Agency Theory and Principal–Agent Alignment Masks: An Examination of Penalties in the National Football League

2020 ◽  
pp. 1-12 ◽  
Author(s):  
Jeremy J. Foreman ◽  
Joshua S. Bendickson ◽  
Birton J. Cowden
Keyword(s):  
Labor Market ◽  
Agency Theory ◽  
Team Performance ◽  
National Football League ◽  
Professional Sports ◽  
Principal Agent ◽  
Head Coach ◽  
Hiring Decisions ◽  
Coaching Strategies ◽  
Rule Changes

Rule changes are not uncommon in most professional sports, and scholars often study the effects of such changes. Given the substantial increase in rule changes and the substantially different nature of new rules (e.g., safety driven) in the National Football League since 2005, the authors examined how coaches adapt to the changing National Football League in terms of coaching strategies and securing subsequent head coach positions in the labor market. Using agency theory, the authors identified agency misalignment when coaches employ strategies whereby incurring more penalties results in on-field success, but decreases their likelihood of obtaining future employment as a head coach. In addition, the authors found evidence that, regardless of the penalties accrued, former coaches who previously held more head coaching jobs, are Black, or are younger have higher chances of securing subsequent head coaching positions. However, these attributes do not increase team performance, indicating that coach-hiring decisions are incongruent with determinants of coach performance.

Testing Labor Market Efficiency Across Position Groups in the NFL

2017 ◽  
Vol 19 (8) ◽  
pp. 1093-1121 ◽  
Author(s):  
Michael A. Roach
Keyword(s):  
Labor Market ◽  
Market Efficiency ◽  
Team Performance ◽  
National Football League ◽  
Marginal Impact ◽  
Market Inefficiency

This article proposes a new metric to proxy for the incidence of player absences faced by National Football League teams based on the percentage of team payroll resources that are inactive over the course of a season. This variable significantly predicts team performance. Calculating this measure for individual position groups allows me to test for differences in the marginal impact of salary resources across these groups. Results indicate that resources dedicated to offense, in particular to offensive linemen and starting quarterbacks, have the highest marginal impact on team performance. This suggests a market inefficiency where these players were relatively underpaid.

Revenue Sharing and Agency Problems in Professional Team Sport: The Case of the National Football League

1997 ◽  
Vol 11 (3) ◽  
pp. 203-222 ◽  
Author(s):  
Daniel S. Mason
Keyword(s):  
Agency Theory ◽  
National Football League ◽  
Professional Sports ◽  
Revenue Sharing ◽  
Team Sport ◽  
Opportunistic Behavior ◽  
The Past ◽  
Sports Leagues ◽  
Business Entities ◽  
Professional Sports Leagues

Although initially developed as cartels of independently owned and operated clubs joining to produce a sports product for spectator consumption, professional sports leagues have emerged as monopolies wielding significant economic power. By increasing revenue-sharing practices, and thus attempting to align owner interests, leagues have become single-business entities that maximize wealth for the league as a whole. Over the past four decades, the National Football League has implemented such practices to become the most popular team sport in North America. Using agency theory, this paper examines how the NFL's former commissioner, Pete Rozelle, and the League Executive Committee used these practices in order to increase League revenues and decrease opportunistic behavior by team owners. However, certain owners continue to act entrepreneurially, to the detriment of the League as a whole. This behavior is congruent with the tenets of agency theory, which contend that interests will diverge within a principal-agent relationship (e.g., the NFL— NFL teams). Until such time that team owners realize that the welfare of the other League clubs, along with their competitive equality, is paramount in retaining interest in and producing the League product, professional sports leagues will continue to be plagued with problems such as unnecessary franchise relocations and other acts of maverick owners.

scholarly journals Employment Lapses and Subsequent Hiring Disadvantages: An Experimental Approach Examining Types of Discrimination and Mechanisms

2021 ◽  
Vol 7 ◽  
pp. 237802312110198
Author(s):  
Katherine Weisshaar
Keyword(s):  
Labor Market ◽  
Job Performance ◽  
Experimental Approach ◽  
Cognitive Biases ◽  
Job Applicants ◽  
Survey Experiment ◽  
Hiring Decisions ◽  
Positive Information ◽  
Employment Gaps ◽  
Types Of Information

Employment interruption is a common experience in today’s labor market, most frequently due to unemployment from job loss and temporary lapses to care for family or children. Although existing research shows that employment lapses cause disadvantages at the hiring interface compared to individuals with no employment disruptions, competing theories predict different mechanisms explaining these hiring penalties. In this study, the author uses an original conjoint survey experiment to causally assess perceptions of fictitious job applicants, focusing on a comparison of unemployed applicants and nonemployed caregiver applicants, who left work to care for family, to currently employed applicants. The author examines whether disadvantages for job applicants with employment gaps are receptive to positive information (and therefore represent a form of “informational bias”) or are resistant to information (reflecting “cognitive bias”) and further assesses which types of information affect or do not affect levels of bias in fictitious hiring decisions. Results show that positive information on past job performance and social skills essentially eliminates disadvantages faced by unemployed job applicants, but nonemployed caregiver applicants remain disadvantaged even with multiple types of positive information. These findings suggest that unemployed applicants face informational biases but that nonemployed caregiver applicants face cognitive biases that are rigid even with rich forms of positive or counter-stereotypical information. This study has implications for understanding the career consequences of employment disruption, which is especially relevant to consider in light of labor market disruptions during the recent pandemic.

Aggregate Recruiting Intensity

2018 ◽  
Vol 108 (8) ◽  
pp. 2088-2127 ◽  
Author(s):  
Alessandro Gavazza ◽  
Simon Mongey ◽  
Giovanni L. Violante
Keyword(s):  
Labor Market ◽  
Great Recession ◽  
Equilibrium Model ◽  
Random Search ◽  
Firm Dynamics ◽  
Hiring Decisions ◽  
Aggregate Shocks ◽  
Fast Growing ◽  
The Great Recession ◽  
Matching Efficiency

We develop an equilibrium model of firm dynamics with random search in the labor market where hiring firms exert recruiting effort by spending resources to fill vacancies faster. Consistent with microevidence, fast-growing firms invest more in recruiting activities and achieve higher job-filling rates. These hiring decisions of firms aggregate into an index of economy-wide recruiting intensity. We study how aggregate shocks transmit to recruiting intensity, and whether this channel can account for the dynamics of aggregate matching efficiency during the Great Recession. Productivity and financial shocks lead to sizable procyclical fluctuations in matching efficiency through recruiting effort. Quantitatively, the main mechanism is that firms attain their employment targets by adjusting their recruiting effort in response to movements in labor market slackness. (JEL D22, E24, E32, J23, J41, J63, M51)

Chinese Super League stock prices and team performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Eric Mao ◽  
Brian P. Soebbing ◽  
Nicholas M. Watanabe
Keyword(s):  
Team Performance ◽  
Stock Prices ◽  
Stock Price ◽  
Field Performance ◽  
Professional Sports ◽  
Capital Asset Pricing ◽  
Content Type ◽  
Field Team ◽  
Sport Teams ◽  
Super League

PurposeUtilizing the capital asset pricing model (CAPM), the purpose is to analyze whether the stock prices of the corporation that owns sport teams fluctuate based on team performance in the Chinese Super League (CSL).Design/methodology/approachSeveral CSL teams are publicly owned corporations. As such, the authors look to see if on-field performance impacts the stock price of the firms. Using the news model from previous research, seemingly unrelated regressions are estimated on CSL games from 2014 through 2017.FindingsThe results from the main models indicate some evidence of a statistical relationship between on-field team performance and stock price. Furthermore, the findings for individual teams across markets did not hold consistent across different markets. More specifically, the authors found some instances where successful on-field performance led to a decline in stock prices.Originality/valueThe present study further contributes to the growing literature related to on-field performance and stock prices. Unlike previous research, the use of the CSL as the empirical setting provides the opportunity to use multiple stock markets which provides an opportunity to further examine this relationship. Finally, the study contributes broadly to the literature on professional sports ownership structures around the world.

Defensive Coordinator and Head Coach Effects on Team Defensive Performance in the National Football League

2020 ◽  
Vol 21 (5) ◽  
pp. 493-524
Author(s):  
Joshua D. Pitts ◽  
Brent A. Evans
Keyword(s):  
National Football League ◽  
Head Coaches ◽  
Head Coach ◽  
The Impact

This research examines the impact of defensive coordinators and head coaches on team defensive performance in the National Football League (NFL). We find that elite and very poor defensive coordinators and head coaches can have meaningful impacts on their teams’ defensive performances. A team’s defensive performance is shown to improve with increased defensive coordinator tenure. Similarly, defensive coordinators and head coaches who were NFL players contribute to improved defensive performance compared to coaches without experience as NFL players. In addition, a 3-4 defensive alignment is found to be associated with improved defensive performance compared to a 4-3 defensive alignment.

Professional Sports Team Community Protection Acts 1982 and 1984–1985

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
Los Angeles ◽  
National Football League ◽  
Major League Baseball ◽  
Professional Sports ◽  
Revenue Sharing ◽  
The United States ◽  
Congressional Hearings ◽  
Sports Team ◽  
Community Protection ◽  
Predatory Tactics

This chapter focuses on the Congressional hearings conducted in 1982 and 1984–1985 to address the issue of franchise relocation. It first considers the so-called community protection acts that were introduced during the early 1980s in the wake of franchise relocations in the National Football League (NFL) and the lingering ill-will triggered by the expansion Washington Senators' move to Texas. It then looks at the legal wrangling between the NFL and Al Davis over his relocation of the Oakland Raiders to Los Angeles, along with legislators' push for franchise expansion and their doubts about revenue sharing in the NFL and Major League Baseball (MLB). It also examines the United States Football League's (USFL) antitrust suit against the NFL accusing it of being an illegal monopoly and using predatory tactics to thwart the USFL.

Closing the Last Vestige of a “Free Market” In Labor 1964

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
High School ◽  
National Football League ◽  
Major League Baseball ◽  
Free Market ◽  
Professional Sports ◽  
National Basketball Association ◽  
Reverse Order ◽  
Sports Leagues ◽  
The Impact ◽  
Professional Sports Leagues

This chapter examines the issues surrounding player draft in professional sports leagues. During the postwar era, baseball officials and players often mentioned free agents. Unlike the free agents of our era, however, these players were talented amateur players. Indeed, high school and college players constituted the remaining vestige of a free market for baseball labor during the postwar era. The owners quickly discovered that this free market for labor was costly and made attempts to curb spending on amateur players, sparking allegations of cheating that led to distrust among them. This chapter first considers the creation of the amateur draft in Major League Baseball (MLB) before discussing the reverse-order draft in the National Football League (NFL) and the player draft in the National Basketball Association (NBA). It concludes with an assessment of the impact of the draft on owners and players.

scholarly journals Exploring the Missing Link Between the Concussion “Crisis” and Labor Politics in Professional Sports

2017 ◽  
Vol 7 (1) ◽  
pp. 110-131 ◽  
Author(s):  
Sean Brayton ◽  
Michelle T. Helstein ◽  
Mike Ramsey ◽  
Nicholas Rickards
Keyword(s):  
Critical Discourse Analysis ◽  
Brain Injuries ◽  
National Football League ◽  
Professional Sports ◽  
Popular Press ◽  
Health Issues ◽  
Labor Politics ◽  
The North ◽  
Sports Concussions ◽  
Further Development

This study focuses on connections between labor struggles in professional sports and the epidemic of concussions among athletes, specifically in the National Football League (NFL) and National Hockey League (NHL). Using a critical discourse analysis (CDA), we explain how popular media presents concussions in ways that are informative but often avoid a more politicized discussion of the athlete as a manual worker whose body succumbs to use and abuse of sport. We found two recurring themes in the North American popular press, including a tendency to (1) rely on a trope of “millionaires-versus-billionaires” to explain (and minimize) recent labor lockouts in the NFL and NHL and (2) shift focus on league deniability to athletes’ self-responsibility in the concussion “crisis.” Despite the urgency in which sports concussions and brain injuries have been reported in recent years, the two narratives work to discourage readers from recognizing how such health issues arise under specific relations of production, and that an athlete is a particular type of worker whose body is subjected to decline and disposability like so many other bodies under late capitalism. As we argue, working conditions are inseparable from concussions in professional sports, a phenomenon that requires further development within the popular press.

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