Abstract

Abstract In this article, we analyze how different representation models of professional football players affect their salaries in salary negotiations. We distinguish between self-representation, representation by relatives and representation by player agencies. Based on the principal agent theory and against the background of asymmetric information, we hypothesize that the self-representation model has the most lucrative effect on salaries. Furthermore, we argue that the number of players represented by an agency has a negative effect on salaries. To test our hypotheses, we use a unique panel dataset containing 3,775 players from the top five European leagues over five collection dates. In addition to market values and salaries, we also include individual and team performance. Furthermore, we use information on the different representation models and, in the case of player agencies, information on the particular agency. In our study, we found no significant effect of the representation model on the salary of professional football players, which challenges the justification of agencies in general.

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