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- Title
The Underpayment of Restricted Players In North American Sports Leagues.
- Authors
Krautmann, Anthony C.; von Allmen, Peter; Bern, David
- Abstract
In this paper, we consider whether underpaying players restricted by the reserve clause is a common practice in the three largest sports leagues in North America—the NFL, NBA, and MLB. Our results are consistent with the hypothesis that owners of professional sports teams do exercise monopsony power whenever and wherever they can. Although differences exist across the three sports, our results indicate that in general: restricted players are underpaid; when the negotiating power of players rises, owners are less able to extract a surplus; and, the greatest surplus tends to be extracted from those who create the greatest amount of value.
- Subjects
NORTH America; WAGE payment systems; FREE agents (Sports); MAJOR League Baseball (Organization); NATIONAL Football League; NATIONAL Basketball Association; ATHLETIC leagues
- Publication
International Journal of Sport Finance, 2009, Vol 4, Issue 3, p161
- ISSN
1558-6235
- Publication type
Article