OVERPAID ATHLETES? COMPARING AMERICAN AND EUROPEAN FOOTBALL

Sports fans often complain that the stars they watch are “overpaid” relative to their performance. This article examines this claim by analyzing the relationship between player pay and performance in two major sports: American Football and European football. The essay considers the structure of payment and the distribution of salaries revealing that the National Football League (NFL) has greater restrictions on its labor market than has European football. Since the NFL labor market is restrictive, many players have salaries that are below the amounts that they contribute to team revenues. In contrast, European football has a more open labor market with few restrictions and salaries of European footballers are broadly in line with performance and contribution to team revenues, although overpayment can still occur. In both types of football, growth and distribution of broadcast revenues are important factors determining player salaries. The gap between “superstars” and “journeymen” has widened in both NFL and European football and this poses questions for salary management in each sport.