Team Payroll Disparity in Professional Sports—NFL, NBA, NHL

One interesting topic in sport finance is the disparity that exists between team payrolls in professional sports. Some teams consistently carry payrolls above the cap and as a result pay a “luxury tax” imposed by the league. Other teams on the opposite end have minimal payrolls, with an entire team’s compensation amounting to the cost of three or four stars on a cap-exceeding team. For this assignment you are to compare the 1) payrolls, 2) rosters, and 3) individual salaries of a cap-exceeding team and a team in the bottom 10 of compensation in a professional sport. Compare not only the 1) teams’ winning percentages and 2) league finishes but also 3) the previous year’s statistics for the starting players. Salaries can be found by doing a Google search. Use the format below to create a spreadsheet when submitting the assignment. 

I: In comparing salaries and statistics, develop tables or spreadsheets with the following information.

Cap Exceeding Team Bottom Compensation Team

Payroll

Roster

Individual Salaries

Last years:

Winning percentage

League finish

Starting players final stats (all positions)

II: Perform a cost–benefit analysis for each of the players to determine who outperformed their salaries, and who was not worth the money. Then draw conclusions about high versus low payrolls. Much of this will be subjective in nature, but it is an opportunity to gather data, process and compare the data, and then draw conclusions.

III: Use your cost-benefit analysis to establish a monetary compensation for each of the players on the two teams for the following season, based on their believed overall impact on team performance.