Very interesting analysis by Bleacher Report:
bq. "The green line is the Yankees, and the other lines reflect the rest of the league [ranked by spending] at five-team intervals (the No. 5 team, the No. 10 team and so forth). Notice that through 1993, the top 20 or so teams are relatively closely bunched.... Even after the Yankees became the (almost) constant No. 1 team, the pace of salary separation between the charted teams remains fairly constant for eight years.... But then what has happened since [2001] is clearly illustrated. While the spacing of the other intervals remained fairly consistent, the Yankees payroll skyrockets... [and is now a] full 75 percent higher than the No. 5 team in the league."
The Red Sox have largely matched this spending, but as the graph shows, everyone else has not been able to match. And the unbalanced schedule of playing your own division's teams 19 times and other teams 6 times has made things worse. Result? In the last 11 years, only 1 team other than the Yankees or Red Sox has even made the playoffs from the American League East.
Ultimately, this could lead to folded franchises in Toronto and Tampa, and no-one willing to be in that division. Which is probably what it will take before any changes are made. Baseball isn't 30 or so individual businesses; it's really one business, in competition with other entertainment options across the country. But that isn't its financial structure, and the sport typically needs near-death experiences to produce any change.
I think the writer from Bleacher Report places far too much importance on the divisions. If we eliminated the concept of divisions, the Yankees and presumably the Red Sox would still be in the post-game. Baseball Prospectus rates them the number 2 and number 3 teams in baseball respectfully.
OTOH, the divisions and unbalanced schedule draw people to games throughout the year because of greater interest in playing a regional rival or playing a game that might have special significance in determining who wins the division.
What he really lays out is a problem for the three other teams in the American East. As I understand it, when the Yankees spend too much money, they have to pay a surcharge that goes to smaller market clubs like the Royals. Maybe more of that money should stay inside the division?
(Note: The Yankees haven't won the World Series since 2000 or been in the WS since 2003. Money can buy you into the post-game, but I'm not so sure it buys you fresh arms, uninjured stars and a team spirit)