Revenue sharing is actually a disincentive for increasing local revenue through winning. For every dollar that comes in you send 50% of it to the league. You get your share of 50% of the revenue of other teams whether or not you win a game.
Oakland has revenue around $210M. $60M of that comes from the national TV deal and $110M through revenue sharing for just $40M in local revenue. They send $20M to the league pool and receive $110M in return for a net +$90M. The Dodgers have revenue of $560M. They send $200M to the league and get back $110M.
Oakland probably can't generate more than $150M in local stadium and concessions revenue from that market no matter what they do so it is in the league's interest to maximize the revenue from large market teams. It would cost Oakland an additional $100M in payroll to maximize their revenue by winning but it would also increase their revenue sharing bill from $20M to $75M. They effectively spend $155M and increase local revenues by $150M for a net loss of $5M on the bottom line.
Imagine instead that all the TV contract money was shared (like the NFL). Frankly, I don't understand what a "local" cable TV station or streaming video partner is anyway. Teams would each get roughly $120M by sharing all the TV money equally no matter which market it comes from. My idea is they get to keep all of the locally generated revenue they create from ticket sales and concessions. Then the A's can increase payroll by $100M, increase local revenue by $150M and get a net ROI of 50%.
The Dodgers would see their $240M yearly TV deal come off that $560M number but they also wouldn't have a revenue sharing bill of $200M and still max out their potential local revenue at $250M instead of the A's $150M due to their market size.
The league as a whole would be incentivized to negotiate the best overall TV deal for the 2430 baseball games they have to sell every season. Teams would be incentivized to increase local attendance and concession sales. Expansion of 2 teams means 162 more games (3 hour TV programs) to sell to television and more local revenue.
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Now, would it be good instead for the A's fans to see even more revenue sharing? Suppose teams shared 75% of revenue. The A's bill increases from $20M to $30M but they get back $165M from the league instead. That's a $135M disincentive to ever try to put a winning team on the field. We've already determined that their max local revenue stream is $150M. They wouldn't spend more than $10M in additional payroll to maximize their overall revenue. I don't think they would even keep players through arbitration. More revenue sharing makes it even more important for the league to have the Dodgers and Yankees win all the time and have the A's and Pirates lose. It doesn't improve parity, it makes it much worse. It actually incentivizes contraction to a 16 team league where all the major media markets are covered (NYY, NYM, LAD, LAA, CHC, CHW, PHI, BOS, WAS, HOU, TEX, SFG, TOR, SEA, ATL, ???). I don't think the Twins even exist in that scenario. We're all stuck watching Cubs and White Sox games every evening or going to Saints games.