significantly lower payrolls than all other teams, a relationship that supports the theory that corporations are not concerned with their team’s on-field performance. The operating income of teams, with owners, who inherited the franchise from a family member or purchased the team using an inherited trust, was significantly higher than other teams. However, the number of team wins was negatively affected by owners, who inherited ownership. A personal tie between the owner and the team’s location was insignificant as a determinant of team payroll expense and team wins