Revenue Sharing and Player Salaries in Major League Baseball

James Richard Hill and Nicholas Jolly

Journal of Sports Economics, 2017, vol. 18, issue 8, 831-849

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.

Keywords: MLB; revenue sharing; collective bargaining; quantile regressions (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jospec:v:18:y:2017:i:8:p:831-849

DOI: 10.1177/1527002515609660

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