Extreme wages, performance, and superstars in a market for footballers

Rachel Scarfe*, Carl Singleton, Paul Telemo

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

We study the determinants of superstar wage effects, asking whether productivity or popularity-based explanations are more appropriate. We use longitudinal wage and performance data for workers (players) and firms (teams) from a particular market for sports talent: Major League Soccer (MLS) in the United States. We find evidence that the top earners, whose annual salaries are mostly not accounted for by their past MLS performances, when compared to other footballers, are paid more because they attract significantly higher stadium attendances and thus revenues. There is no evidence that higher residual salary spending by the teams affects their relative performance in football terms, or that the amounts the teams spend on actual talent affect attendances. Taken together, these results suggest that a popularity-based explanation of superstar wage effects is appropriate among the top earners in this labor market.

Original languageEnglish
Pages (from-to)84-118
Number of pages35
JournalIndustrial Relations
Volume60
Issue number1
Early online date5 Jan 2021
DOIs
Publication statusPublished - Jan 2021

Fingerprint

Dive into the research topics of 'Extreme wages, performance, and superstars in a market for footballers'. Together they form a unique fingerprint.

Cite this