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

  • Kevin G. Quinn

    (St. Nobert College)

  • Melissa Geier

    (St. Nobert College)

  • Anne Berkovitz

    (St. Nobert College)

Registered author(s):

    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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    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
    Contact details of provider: Web page: http://www.cdes.fr/index.php?id=fr69

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

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    1. 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.
    2. 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.
    3. Michael A. Leeds & Sandra Kowalewski, 2001. "Winner Take All in the NFL," Journal of Sports Economics, , vol. 2(3), pages 244-256, August.
    4. 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.
    5. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-30, December.
    6. 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.
    7. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
    8. Edward P. Lazear & Sherwin Rosen, 1979. "Rank-Order Tournaments as Optimum Labor Contracts," NBER Working Papers 0401, National Bureau of Economic Research, Inc.
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