Does Performance Consistency Pay Off Financially for Players? Evidence From the Bundesliga

Abstract

The purpose of the current study is to investigate how consistency of professional soccer players’ performance affects salaries in the German Bundesliga. Using game-level data for five consecutive seasons ( n = 34,413 player–match day observations), we find empirical evidence for a salary premium to players showing volatility in performance. Applying ordinary least squares, fixed-effects as well as quantile regression analyses, this effect remains robust.

Are Workers Rewarded for Inconsistent Performance?

“…Our initial results (see Table 8, regressions 1 to 4) show that we can replicate previous findings from German football. Using more precise salary and performance measures (the IVG single composite measure), we find that inconsistent players earn more than consistent ones; similar to Deutscher and Büschemann (2016) An increase of the average performance by one unit increases salaries by 7.4%, while increasing the average performance by one standard deviation would raise salaries by 11.3% in the OLS regression. If performance inconsistency increases by one unit, salaries increase by 7.9%.…”

“…In some cases, principals prefer consistent performances to volatile ones by their agents (Bodvarsson & Brastow, 1998;Deutscher, Gürtler, Prinz, & Weimar, 2017;Dickinson & Oaxaca, 2014), in other cases, researchers suggest that principals prefer inconsistent agents to consistent ones (Bollinger & Hotchkiss, 2003;Deutscher & Büschemann, 2016). Although existing literature finds evidence for either case, the question under which conditions inconsistency is penalized or rewarded remains ambiguous, especially because the necessary conditions are not identified.…”

“…In contrast to Deutscher and Büschemann (2016), who use the same single performance proxy measure (journalist ratings for player performances) for all players regardless of field position in the team, we use actual salary data, which is clearly superior to market values and other proxies. Deutscher and Büschemann's (2016) analysis of Bundesliga football lacks data on both direct salaries and player performances, so the authors use proxy measures. The salary proxy is a player valuation measure created by experts at Kicker sports magazine.…”

“…Bollinger and Hotchkiss (2003) empirically test baseball player's salaries and performances and find that inconsistent baseball players earn a salary premium compared to their colleagues who have the same average performance but do not offer larger upside potential. Deutscher and Büschemann (2016) and Deutscher et al (2017) study the relationship between player salaries and performance variation in the German Bundesliga and in the NBA, respectively. For German football, the researchers offer evidence that players are more highly rewarded for more inconsistent performance.…”

The Payoff to Consistency in Performance

“…Similar to findings about salary discrimination, the results from two decades ago cannot be taken 3. Using subjective rather than objective performance measures, Deutscher and Büschemann (2016) study the effect of performance consistency on soccer players' estimated market values. They find a negative correlation between performance consistency and market values.…”