International Journal of Sport Finance, Volume 15, 2020, Issue 4


The Economics of the NFL Draft: Improved Estimates of Draft-Order Valuations
Christopher M. Duquette and Richard J. Cebula

The National Football League (NFL) allocates new players to the League’s 32 teams using the annual NFL Draft. Teams are permitted to trade various draft picks as the Draft is underway. In the early 1990s, “The Chart” was developed as a price-guide for teams in negotiating draft-pick trades. Massey and Thaler (2013) found that NFL teams make biased judgments in overvaluing the earliest picks relative to later picks. We maintain that Massey and Thaler used flawed input data in their analysis. With newly available player-standardized input data from the Pro Football Reference database, we provide improved estimates of draft-order performance valuations and then produce an improved version of “The Chart.” Using draft picks’ salary data, we identify where teams can expect to reap the most value per unit cost. Our results suggest that the NFL Draft’s middle rounds provide the most value per unit cost, with peak values occurring during the third round.

Does the Offline Environment Matter in Online Horse Race Betting Engagement?

While the viability of many racing industries depends crucially on the sport attracting online bettors, relatively little is known about the role the local offline environment and fan interest plays in consumers’ online gambling. Using Finland as a data source, this paper investigates how off-track betting opportunities and the level of interest in horses in a local environment are associated with online horse race betting engagement. Whilst previous research has usually relied on self-reported surveys, we use objective data extracted from consumers’ online horse race betting accounts and data sources covering the horse race betting environment, equine statistics, and sociodemographic statistics of Finnish municipalities. Our findings suggest that the off-track betting environment and the level of interest in horses in a municipality appear to be predictors of online horse race betting engagement as measured by betting volume and the number of bettors.

Do High Wage Footballers Play for High Wage Teams? The Case of Major League Soccer
Rachel Scarfe, Carl Singleton and Paul Telemo

Intuition and sports knowledge suggest that the most talented professional footballers play for the best teams, i.e., positive assortative matching based on productivity. We consider Major League Soccer (MLS) between 2007 and 2017. We estimate a wage equation, finding that player and team fixed wage premiums are negatively correlated. This is a puzzle, especially because our estimates of players’ wage premiums do correlate strongly with measures of their performance on the pitch, and there is evidence of positive teammate sorting. However, the estimated wage premiums of MLS teams are highly and negatively correlated with their success in the league and their home game attendance. This finding is consistent with an explanation whereby part of an MLS team’s success comes from its ability to bargain down the price that it pays for talent.

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