[kschellenger]

Small market teams can compete, they just haven't yet had the ownership to do so. Look at the owners of most of the small market teams, they are some of the worst in baseball (or at least in the eyes of their fans.)
It begins and ends with a farm system. Look at the Brewers. They've loaded up on talented young players who all came up to the bigs this year/next year. They did alright this year and drew a lot more fans (which means more money) than in the past. They now have a small window to succeed before the young players are due up for new contracts or arbitration. If they succeed, they will make more money. Then they can keep their players.
Overall, money does rule baseball in the long run. Clearly the small markets with little or no tradition can not compete with the NYY or BOS of baseball year in and year out on the open market. But, with a little bit of revenue sharing or better ownership, small market teams can compete, IMO.