Testing Causality Between Team Performance and Payroll: The Cases of Major League Baseball and English Soccer

The link between team payroll and competitive balance plays a central role in the theory of team sports but is seldom investigated empirically. This paper uses data on team payrolls in Major League Baseball between 1980 and 2000 to examine the link and implements Granger causality tests to establish whether the relationship runs from payroll to performance or vice versa. While there is no evidence that causality runs from payroll to performance over the entire sample period, the data shows that the cross section correlation between payroll and performance increased significantly in the 1990s. As a comparison, the paper examines the relationship between pay and performance in English soccer, and it is shown that Granger causality from higher payrolls to better performance cannot be rejected. We argue that this difference may be a consequence of the open market for player talent that obtains in soccer compared to the significant restrictions on trade that exist in Major League Baseball

A Win Win: College Athletes Get Paid for Their Names, Images, and Likenesses and Colleges Maintain the Primacy of Academics

California Governor Gavin Newsom signed the Fair Pay to Play Act (SB 206) into law on September 30, 2019. The bill made it illegal for California\u27s universities to prohibit college athletes from receiving compensation for use of their Names, Images, and Likenesses ( NILs ). Lawmakers soon introduced similar bills in other states1 and in Congress. In this Article, we explain the history and role of amateurism in college athletics (Part I); the legal landscape of amateurism and paying college athletes, including NIL payments (Part II); the potential scope of NIL payments (Part III); and the NCAA NIL Committee’s recommendations (Part IV). We conclude by offering a public policy proposal for implementing circumscribed NIL rights for college athletes (Part V)

Female Athletes Are Undervalued in Both Money and Media Terms

Chapter 20 from Whither College Sports: Amateurism, Athlete Safety, and Academic Integrity by Andrew Zimbalist: Intercollegiate athletics is under assault from all sides. Its economic model is yielding increasing and unsustainable deficits and widening inequality. Coaches and athletic directors are the highest paid employees at FBS universities (NCAA Division I Football Bowl Subdivision) by factors of five to ten, or more. Athletes are being cheated on their promised education, do not receive adequate medical care, and are not allowed to receive cash income. Substantial change, either toward reasserting the intended primacy of education for intercollegiate athletes or a further surrender to commercialism, is coming. This book lays out the starkly different paths that college sports reform can follow and what the ramifications will be on the athletes and on the institutions in which they are enrolled. Source: Publisherhttps://scholarworks.smith.edu/swg_books/1013/thumbnail.jp

Testing the Causality between Team Performance and Payroll: The Cases of Major League Baseball and English Soccer

The link between team payroll and competitive balance plays a central role in the theory of team sports but is seldom investigated empirically. This paper uses data on team payrolls in Major League Baseball between 1980 and 2000 to examine the link and implements Granger causality tests to establish whether the relationship runs from payroll to performance or vice versa. While there is no evidence that causality runs from payroll to performance over the entire sample period, the data shows that the cross section correlation between payroll and performance increased significantly in the 1990s. As a comparison, the paper examines the relationship between pay and performance in English soccer, and it is shown that Granger causality from higher payrolls to better performance cannot be rejected. We argue that this difference may be a consequence of the open market for player talent that obtains in soccer compared to the significant restrictions on trade that exist in Major League Baseball.Sports