In this thesis we develop an objectiv measure of a player’s value to his club, in other words his marginal revenue product (MRP), and then compare it to his annual compensation. We find that players overall seem to be overpaid by their respective clubs, given their contributions. Furthermore we find that a player’s salary is dependent upon his experience, and that this relationship is concave. We also find that higher compensation seems to lead to a higher overpayment, both in absolute numbers, and percentage wise, although the more productive players tend to be less overpaid than the least productive players, relative to their salary. We introduce pay/MRP as a measure for the efficiency of a club’s top management, and show that by minimizing this measure, clubs can significantly improve profits. Lastly, we argue that this measure could be efficiently implemented with a pay-for-performance system.
|Educations||MSc in Mathematics , (Graduate Programme) Final Thesis|
|Number of pages||73|