Returns to Popularity on NBA Contracts

Economic theory suggests that both athletes and team managers should trade off the security of a longer contract and annual salary when negotiating contracts. However, previous research on sports contract structure has established that in practice, there is generally a positive relationship between length and salary, even when controlling for performance variables. Research has attempted to solve this issue using instrumental variables with limited success. We suggest the key factor of player popularity as a potential solution for the endogeneity issue, and in the absence of suitable instruments, use the nonlinear structure of NBA contract length to identify the model. Using fan All-star votes as a proxy for popularity, we find that it is positively correlated with both length and salary and that popularity shows diminishing returns to both contract length and salary as a player increases in age.

经济学理论表明，在合同谈判环节，运动员与球队管理层均需权衡长期合同的保障程度与年薪水平。然而，过往针对体育合同结构的研究证实，即便在控制球员表现变量的前提下，合同时长与年薪之间通常仍存在正向相关关系。此前有研究尝试通过工具变量法（instrumental variables）解决该内生性问题（endogeneity issue），但成效有限。对此，我们提出以球员人气作为解决内生性问题的关键因素；在缺乏合适工具变量的情况下，我们借助NBA合同时长的非线性结构对模型进行识别。我们以球迷全明星投票数作为球员人气的代理变量（proxy variable），研究发现人气与合同时长、年薪均呈正向相关；且随着球员年龄增长，人气对合同时长与年薪的边际收益均呈现递减趋势。