Professional soccer leagues tend to be dominated year after year by a small number of top teams.  Major League Baseball on the other hand, has seen World Series appearances by the Detroit Tigers, the Texas Rangers, the Philadelphia Phillies, the Tampa Bay Rays, etc.  It seems like any team can assemble a champion.

These two sports have very different production functions.  A baseball team is basically a collection of individuals.  Among team sports its the closest thing to an individual sport. A team’s output is basically the sum of individual outputs with very little complementarity.  In baseball there is very little talk of one player making his teammates better.  The production function is additive and, offensively, players are perfectly substitutable.

Soccer is at the other extreme where players are highly complementary.  Scoring a goal is a total team effort.  Even the best striker needs good chances.  In soccer, the best players are more productive when there are other good players on the team.  The production function is closer to Leontif.

These differences in production explain the differences in market structure.  Consider competitive bidding for a top player in the two sports.  In baseball that player’s marginal product is the same on any team he would play for so many teams will compete and any team could land him.  In soccer that player’s marginal value is highest for the team that is already the best.  The competition is going to be very weak and he is likely to sign with the best team.

In baseball competition levels the playing field.  In soccer it tilts it even further.

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