Can Higher Salary Cap Bring the Team a Trophy? -The Correlation Between Player Salary Expense and Team’s Ranking

Research Article
Open access

Can Higher Salary Cap Bring the Team a Trophy? -The Correlation Between Player Salary Expense and Team’s Ranking

Jiateng Zeng 1* , Chengting Wu 2 , Ryan Ge 3 , Zhe Tang 4
  • 1 Loughborough University    
  • 2 University of North Carolina at Chapel Hill    
  • 3 Concordia International School Shanghai    
  • 4 HangZhou Wickham School    
  • *corresponding author Zengjiateng@163.com
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/20/20230180
AEMPS Vol.20
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-83-6
ISBN (Online): 978-1-915371-84-3

Abstract

This paper investigates the impact of a team's salary cap on its end-of-season standing. This study made use of data from the Spanish Soccer League (La Liga) and the National Football League (NFL). Four consecutive seasons of correlation and regression analyses were conducted for both leagues to determine the relationship between these two variables. The analysis revealed that in La Liga, a higher salary cap will result in a higher team ranking. However, no correlation between salary caps and NFL team rankings has been found. The root cause for the inconsistent results may be that the disparity in salary cap between NFL teams is insufficient to have an actual impact on team performance. This research is valuable in informing the club manager whether accumulating expensive players to buy the trophy is a feasible strategy.

Keywords:

player salary, salary cap, team performance, team ranking

Zeng,J.;Wu,C.;Ge,R.;Tang,Z. (2023). Can Higher Salary Cap Bring the Team a Trophy? -The Correlation Between Player Salary Expense and Team’s Ranking. Advances in Economics, Management and Political Sciences,20,110-118.
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References

[1]. Totty, E. S., & Owens, M. F. (2011). Salary caps and competitive balance in professional sports leagues. Journal for Economic Educators, 11(2), 45-56.

[2]. Zimbalist, A. S. (2002). Competitive Balance in Sports Leagues: An Introduction. Journal of Sports Economics, 3(2), 111–121. https://doi.org/10.1177/152700250200300201

[3]. Lakhani, K. R., & Ferguson, P. J. (2021). Consuming Contests: Outcome Uncertainty and Spectator Demand for Contest-based Entertainment. Harvard Business School.

[4]. Dietl, H. M., Franck, E., Lang, M., & Rathke, A. (2012). Salary cap regulation in professional team sports. Contemporary Economic Policy, 30(3), 307-319. https://doi.org/10.1111/j.1465-7287.2011.00265.x

[5]. Staudohar, P. D. (1999). Labor relations in basketball: the lockout of 1998-99. Monthly Lab. Rev., 122, 3.

[6]. Zimbalist, A. (2010). Reflections on salary shares and salary caps. Journal of Sports Economics, 11(1), 17-28. https://doi.org/10.1177/1527002509354890

[7]. Aubut, M. (2003). When negotiations fail: An analysis of salary arbitration and salary cap systems. Sports Law Journal, 189, 190-236.

[8]. Miller, K. (2018) How NBA free agency, salary Cap work, Bleacher Report. Bleacher Report. Available at: https://bleacherreport.com/articles/2787871-how-nba-free-agency-salary-cap-work (Accessed: January 30, 2023).

[9]. Sanderson, A. R., and Siegfried, J. J. (2003). Thinking about competitive balance. Journal of Sports Economics, 4(4), 255-279.

[10]. Hall, S., Szymanski, S., & Zimbalist, A. S. (2002). Testing causality between team performance and payroll: The cases of Major League Baseball and English soccer. Journal of sports economics, 3(2), 149-168.

[11]. Buzzacchi, L., Caviggioli, F., Milone, F.L. and Scotti, D., (2021). Impact and Efficiency Ranking of Football Managers in the Italian Serie A: Sport and Financial Performance. Journal of Sports Economics, 22(7), 744-776. https://doi.org/10.1177/15270025211012053

[12]. Spotrac.com, (n.d.). NFL Team Salary Cap Tracker. Retrieved February 4, 2023, from https://www.spotrac.com/nfl/cap/

[13]. Camenker, J. (2022, September 01). The NFL's 25 highest-paid players in 2022: Aaron Rodgers, Russell Wilson, Kyler Murray set the standard. Retrieved January 30, 2023, from https://www.sportingnews.com/us/nfl/news/nfl-highest-paid-players-2022/ot9egmldb6sly6mtqc3jb1dx

Cite this article

Zeng,J.;Wu,C.;Ge,R.;Tang,Z. (2023). Can Higher Salary Cap Bring the Team a Trophy? -The Correlation Between Player Salary Expense and Team’s Ranking. Advances in Economics, Management and Political Sciences,20,110-118.

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About volume

Volume title: Proceedings of the 2023 International Conference on Management Research and Economic Development

ISBN：978-1-915371-83-6(Print) / 978-1-915371-84-3(Online)
Editor：Canh Thien Dang, Javier Cifuentes-Faura
Conference website: https://2023.icmred.org/
Conference date: 28 April 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.20
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Totty, E. S., & Owens, M. F. (2011). Salary caps and competitive balance in professional sports leagues. Journal for Economic Educators, 11(2), 45-56.

[2]. Zimbalist, A. S. (2002). Competitive Balance in Sports Leagues: An Introduction. Journal of Sports Economics, 3(2), 111–121. https://doi.org/10.1177/152700250200300201

[3]. Lakhani, K. R., & Ferguson, P. J. (2021). Consuming Contests: Outcome Uncertainty and Spectator Demand for Contest-based Entertainment. Harvard Business School.

[4]. Dietl, H. M., Franck, E., Lang, M., & Rathke, A. (2012). Salary cap regulation in professional team sports. Contemporary Economic Policy, 30(3), 307-319. https://doi.org/10.1111/j.1465-7287.2011.00265.x

[5]. Staudohar, P. D. (1999). Labor relations in basketball: the lockout of 1998-99. Monthly Lab. Rev., 122, 3.

[6]. Zimbalist, A. (2010). Reflections on salary shares and salary caps. Journal of Sports Economics, 11(1), 17-28. https://doi.org/10.1177/1527002509354890

[7]. Aubut, M. (2003). When negotiations fail: An analysis of salary arbitration and salary cap systems. Sports Law Journal, 189, 190-236.

[8]. Miller, K. (2018) How NBA free agency, salary Cap work, Bleacher Report. Bleacher Report. Available at: https://bleacherreport.com/articles/2787871-how-nba-free-agency-salary-cap-work (Accessed: January 30, 2023).

[9]. Sanderson, A. R., and Siegfried, J. J. (2003). Thinking about competitive balance. Journal of Sports Economics, 4(4), 255-279.

[10]. Hall, S., Szymanski, S., & Zimbalist, A. S. (2002). Testing causality between team performance and payroll: The cases of Major League Baseball and English soccer. Journal of sports economics, 3(2), 149-168.

[11]. Buzzacchi, L., Caviggioli, F., Milone, F.L. and Scotti, D., (2021). Impact and Efficiency Ranking of Football Managers in the Italian Serie A: Sport and Financial Performance. Journal of Sports Economics, 22(7), 744-776. https://doi.org/10.1177/15270025211012053

[12]. Spotrac.com, (n.d.). NFL Team Salary Cap Tracker. Retrieved February 4, 2023, from https://www.spotrac.com/nfl/cap/

[13]. Camenker, J. (2022, September 01). The NFL's 25 highest-paid players in 2022: Aaron Rodgers, Russell Wilson, Kyler Murray set the standard. Retrieved January 30, 2023, from https://www.sportingnews.com/us/nfl/news/nfl-highest-paid-players-2022/ot9egmldb6sly6mtqc3jb1dx

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