Noseeum, when you say that kind of thinking cannot be tolerated in a competitive environment, I think you're thinking again from the perspective of the individual franchises. And there, I agree with you: they have to want to win. But when you're structuring the environment and considering on how to arrange the environment in which they compete, it is fair to consider what sort of balance you're creating and what your ultimate good is. I'm not so sure that the Yankees have a Lee Iacocca relationship to the MLB: what is good for the Yankees is good for baseball and what is good for baseball is good for the Yankees.
I've heard kvetching before about how the NFL prohibits dynasties nowadays, but I'd stack up a couple of the New England squads from the past few years against the 49ers of the 80's or the Cowboys of the 90's. And fundamentally, football now is about management of franchises, not built-in competitive advantages. If you manage your franchise well (Patriots) you do well. If you manage your franchise poorly (Lions) you suck eggs. That's really all you can ask for out of a competitive system.
You have a fair point on career length and free agency. You're right: if there was no pre-arbitration period and no arbitration period and it was just an open market from the get-go, it would be worse than it is. These restrictions on player options do serve to level, somewhat, the competitive balance. However, if everyone had an equally good protected-talent pool and equally good player development, then the teams that can bolster their lineup with the proven stars should win a majority of the time. And even when a team like Tampa does win, the fan base is so apathetic that their stadium was only 53% full
for the season.
You're definitely helping me clarify, so keep it coming. For me, no matter what the rules are, every franchise must be only concerned with itself and must do everything it can to succeed. Yes, it is fair for the league to consider setting the structure differently to encourage competitive balance. My gripe is with owners who just wish the Yankees would back off under the current system. They should be applauded for what they're doing under the current system. They are trying to win, and that's all that can be asked of them. If the rules get changed, they'll still do their best to win.
I don't know about the Iacocca analogy, but when the Yankees provide about 25% or merchandise sales, Iacocca might not be doing them justice. MLB does about $3 billion in merchandise sales every year, so the Yankees are single-handedly providing $750 million in merchandise sales every year to be shared with the other teams. That's $25 million added to each team's top line.
In addition, they send a fairly hefty check of about $75 million for revenue sharing each year.
So the Yankees are single-handedly providing a pool of over $800 million a year to be divvied up amongst the other teams. I don't see how anyone could argue that that's bad for baseball.