Superstar Productivity and Pay: Evidence from the Australian Football League

Abstract

We use game‐level data from the Australian Football League (AFL) to examine superstar workers' productivity and pay. By exploiting teams' injury‐induced line‐up changes between games, we show that, compared with replacement‐level players, superstars increase their teams' likelihood of winning away games by approximately 15 percentage points. While we then show that betting markets appear to appropriately price superstars' marginal productivity, we present back‐of‐the‐envelope calculations that suggest that teams underpay superstar players by at least 30 per cent. We discuss how inaccurate performance evaluations, labour market regulations, long‐term back‐loaded contracts, clubs' attempts to reduce harmful intra‐team pay disparities and on‐field success as a form of payment‐in‐kind may explain our findings.

Overshadowed by Popularity: The Value of Second-Tier Stars in European Football

“…We thus add the 22 second condition of an absence duration smaller than or equal to three days. We argue that this absence duration quite appropriately captures the concealed resting often indicated by reasons such as soreness, cold, and sickness (Ferguson & Pinnuck, 2022). The underlying reason is that strategic resting of key players is unlikely to be reported as an injury with a duration of more than three days, as the training participation of key players is essential for all players (Franck & Nüesch, 2010;Hamilton et al, 2003).…”

“…We follow Franck and Nüesch (2012) and define the top 5% of a league's market value distribution as the threshold for superstar status. While still somewhat arbitrary, this definition follows previously applied superstar definitions in the context of sports (Ferguson & Pinnuck, 2022;Weinberg, 2016) and fulfills the requirement that only a minor share of individuals achieve superstar status (Lehmann & Schulze, 2008;Rosen, 1981). Brandes et al (2008) define the top 2% of the league's market value distribution as superstars but consider the top 5% and the top 8% in their robustness tests.…”

“…While research on the performance impacts of superstars in team sports is extensive (Chen & Garg, 2018;Ferguson & Pinnuck, 2022;Lucifora & Simmons, 2003;Taylor & Bendickson, 2021), second-tier stars have not been directly addressed and defined in previous research. Moreover, by applying performance-based definitions of superstars (Chen & Garg, 2018;Ferguson & Pinnuck, 2022;Wegelin et al, 2022), previous literature on team sports has 3 conceptualized superstars predominantly in line with the perspective of Rosen (1981). Most importantly, a direct comparison of the marginal contributions of second-tier stars and superstars to team performance on the pitch in an "Adler star" setting is missing.…”

“…Previous research on the potential marginal contributions of superstars to team performance on the pitch in various team sports mostly interprets team sports to be a "Rosen star" setting. For example, examining injury-related changes in game lineups in Australian football, Ferguson and Pinnuck (2022) find that relative to substitutes, superstarsdefined as the top 5% based on the league's most widely used quantitative performance ratingincrease the chances of winning away games by 15 percentage points. Wegelin et al (2022) rely on the top 20% of the wins produced statistic to define high performers in the NBA, a measurement based on various individual performance statistics, and capture a player's marginal contribution to winning.…”

Does quality pay off? “Superstar” wines and the uncertain price premium across quality grades

“…While Rosen focuses on the television sector, where information technology allows a small number of talented individuals to serve a large market and reap significant rewards, other worker groups have been investigated, including doctors and lawyers (Rosen, 1983), dentists (Frank and Cook, 1995), CEOs (e.g., Gabaix and Landier, 2008), and agricultural workers (Hill and Burkhardt, 2021). More recently, the superstar theory has been applied to different sectors, such as music (e.g., Brooks, 2021), sports (e.g., Ferguson and Pinnuck, 2022), social media influencers (Lee and Theokary, 2021), academics (Hernández-Julián and Peters, 2022), and cities (Li et al, 2021).…”