Contract options for buyers and sellers of talent in professional sports

Contract options for buyers and sellers of talent in professional sports / Duane W. Rockerbie, Stephen T. Easton.

This Palgrave Pivot re-examines salary formation in Major League Baseball in light of real option theory to clarify the connection between salary and marginal revenue product for professional baseball players. Current literature has tended to treat single-year and multi-year contracts similarly, ign...

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Bibliographic Details
Main Author: Rockerbie, Duane W.
Other Authors: Easton, Stephen T.
Format: eBook
Language:English
Published: Cham : Palgrave Macmillan, 2020.
Series:Palgrave Pivots in sports economics.
Subjects:
Major League Baseball (Organization)
Baseball players > Salaries, etc. > United States.
Professional sports contracts > United States.
Baseball players > United States > Salaries, etc.
Labour economics.
Econometrics.
Economics.
Business & Economics > Labor.
Business & Economics > Econometrics.
Business & Economics > Economics > General.
Baseball players > Salaries, etc.
Professional sports contracts
United States
Online Access:Click for online access
Table of Contents:
  • Intro
  • Preface
  • Contents
  • List of Figures
  • List of Tables
  • 1 On the Rise: Player Compensation and Multi-year Contracts
  • 1.1 Introduction
  • 1.2 A Brief History of Multi-year Contracts: Early Years (1876-1975)
  • 1.3 Early Years of Free Agency
  • 1.4 Free Agency Since 2000
  • 1.5 Multi-year Contracts in Basketball, Football, and Hockey
  • 1.6 Player Salaries and Marginal Revenue Products: the Scully Method
  • 1.7 Real Options
  • References
  • 2 The Puzzle of Overpaid and Underpaid Players
  • 2.1 Introduction
  • 2.2 A Revenue Model
  • 2.3 Estimates of the Revenue and Winning Percentage Functions
  • 2.4 Calculating a Player's Net MRP
  • 2.5 A Linear Probability Model
  • 2.6 Summary
  • References
  • 3 Contract Options for Buyers and Sellers of Talent
  • 3.1 Introduction
  • 3.2 Employment Contracts that Include Real Options
  • 3.3 Setup of the Real Options Model
  • 3.4 The Player's European Put Option
  • 3.5 The Owner's European Put Option
  • References
  • 4 Extensions to the Put Option Model
  • 4.1 The Player's Option Value in a Three-Year Contract
  • 4.2 The Owner's Option Value in a Three-Year Contract
  • 4.3 Option Values with Different Career Profiles
  • 4.4 Contract Values with Player and Owner Put Options
  • 4.5 Multi-year Contracts with Option Years
  • 4.6 No-Trade Clauses in Multi-year Contracts
  • References
  • 5 Concluding Remarks
  • 5.1 An Empirical Test
  • 5.2 Extensions to the Real Options Model
  • References
  • Index

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