Abstract
The salary structure and process of wage determination in the American National Football League (NFL) is perhaps unique among professional sports: contracts are not guaranteed, careers tend to be very short, and the league operates under a salary cap that limits teams’ payrolls. Thus, while a fairly well-defined set of performance metrics exists for most professional football players, the usual relationship between measured performance and compensation—i.e. higher productivity translates into higher pay—may be blurred, empirically observable, or even nonexistent. This paper investigates this issue using a four-year panel of veteran professional football players. Our analysis suggests that although performance plays a role in determining salaries in the NFL, experience, durability, and mobility are the most important factors veteran player compensation.
Highlights
Anyone who has ever listened to sports talk radio knows that the pay scale for professional athletes is one of the favorite topics of discussion among sports fans and members of the media, especially around draft days, free agency periods, and trade deadlines
This should not be surprising: the business of sports has never been bigger or more closely scrutinized, and athletics and sundry merchandising more aggressively marketed; professional athletes’ salaries are part of this trend. This coupled with a similar zenith regarding the degree of labor mobility in the four major North American professional team sports makes professional athletics a fertile area for timely, interesting, and accessible research in wage and salary determination, as well as an opportunity to revisit and update some classic empirical methods used by labor economists
One football position group—offensive line—does not even have a widely established and/or reported uniformly accepted performance metric. This paper investigates these issues by estimating a fixed-effect log wage model using a panel of veteran National Football League (NFL) offensive skill players for the 2012-2015 seasons
Summary
Anyone who has ever listened to sports talk radio knows that the pay scale for professional athletes is one of the favorite topics of discussion among sports fans and members of the media, especially around draft days, free agency periods, and trade deadlines. The NFL “hard” salary cap—an individual team’s player payroll is not allowed to exceed the salary cap for a given year—raises a number of unique, interesting labor market issues. This paper investigates these issues by estimating a fixed-effect log wage model using a panel of veteran NFL offensive skill players for the 2012-2015 seasons.
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