Superstars and Journeymen: An Analysis of National Football Team’s Allocation of the Salary Cap across Rosters, 2000-2005
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.”
|Date of creation:||Jun 2007|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.cdes.fr/index.php?id=fr69|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Edward P. Lazear & Sherwin Rosen, 1979.
"Rank-Order Tournaments as Optimum Labor Contracts,"
NBER Working Papers
0401, National Bureau of Economic Research, Inc.
- 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.
- 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.
- Michael A. Leeds & Sandra Kowalewski, 2001. "Winner Take All in the NFL," Journal of Sports Economics, , vol. 2(3), pages 244-256, August.
- 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.
- Stephen Hall & Stefan Szymanski & Andrew S. Zimbalist, 2002. "Testing the Causality between Team Performance and Payroll: The Cases of Major League Baseball and English Soccer," Journal of Sports Economics, , vol. 3(2), pages 149-168, May.
- Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
- Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-30, December.
When requesting a correction, please mention this item's handle: RePEc:spe:wpaper:0722. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson)
If references are entirely missing, you can add them using this form.