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Economics of Sports

Economics of Sports. Unit 6: Value of Sports Talent. Table 7-1 Details of 50 Top Athletes and Earnings, 2008. Notes: Salary/Winnings include bonuses. Total earnings includes endorsement income. Figure 7-1 Randy Johnson’s Experience-Earnings Profile.

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Economics of Sports

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  1. Economics of Sports Unit 6: Value of Sports Talent

  2. Table 7-1Details of 50 Top Athletes and Earnings, 2008 Notes: Salary/Winnings include bonuses. Total earnings includes endorsement income.

  3. Figure 7-1Randy Johnson’s Experience-Earnings Profile Legend: Charting salary against experience for Randy Johnson (the data are in Table 7-4) generates his experience-earnings profile. It is common for all such profiles increase slowly at first, then rise quite rapidly, tailing off toward the end of a worker’s earning years.

  4. Table 7-2Average and Median Salaries in Pro Sports Leagues (2009 dollars) (slide 1 of 2)

  5. Table 7-2Average and Median Salaries in Pro Sports Leagues (2009 dollars) (slide 2 of 2) Notes: Averages assume total payroll reports are for the 25 man MLB roster, 15 man NBA roster, 53 man NFL roster, and 23 man NHL roster.

  6. Table 7-3Celebrity Pay, 2008(slide 1 of 2)

  7. Table 7-3Celebrity Pay, 2008(slide 2 of 2)

  8. Figure 7-3Ticket Prices and Payrolls, Boston Red Sox (2009 dollars) Legend: Adjusted for inflation, the average salary paid by the owner of the Boston Red Sox shows two significant episodes of decline. But ticket prices increased over nearly the entire period in the figure. The idea that rising salaries can cause rising ticket prices is not supported.

  9. Table 7-4Randy Johnson’s Pay and Performance (slide 1 of 2)

  10. Table 7-4Randy Johnson’s Pay and Performance (slide 2 of 2) Notes: ERA is averaged across teams in 1989 and 1998. Lifetime includes partial 2009 performance not shown.

  11. Figure 7-4Ticket Prices and Payrolls, Boston Celtics ($2009). Adjusted for inflation, the average salary paid by the owner of the Boston Celtics had some significant ups and downs early on. But ticket prices increased steadily over that time. The idea that rising salaries can cause rising ticket prices is not supported. Notes and Sources: See Figure 7.3.

  12. Table 7-5Major League Payrolls, 2008 ($Millions) (slide 1 of 3)

  13. Table 7-5Major League Payrolls, 2008 ($Millions) (slide 2 of 3)

  14. Table 7-5Major League Payrolls, 2008 ($Millions) (slide 3 of 3)

  15. Figure 7-5Ticket Prices and Payrolls, New England Patriots ($2009). Adjusted for inflation, the average salary paid by the owner of the New England Patriots showed a number of periods of decline. But during those, there always was at least one significant increase in ticket prices. The idea that rising salaries can cause rising ticket prices is not supported. Notes and Sources: See Figure 7.3.

  16. Figure 7-6Ticket Prices and Payrolls, Boston Bruins ($2009). Adjusted for inflation, the average salary paid by the owner of the Boston Bruins almost continually increased over time. But ticket prices did not. The idea that rising salaries can cause rising ticket prices is not supported.

  17. Table 7-6Compensation Packages for First-Round NFL Draft Picks, 2009 (slide 1 of 2)

  18. Table 7-6Compensation Packages for First-Round NFL Draft Picks, 2009 (slide 2 of 2) Notes: Includes total package signing bonuses.

  19. Table 7.7Matthew Stafford Contract Details Notes: The option bonus must be paid in any event. If Stafford fails to take 35 percent of the snaps in 2009, the “No Option” case holds. If he does, the “Option” case represents the highest pay to Stafford.

  20. Table 7-8Purses and Shares in Tennis and Golf Majors Notes: Tennis purses for U.S. Open and Australian Open are the total for both men and women; separate amounts not reported. The French Open purses do not include mixed doubles, men's seniors, or per diem. Total: $17.6 million. Currency converted at current rates.

  21. Table 8-1Salary History of Willie Mays

  22. Table 8-2MLB’s First Crop of Free Agents *The percentage change was for 1975 and 1977, unless player had no observed 1975 salary in which case the percentage change was for 1976 and 1977.

  23. Table 8-3Average Salaries in Pro Sports Centered around Free Agency (All values in 2009 dollars)

  24. Table 8-4A-Rod’s Contract

  25. Table 8-5Standard Deviation of Winning Percent Imbalance, Pre- and Post-draft (slide 1 of 2)

  26. Table 8-5Standard Deviation of Winning Percent Imbalance, Pre- and Post-draft (slide 2 of 2) Note: Author’s calculations.

  27. Table 8-6Competitive Balance and the Reserve ClauseBefore and After Free Agency in MLB (Adjusted for Expansion)

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