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Superstars and Journeymen: An Analysis of National Football Team’s Allocation of the Salary Cap across Rosters, 2000-2005

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Author Info

  • Kevin G. Quinn

    (St. Nobert College)

  • Melissa Geier

    (St. Nobert College)

  • Anne Berkovitz

    (St. Nobert College)

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    Abstract

    The National Football League constrains teams’ payrolls via a “salary cap.” We analyze how teams allocate cap spending across rosters using a data set of over 10,000 player-season observations during 2000-2005. We find that a few players account for relatively high portions of teams’ caps, and that the players’ “cap values” are consistent with both “superstar” and Yule-Simon income distributions. A theoretical model based on a utility function convex with respect to winning is used to explain this result. We also find that the cap has been substantially effective in reducing teams’ ability to “spend their way to championships.”

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    File URL: http://college.holycross.edu/RePEc/spe/Quinn_NFLJourneymen.pdf
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    Bibliographic Info

    Paper provided by International Association of Sports Economists & North American Association of Sports Economists in its series Working Papers with number 0722.

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    Length: 29 pages
    Date of creation: Jun 2007
    Date of revision:
    Handle: RePEc:spe:wpaper:0722

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    Web page: http://www.kennesaw.edu/naase
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    Related research

    Keywords: Sports; NFL; Draft; Quarterback; Productivity;

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    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
    2. Kahn, Lawrence M & Sherer, Peter D, 1988. "Racial Differences in Professional Basketball Players' Compensation," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 40-61, January.
    3. Sloane, Peter J, 1971. "The Economics of Professional Football: The Football Club as a Utility Maximiser," Scottish Journal of Political Economy, Scottish Economic Society, vol. 18(2), pages 121-46, June.
    4. Chung, Kee H & Cox, Raymond A K, 1994. "A Stochastic Model of Superstardom: An Application of the Yule Distribution," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 771-75, November.
    5. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
    6. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-30, December.
    7. repec:sae:jospec:v:3:y:2002:i:2:p:149-168 is not listed on IDEAS
    8. repec:sae:jospec:v:2:y:2001:i:3:p:244-256 is not listed on IDEAS
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