Competitive Balance in Sports

I am about to teach a class of undergrads all about competitive balance in sports. And to be honest, I have no idea what I am talking about. But that is okay, I’m not alone. A lot of people who talk about competitive balance and the major problem that it is have no idea what it is. In an ESPN.com poll in 2006, when asked “Which is a bigger problem for the future of Major League Baseball” competitive balance or steroids, 50.1% responded with “competitive balance” compared to 49.8% who answered with “steroids.” (see article)

Let’s be honest, as long as the Yankees have their $200+ million payroll (see payroll numbers here) and keep winning all those World Series, competitive balance will always be a problem. Or is it? How many World Series have the Yankees won in the past 10 years? The same number as the Giants, Phillies, Cardinals, White Sox, Marlins, Angels and Diamondbacks. Only one team has repeated as a champion, and they just experienced an epic collapse in September (read Red Sox).

So what is competitive balance? Is it like pornography, you know it when you see it. So what should I look for (competitive balance wise, not pornography)? If the Yankees win the World Series this year, is that an indicator?

How would you measure competitive balance in sports?