Does Income Inequality In the NFL Affect Team Performance?
Abstract
In the NFL, players are paid based on their output on the field. Money left after paying big salaries for top players is invested in less valued players that superstars can hopefully use to win with. These uneven salary distributions could be the reason why some teams have unsuccesful seasons. A salary cap puts a limit on the amount of money a team can spend on its players per season, thus creating a more even distribution of talent among all NFL teams and therefore making the game more competitive. With a salary cap, teams are forced to allocate their resources more efficiently and choose the best combination of talent in order to build a team that will maximize wins. The more a team wins, the greater their overall franchise is worth, thus increasing profitability. The careful distribution of a team's salary cap to its players is directly correlated with a team's ability to thrive as a franchise.
Session Name:
Sports Economics
Start Date
10-4-2015 9:00 AM
End Date
10-4-2015 10:00 AM
Location
HSB 300
Does Income Inequality In the NFL Affect Team Performance?
HSB 300
In the NFL, players are paid based on their output on the field. Money left after paying big salaries for top players is invested in less valued players that superstars can hopefully use to win with. These uneven salary distributions could be the reason why some teams have unsuccesful seasons. A salary cap puts a limit on the amount of money a team can spend on its players per season, thus creating a more even distribution of talent among all NFL teams and therefore making the game more competitive. With a salary cap, teams are forced to allocate their resources more efficiently and choose the best combination of talent in order to build a team that will maximize wins. The more a team wins, the greater their overall franchise is worth, thus increasing profitability. The careful distribution of a team's salary cap to its players is directly correlated with a team's ability to thrive as a franchise.