Date of Award

5-2012

Document Type

Thesis

Degree Name

Master of Arts (MA)

Legacy Department

Economics

Advisor

Sauer, Raymond

Committee Member

Maloney , Michael

Committee Member

Tollison , Robert

Abstract

This paper analyzes player compensation and team finances within Major League Soccer's 2007 season by calculating salaries with respect to the player's marginal revenue product and performance parameters. The player's performance index is a calculated overall value which takes into account variations of weighted in-game actions. This performance index is tied together with a player's marginal revenue product to determine their actual economic value with respect to their 2007 rating. The paper concludes that on average, Major League Soccer as a whole compensates players based on the team's marginal revenue product, and not the individuals. The study also finds clear evidence that Designated Players receive an unequal share of revenue with respect to on-field performance.

Included in

Economics Commons

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