Revenue Sharing and Player Salaries in Major League Baseball

Authors

James Richard Hill, Central Michigan UniversityFollow
Nicholas A. Jolly, Marquette UniversityFollow

Document Type

Article

Language

eng

Publication Date

12-1-2017

Publisher

SAGE Publications

Source Publication

Journal of Sports Economics

Source ISSN

1527-0025

Abstract

This article analyzes how changes made to the revenue sharing agreement in the 2007 Major League Baseball collective bargaining agreement influenced the salaries of position players and pitchers. The tax rates associated with revenue sharing decreased following ratification of the 2007 agreement. Theoretically, these changes should increase players’ marginal revenue product and, therefore, salaries. Results indicate that position players experienced an increase in salary following the 2007 agreement. Pitchers’ salaries also increased, but by a smaller amount. The effect of the 2007 agreement was different throughout the salary distribution for position players, but uniform throughout the distribution for pitchers.

Comments

Accepted version. Journal of Sports Economics, Vol. 18, No. 8 (December 1, 2017): 831-849. DOI. © 2017 SAGE Publications. Used with permission.

Recommended Citation

Hill, James Richard and Jolly, Nicholas A., "Revenue Sharing and Player Salaries in Major League Baseball" (2017). Economics Faculty Research and Publications. 590.
https://epublications.marquette.edu/econ_fac/590