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The Postseason Value of an Elite Player to a Contending Team

Author

Listed:
  • Anthony C. Krautmann

    (DePaul University)

  • James Ciecka

    (DePaul University)

Abstract

This paper suggests the possibility that a superstar's ability to propel a team into the playoffs may make him particularly valuable—pushing his salary beyond that which would otherwise be expected. Whereas a team in Major League Baseball (MLB) could play as many as 11 additional home games by the time it concludes the World Series, the number of home-field playoff games is a random variable with a mean of about 4 extra home games. Using reasonable assumptions, this implies that the expected increase in a MLB team's revenues associated with making the playoffs is about $11 million. The analysis shows that contending teams pay elite players (on average) an extra $2.8 million—a 40% bonus—to lure superstars to their rosters.

Suggested Citation

  • Anthony C. Krautmann & James Ciecka, 2009. "The Postseason Value of an Elite Player to a Contending Team," Journal of Sports Economics, , vol. 10(2), pages 168-179, April.
    • Handle: RePEc:sae:jospec:v:10:y:2009:i:2:p:168-179
    DOI: 10.1177/1527002508321457
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    References listed on IDEAS

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    1. John D. Burger & Stephen J. K. Walters, 2008. "The Existence and Persistence of a Winner's Curse: New Evidence from the (Baseball) Field," Southern Economic Journal, John Wiley & Sons, vol. 75(1), pages 232-245, July.
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    4. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-930, December.
    5. Blass, Asher A, 1992. "Does the Baseball Labor Market Contradict the Human Capital Model of Investment?," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 261-268, May.
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    Cited by:

    1. Terry, Ryan P. & McGee, Jeffrey E. & Kass, Malcolm J., 2018. "The not-so-free agent: Non-performance factors that contribute to free agent compensation premiums," Sport Management Review, Elsevier, vol. 21(2), pages 189-201.
    2. Anthony C. Krautmann, 2013. "What Is Right With Scully Estimates of a Player’s Marginal Revenue Product," Journal of Sports Economics, , vol. 14(1), pages 97-105, February.
    3. Wladimir Andreff, 2014. "The Winner's Curse in Sports Economics," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01243890, HAL.
    4. Thadeu Gasparetto & Carlos Fernandez-Jardon & Angel Barajas, 2014. "Brand Teams And Distribution Of Wealth In Brazilian State Championships," HSE Working papers WP BRP 30/MAN/2014, National Research University Higher School of Economics.
    5. Rockerbie, Duane W, 2010. "Marginal revenue product and salaries: Moneyball redux," MPRA Paper 21410, University Library of Munich, Germany.
    6. Wladimir Andreff, 2014. "The Winner's Curse in Sports Economics," Post-Print halshs-01243890, HAL.
    7. Hofmann, Julian & Schnittka, Oliver & Johnen, Marius & Kottemann, Pascal, 2021. "Talent or popularity: What drives market value and brand image for human brands?," Journal of Business Research, Elsevier, vol. 124(C), pages 748-758.
    8. Rockerbie, Duane & Easton, Stephen, 2019. "A Real Options Approach to Multi-Year Contracts in Professional Sports," MPRA Paper 93062, University Library of Munich, Germany.
    9. Anthony C. Krautmann, 2017. "Risk-Averse Team Owners and Players’ Salaries in Major League Baseball," Journal of Sports Economics, , vol. 18(1), pages 19-33, January.
    10. Dmitry I. Ignatov & Sergey I. Nikolenko & Taimuraz Abaev & Jonas Poelmans, 2014. "Improving Quality Of Service For Radio Station Hosting: An Online Recommender System Based On Information Fusion," HSE Working papers WP BRP 31/MAN/2014, National Research University Higher School of Economics.

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    Keywords

    value; elite player;

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