The NFL Salary Cap and Veteran Players’ Salaries
DOI:
https://doi.org/10.14738/abr.57.3436Keywords:
National Football League (NFL), professional athletics, wage determination, salary capAbstract
The salary structure and process of wage determination in the American National Football League (NFL) is perhaps unique among professional sports: contracts are not guaranteed, careers tend to be very short, and the league operates under a salary cap that limits teams’ payrolls. Thus, while a fairly well-defined set of performance metrics exists for most professional football players, the usual relationship between measured performance and compensation—i.e. higher productivity translates into higher pay—may be blurred, empirically observable, or even nonexistent. This paper investigates this issue using a four-year panel of veteran professional football players. Our analysis suggests that although performance plays a role in determining salaries in the NFL, experience, durability, and mobility are the most important factors veteran player compensation.
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