possibility of developing a salary cap for college coaching salaries. This particular idea allows students to propose positions to address the issue while learning more about the legal implications of their actions. The case study is divided into four parts. Part I includes teaching notes for instructors on
Evie Oregon, Lauren McCoy, Lacee’ Carmon-Johnson and Angel Brown-Reveles
Annelies Knoppers, Barbara Bedker Meyer, Martha Ewing and Linda Forrest
This study examined salary differences between female and male Division I college coaches using three approaches. The human capital approach contends that salary differences are rooted in differences in qualifications. In contrast, a structural approach argues that gender differences in salary are associated with the gender ratio, the proportion of women to men in an occupation. The third approach, capitalist patriarchy, sees the gender wage gap as a function of the intersection of capitalism and patriarchy. We explored each of these approaches and found the greatest support for the latter. Coaches’ wages seemed to be determined for both women and men by both gender and type of sport. Additionally, gender ratio was positively related to the salaries for men only. We discuss the findings as well as their implications for the setting of first-year salaries and the ways in which salary differentiation can be an example of the manner in which gender relations are constructed in sport.
Wilbert M. Leonard II
This study replicated Christiano’s inquiry on race and salaries in major league baseball in 1987. However, instead of merely dichotomizing the independent variable into black and white, the data were trichotomized into white, black, and Hispanic categories. Unstandardized regression coefficients (after disaggregating the observations by race / ethnicity, position, and free agency status) revealed several instances of salary inequities but no systematic patterning. The conclusion: The salaries of baseball players varying in race / ethnicity were not consistently different even while holding other theoretically relevant variables constant.
Kevin J. Christiano
Using data on the salaries of 212 nonpitchers appearing in team lineups on major league baseball’s 1977 Opening Day, this article explores how rewards to veteran professionals are influenced by race. Multiple regression analyses and separate comparisons of regression coefficients for returns to performances by blacks and by whites reveal a single indication of salary discrimination against blacks. White infielders are apparently paid more for each home run they hit than are their black counterparts.
Kevin J. Christiano
A series of multiple regression analyses using the most recent publicly available data on the salaries of veteran hitters in major league baseball uncovers little evidence of economic discrimination by race. Comparisons of unstandardized regression coefficients for player variables, by race and position, reveal a number of instances of inequality. However, these inequalities do not occur consistently with respect to the same type of performance, nor do they always place blacks at a disadvantage. Furthermore, blacks who do not enjoy the market power granted to players by the advent of free agency are not uniformly victimized by discrimination in salaries. Instead, the newest evidence suggests that signs of salary discrimination that were found in data on hitters from the 1977 season are not manifest 10 years later.
Lawrence Hadley and Elizabeth Gustafson
Earnings equations are estimated for major league baseball hitters and pitchers using salary data for the 1989 season. The results indicate that final-offer salary arbitration and long-term contracts have a large positive impact on salaries. The impact of free-agency eligibility is also positive, but smaller man arbitration eligibility. This implies that some players have used the arbitration process to extract above-market salaries. Therefore it is concluded that it would be in the interest of the owners to replace arbitration with earlier eligibility for free agency.
Wilbert M. Leonard II
This study refined and extended Christiano’s recent inquiry on race and salaries in major league baseball. Instead of merely dichotomizing the independent variable into black and white, the data were trichotomized into white, black, and Hispanic categories; pitchers, because they were not studied, provided the focal point. A model of salary for pitchers was both specified and tested. Unstandardized regression coefficients (after disaggregating the units of analysis by race/ethnicity) revealed several instances of salary inequities but small ns precluded systematic testing. Hence, the verdict is still out as to whether or not the salaries of baseball pitchers varying in race/ethnicity are consistently different while holding other theoretically relevant variables constant.
Marc Lavoie and Wilbert M. Leonard II
The distinction between starting and relief pitchers is crucial for a correct assessment of pay determination. Nevertheless, making this distinction does not alter the trend of empirical findings, namely that there is no salary discrimination against blacks in baseball.
This paper derives equivalent gross salary for Major League Baseball free agents weighing offers from teams based in states with different income tax rates. After discussing tax law applicable to professional sports teams’ players, including “jock taxes” and the interrelationship of state and federal taxes, this paper builds several models to determine equivalent salary. A base-case derivation, oversimplified by ignoring nonsalary income and Medicare tax, demonstrates that salary adjustment from a more tax expensive state’s team requires solely a state (but not federal) tax gross-up. Subsequent derivations, introducing nonsalary income and Medicare tax, demonstrate full Medicare but small federal tax gross-ups are also required. This paper applies the model to equalize salary offers from two teams in different states in a highly stylized example approximating the 2010 free agency of pitcher Cliff Lee. Aspects of the models may also be used to inform other sports’ players of their after-tax income if salary caps limit the ability to receive adequately grossed-up salaries.
Morris B. Holbrook and Clifford J. Shultz II
The spectacular salaries paid to various baseball stars—and the ongoing player-management acrimony over those salaries—leads one to question the relationship between performance and compensation during what may someday be referred to as the “golden era” of free agency. After reading the available work on the determinants of ballplayer compensation, one may still wonder what effect today's hit, strikeout, assist, or error exerts on tomorrow's salary—or, more colloquially, “How much is a home run worth?” The present study addresses these questions from the vantage point of a salary-updating model. This model assumes no salary cap and posits that, according to an updating or ratcheting process, future salary depends on current salary and current performance.