Since the beginning of the nineteen hundreds, professional sports have evolved to become more than just a game; it now represents a large portion of the multi billion dollar global entertainment industry. Baseball, nicknamed as America’s Pastime, is a game between two teams, each with nine players. Play involves a bat and ball and one team tries to score by hitting the ball and running around four bases while the other team tries to defend by making it hard to hit the ball and catching it. Then, they alternate between fielding and batting. When the first profession baseball team debuted in 1869, the salary for the entire team was around eleven thousand dollars. In 2014, the lowest payroll on opening day was over sixty-nine million dollars with
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Looking at what motivates player transactions and the correlation between pay and performance, one can better understand the money behind baseball. This paper strives to explain the correlation between performance and salary between different starting pitchers in Major League Baseball.
Theory
When teams operate, much like businesses, their main goal is to earn the most amount of money possible. In order to produce and sell goods or services (in this case, entertainment through baseball), teams have to know the market for their products while combining and balancing the different factors of production, which mainly consist of capital (such as tools and equipment) and labor (players). When teams are trying to maximize their profits, they have to make important decisions regarding player investments and divestments. They will look at how much players can produce (in terms of adding to their revenue) and what players add the most to their revenue. Teams will try and correlate the effects of adding a player and how it affects their performance and revenue. They will compare this added production with the salary of the player. By looking at the change in revenue that results from employing an additional player, teams are focusing on the marginal revenue productivity of …show more content…
The goal of this paper is to illustrate how a player’s marginal revenue productivity of labor can be estimated. Looking at the correlation between salary and marginal revenue productivity of labor for players, there should be a positive correlation between those two items.
Analysis
Throughout the research and analysis process, one can expect to find that there is a positive correlation between salary and marginal revenue productivity of pitchers. It only seems logical that team would want to pay players more when they create more revenue in return. In order to address this question, one needs to look at date and compare it several different variables to ultimately find if there is correlation between a star pitching and an average pitcher. In order to address this question, one needs to look at attendance. Attendance is only of the main sources of revenues for things and it can easier be compared and measured between different dates and other
Looking at what motivates player transactions and the correlation between pay and performance, one can better understand the money behind baseball. This paper strives to explain the correlation between performance and salary between different starting pitchers in Major League Baseball.
Theory
When teams operate, much like businesses, their main goal is to earn the most amount of money possible. In order to produce and sell goods or services (in this case, entertainment through baseball), teams have to know the market for their products while combining and balancing the different factors of production, which mainly consist of capital (such as tools and equipment) and labor (players). When teams are trying to maximize their profits, they have to make important decisions regarding player investments and divestments. They will look at how much players can produce (in terms of adding to their revenue) and what players add the most to their revenue. Teams will try and correlate the effects of adding a player and how it affects their performance and revenue. They will compare this added production with the salary of the player. By looking at the change in revenue that results from employing an additional player, teams are focusing on the marginal revenue productivity of …show more content…
The goal of this paper is to illustrate how a player’s marginal revenue productivity of labor can be estimated. Looking at the correlation between salary and marginal revenue productivity of labor for players, there should be a positive correlation between those two items.
Analysis
Throughout the research and analysis process, one can expect to find that there is a positive correlation between salary and marginal revenue productivity of pitchers. It only seems logical that team would want to pay players more when they create more revenue in return. In order to address this question, one needs to look at date and compare it several different variables to ultimately find if there is correlation between a star pitching and an average pitcher. In order to address this question, one needs to look at attendance. Attendance is only of the main sources of revenues for things and it can easier be compared and measured between different dates and other