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Friday, January 11, 2019

What Explains Labor’s Declining Share of Revenue in Major League Baseball? by John Charles Bradbury :: SSRN

J.C. Bradbury looks at the dwindling players’ share of MLB revenues. The takeaway…

Player wages are not growing as fast has league revenue because player marginal revenue products have   been falling.  Observations of the returns to success over time indicate that player performance became less valuable during this time-period, which should lower the returns flowing to players
. The falling revenue share of MLB players is consistent with changes in labor’s share in the hospitality and leisure industry, which experienced a decrease from 65.7 percent to 62.1 percent between 1987 and 2011.

The share of income going to players differed   across CBAs, which indicates an important role for collective bargaining between the players’ union and owners in determining player compensation and offers a partial explanation for players’ declining marginal revenue products. Revenue sharing creates perverse
incentives by taxing teams that are successful and transferring the proceeds to losing teams. As revenue sharing increases, teams value player performance less, and labor’s share fluctuated in accord with revenue-sharing arrangements of CBAs. Recent CBAs have included more revenue sharing, which contributed the declining returns to performance and signals a weakening of union bargaining power.

Jim Furtado Posted: January 11, 2019 at 09:28 AM | 9 comment(s) Login to Bookmark
  Tags: cba, economics

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   1. . Posted: January 11, 2019 at 05:28 PM (#5804816)
The falling revenue share of MLB players is consistent with changes in labor’s share in the hospitality and leisure industry virtually every industry in the United States.


FIFY.
   2. What did Billy Ripken have against ElRoy Face? Posted: January 11, 2019 at 05:48 PM (#5804821)
The share of income going to players differed   across CBAs, which indicates an important role for collective bargaining between the players’ union and owners in determining player compensation and offers a partial explanation for players’ declining marginal revenue products. Revenue sharing creates perverse incentives by taxing teams that are successful and transferring the proceeds to losing teams. As revenue sharing increases, teams value player performance less, and labor’s share fluctuated in accord with revenue-sharing arrangements of CBAs. Recent CBAs have included more revenue sharing, which contributed the declining returns to performance and signals a weakening of union bargaining power.
The fact that Jim posted this article not 3 hours after banning YR is just ####### delicious. Should we all pitch in and do a YR Mad Libs response?

EDIT: Wait...it's almost too perfect. Has anyone ever seen YR and JC Bradbury in the same room?
   3. zachtoma Posted: January 12, 2019 at 04:22 PM (#5804937)
1. Cost controls on 0-3 yr service time players & 3-6 yr players (arb), who tend to be the most productive players on the roster
2. Growing realization by teams that veteran FA's often aren't that good and can easily be replaced by 0-6 guys.

The top-end of the FA market hasn't hurt as much, nor has the inexpensive bottom, it's the middle-tier of FA players who've been crushed. No collusion necessary, no malfeasance necessary, the player compensation guidelines as outlined in the CBA simply don't line up with the reality of the league any longer. The incentives to spend on FA's simply aren't there (though I think the luxury tax and draft pick compensation are overly punitive). The big shift in the aging curve is the missing piece of this conversation, and it really does seem to be connected to the end of the "steroid/PED" era, for lack of a better term - a historically high percentage of player-value coming from over-30's suddenly shifting to historic lows. That's changed the complexion of the game more than anything else that I can remember.
   4. Pat Rapper's Delight (as quoted on MLB Network) Posted: January 12, 2019 at 11:41 PM (#5804999)
YR got banned?!?!?
   5. BrianBrianson Posted: January 13, 2019 at 12:10 AM (#5805000)
Yeah, for racist trolling, or racist not-trolling, as the case may be.
   6. Booey Posted: January 13, 2019 at 02:30 AM (#5805013)
Like, banned for good? Or just temporarily suspended?

Also, whatever happened to Sam? Was he finally banned for threats or something?
   7. Fancy Crazy Town Banana Pants Handle Posted: January 13, 2019 at 02:38 AM (#5805014)
Yes, no, banned, yes.
   8. jacksone (AKA It's OK...) Posted: January 13, 2019 at 08:11 AM (#5805027)
Like, banned for good?


Yes


Wow.
   9. . Posted: January 13, 2019 at 12:46 PM (#5805056)
The ban of YR was absurd. Pathetic, really.

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