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Is Winning Everything?

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  • Karl W. Einolf

Abstract

The data envelopment analysis technique is used to measure franchise payroll efficiency in the National Football League (NFL) from 1981 to 2000 and Major League Baseball (MLB) from 1985 to 2001. This article shows that there is a significant difference in the level of franchise inefficiency between MLB and the NFL because of the different financial structure in these leagues. MLB franchises, with little revenue sharing and no salary cap, tend to be less efficient than NFL franchises. Big spending and inefficient MLB franchises tend to come from large media markets, although this is not the case in the NFL. This article also shows that NFL franchise efficiency significantly improved after the salary cap was introduced in 1994.

Suggested Citation

  • Karl W. Einolf, 2004. "Is Winning Everything?," Journal of Sports Economics, , vol. 5(2), pages 127-151, May.
    • Handle: RePEc:sae:jospec:v:5:y:2004:i:2:p:127-151
    DOI: 10.1177/1527002503254047
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    References listed on IDEAS

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    Cited by:

    1. Brian Volz, 2009. "Minority Status and Managerial Survival in Major League Baseball," Journal of Sports Economics, , vol. 10(5), pages 522-542, October.
    2. José L. Ruiz & Diego Pastor & Jesús T. Pastor, 2013. "Assessing Professional Tennis Players Using Data Envelopment Analysis (DEA)," Journal of Sports Economics, , vol. 14(3), pages 276-302, June.
    3. Colin Santos Regan, 2012. "The price of efficiency: examining the effects of payroll efficiency on Major League Baseball attendance," Applied Economics Letters, Taylor & Francis Journals, vol. 19(11), pages 1007-1015, July.
    4. Herbert F. Lewis & Thomas R. Sexton & Kathleen A. Lock, 2007. "Player Salaries, Organizational Efficiency, and Competitiveness in Major League Baseball," Journal of Sports Economics, , vol. 8(3), pages 266-294, June.
    5. Ester Gutiérrez & Sebastián Lozano, 2014. "A DEA Approach to Performance-Based Budgeting of Formula One Constructors," Journal of Sports Economics, , vol. 15(2), pages 180-200, April.
    6. Trevor Collier & Andrew L. Johnson & John Ruggiero, 2011. "Measuring Technical Efficiency in Sports," Journal of Sports Economics, , vol. 12(6), pages 579-598, December.
    7. Scott Beaulier & Robert Elder, 2011. "Using ‘‘Dominetrics’’ to Impose Greater Discipline on Performance Rankings," Journal of Sports Economics, , vol. 12(1), pages 55-80, February.
    8. Carlos Pestana Barros & Nicolas Peypoch & Scott Tainsky, 2014. "Cost efficiency of French soccer league teams," Applied Economics, Taylor & Francis Journals, vol. 46(8), pages 781-789, March.
    9. Wiseman Frederick & Chatterjee Sangit, 2010. "Negotiating Salaries through Quantile Regression," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 6(1), pages 1-15, January.
    10. Russell D. Kashian & Jeff Pagel, 2016. "Measuring X-Efficiency in NCAA Division III Athletics," Journal of Sports Economics, , vol. 17(6), pages 558-577, August.
    11. Vineet M. Payyappalli & Jun Zhuang, 2019. "A data-driven integer programming model for soccer clubs’ decision making on player transfers," Environment Systems and Decisions, Springer, vol. 39(4), pages 466-481, December.
    12. An‐Pang Wang & Che‐Wei Chang & Juin‐Ming Tsai & Shiu‐Wan Hung, 2021. "A performance evaluation of Major League Baseball teams: An integrated social network and data envelopment analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(6), pages 1421-1434, September.
    13. Michael A. Roach, 2018. "Testing Labor Market Efficiency Across Position Groups in the NFL," Journal of Sports Economics, , vol. 19(8), pages 1093-1121, December.
    14. Lewis, Herbert F. & Lock, Kathleen A. & Sexton, Thomas R., 2009. "Organizational capability, efficiency, and effectiveness in Major League Baseball: 1901-2002," European Journal of Operational Research, Elsevier, vol. 197(2), pages 731-740, September.
    15. Boon L. Lee & Andrew C. Worthington, 2013. "A note on the ‘Linsanity’ of measuring the relative efficiency of National Basketball Association guards," Applied Economics, Taylor & Francis Journals, vol. 45(29), pages 4193-4202, October.
    16. Helmut Dietl & Tariq Hasan, 2007. "Pay-Tv Versus Free-Tv: A Model Of Sports Broadcasting Rights Sales," Eastern Economic Journal, Eastern Economic Association, vol. 33(3), pages 405-428, Summer.
    17. Laurens Cherchye & Frederic Vermeulen, 2006. "Robust Rankings of Multidimensional Performances," Journal of Sports Economics, , vol. 7(4), pages 359-373, November.
    18. Michael C. Davis, 2009. "Analyzing the Relationship Between Team Success and MLB Attendance With GARCH Effects," Journal of Sports Economics, , vol. 10(1), pages 44-58, February.
    19. Anthony Glass & Karligash Kenjegalieva & Jason Taylor, 2015. "Game, set and match: evaluating the efficiency of male professional tennis players," Journal of Productivity Analysis, Springer, vol. 43(2), pages 119-131, April.
    20. Nikos Chatzistamoulou & Kounetas Kostas & Antonakis Theodor, 2022. "Salary Cap, Organizational Gap, and Catch-up in the Performance of NBA Teams: A Two-Stage DEA Model Under Heterogeneity," Journal of Sports Economics, , vol. 23(2), pages 123-155, February.
    21. Michael C. Davis & Christian M. End, 2010. "A Winning Proposition: The Economic Impact Of Successful National Football League Franchises," Economic Inquiry, Western Economic Association International, vol. 48(1), pages 39-50, January.
    22. Chris Jeffords & Todd Potts, 2019. "NFL Salary Cap Allocation: Matching Theory with Observed Behavior," Economics Bulletin, AccessEcon, vol. 39(1), pages 270-279.

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