Player Salaries and Revenues in the Australian Football League 2001–2009: Theory and Evidence

Abstract

Abstract

Superstar Productivity and Pay: Evidence from the Australian Football League

“…Under the hard salary cap enforced by the AFL, this minimum wage may work to compress star pay and force teams to transfer rents to marginal players. That is, teams may wish to pay marginal players less and pay star players more but cannot do so because of binding ceilings and floors on player pay (Booth et al., 2012). Through the league’s collective bargaining agreement, union influence, in the form of the AFL Players' Association, may also play a role in this process (ABC, 2017).…”

“…Examining player payments in the AFL, Booth et al. (2012) finds that the player salary share of AFL expenditure and revenue data fell over the period from 2001 to 2009. We contribute to this literature by linking unbiased estimates of superstar players' marginal productivity to the distribution of player pay in the AFL.…”

“…As the first study on the financial performance of clubs in the AFL, Pinnuck and Potter (2006) shows that teams' off-field financial success (i.e., match attendance and club memberships, etc) is positively related to both their short-and long-term onfield success. 8 Examining player payments in the AFL, Booth et al (2012) finds that the player salary share of AFL expenditure and revenue data fell over the period from 2001 to 2009. We contribute to this literature by linking unbiased estimates of superstar players' marginal productivity to the distribution of player pay in the AFL.…”

Sidelined: employment relations in professional sports

“…In the ER literature, interest in sports has remained concentrated on a few particular issues, such as the analysis of the share of total sporting revenue that players receive and how this is distributed among players (e.g. Booth, Brooks & Diamond, 2012;Dabscheck, 2011;Ducking, Groothuis & Hill, 2014), with little attention paid to many other areas, such as governance, institutions and regulation, or indeed the nature of work itself. Equally, sports academics have not drawn extensively on the field of ER despite the growing importance of ER to the way sport is organised, conducted and governed.…”

“…Player salaries can also be impacted by systems that try to equalise competition through the capping of player payments. Caps restrict wealthy clubs from monopolising the most talented players, but also constrain the capacity of employees either individually or collectively to obtain a higher share of the revenue of sports through their agents or through collective bargaining agreements (Booth, Brooks & Diamond, 2012). These effects are tempered, to some degree, by rules in some codes that allow experienced players to become 'free agents' who can offer their services to other teams; however, if overall salary caps apply then free agency may still not lead to dramatically higher salaries or allow the richer teams to obtain all the premium talent (Sandy, Sloane & Rosentraub, 2004).…”