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

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Scarfe, Rachel and Singleton, Carl and Telemo, Paul (2021) Extreme wages, performance, and superstars in a market for footballers. Industrial Relations, 60 (1). pp. 84-118. ISSN 0019-8676 (https://centaur.reading.ac.uk/94487/)

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Abstract

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.

ORCID iDs

Scarfe, Rachel, Singleton, Carl and Telemo, Paul ORCID logoORCID: https://orcid.org/0000-0002-8275-2681;
  • Item type:Article
    ID code:88509
    Dates:
    Date
    Event
    6 March 2021
    Published
    5 January 2021
    Published Online
    20 November 2020
    Accepted
    15 April 2020
    Submitted
    Notes:Copyright © 2021 Owner. This is the peer reviewed version of the following article: Telemo, P, Singleton, C & Scarfe, R 2021, 'Extreme wages, performance, and superstars in a market for footballers', Industrial Relations, vol. 60, no. 1, pp. 84-118, which has been published in final form at https://doi.org/10.1111/irel.12270. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
    Subjects:Social Sciences > Commerce > Business
    Social Sciences > Economic History and Conditions
    Department:Strathclyde Business School > Economics
    Depositing user: Pure Administrator
    Date deposited:20 Mar 2024 13:10
    Last modified:20 Dec 2024 03:36
    URI:https://strathprints.strath.ac.uk/id/eprint/88509
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