Small market teams can win: see the A's, Marlins, Diamondbacks, and Rays. They just have to find their competitive advantage. Billy Beane found his with his analysis, and it worked.
The natural economic forces in an industry are pretty predictable over a long period of time. As an industry matures, there is a natural tendency for it to go through a period of growth, followed by a period of consolidation to the point where one of two things happen: (1) the industry gets completely "commoditized" when competing products are almost identical by any measure and it is not an attractive industry for growth because the profit margins are so low; or (2) the industry is dominated by a single company who may or may not function as a true monopoly.
This is a very important concept to consider because I can think of no industry where the number of competitors offering similar -- or even identical -- products has remained stable or grown over time. Change is what defines an industry over time, and yet professional sports is one industry where change cannot be tolerated -- or at least must be harnessed, controlled, and "socialized" by sharing it among all competitors.
This is why a professional sports league doesn't function like an industry at all, but as a cartel that would never be permitted in a truly competitive capitalist environment. If professional baseball were truly a capitalist venture, then a team like the Yankees would be permitted to have 40 players on their roster instead of 25, a team like Tampa Bay would be permitted to grow trees in the outfield to add some excitement for their fans, a team like the Mets might use aluminum bats to give them some more power, etc. While all of this sounds ridiculous, a look back at the history of organized sports will reveal that this sort of thing (well, maybe not the trees in the outfield!) wasn't all that unusual way back in the days when sports were much more "capitalist" and less structured.