(Winfree, 2015) Roster limits and limited playing time changes this. If an NBA team can only have 12 players, then they are now worried about the difference between MRP and wages, not the ratio. For example, suppose rookies have an MRP of $2 million, but are only paid $1 million. Suppose that superstars have an MRP of $10 million, but get paid $8 million. If there were no roster limits, the teams would sign as many rookies as possible because they are only paying 50 percent of MRP instead of 80 percent.* With roster limits, teams have a fixed number of slots, so this means the profit maximizing strategy is to sign as many superstars as possible. In this case, superstars make the team $2 million as opposed to $1 million for
