Impact of NFL Salary Cap Concentration on Team Success

This article by Timothy E. Zimmer (2016)
examines how a team distributes their salary cap, and how that affects their
success. Addressing how the NFL allows money to be spent with their regulations,
and if these effect winning percentages, margin of victory, and offensive yard
ranks.  Zimmer looks at a 10-year span
from 1999-2009 to collect the data. Zimmer found that how they concentrate
salary is important, and that you must spend to the cap to succeed. Teams who
underspend are usually less successful. However, Zimmer says it is important to
understand that pay doesn’t represent ability (Zimmer, pg. 55). So, where the
teams distribute the money they spend is important too. Bigger market areas seem
to attract better talent. So, Pittsburgh for instance is a nice city and big
market. Thus, players are more likely to come in to play there no matter the
contract. Teams must find the right balance of elite performers and balance of
pay. Teams can’t overpay one player and under pay for the rest and expect to
succeed. On the other side of that coin, teams cannot ignore having elite
players at all and expect to succeed either. Teams must find a way to properly
allocate their cap space.

impact of salary dispersion and performance bonuses in NFL organizations

In this article, Maxcy and Mondello
(2009) aimed to see if how money is distributed effects how teams perform. Not
only was on-field performance covered, but team revenue as well. So, the focus
was on if want for higher compensation will drive higher performance. This especially
counts in the NFL, where due to salary cap money must be distributed in
different ways. So, teams must throw more money at “superstar” talent, and this
article addresses if that is worth it. These players create a higher salary cap
hit, and demand more incentives on the contract. Maxcy and Mondello found that
salary dispersion is better for revenue than on-field performance. When it
comes to players, the team plays better when the salaries of players are at
least pretty comparable and relatively close in amount. However, when it comes
to revenue on the business side of the NFL, dispersion is good. This confirms
the assumption that effort at a business level is driven by possibility of
higher compensation for success. So, managing on-field salary cap is extremely
important. While paying some elite talent more is okay, dispersion of salaries
evenly over most of the roster is ideal.

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Allocation of scarce resources: Insight from the NFL
salary cap

article by Richard Borghesi (2008) covered how the salary cap effects how
players are paid at different stages in their careers, and how that effects
production. It took a look at a 10-year period from 1994-2004. This is because
1994 is when free agency began in the NFL, and that’s when salary took a
forefront to players and when the salary cap became hard to work around. The
studies found that payment typically is based on talent that is perceived rather
than proven. So, more money is given to young players with potential, leaving
less cap for more proven and experienced players. Also, it showed that the
veterans know what they are worth and are less likely to accept less than what
they should get. With the salary cap it is hard to then pay the more proven
players, so it effects on field performance by the team. The article went over
how salary cap dispersion affected offense and defense individual performance. When
it comes to starters, they aren’t discouraged by how much other starters make. However,
both offensive and defensive production goes down when starters feel that
back-ups are paid too much. So, players morale and performance are based on
what they feel they deserve compared to others.

Compensation and Team Performance: Salary Cap Allocation Strategies across the

            In this article by Max Winsberg
(2016), a more in-depth look was taken to see how pay by position affects
performance and team success. Also, it examined how the salary cap made
allocating the wealth harder and made decisions more complex. A little over one
extra win was seen for every 10% more spent on the cap (Winsberg, 2014).









Borghesi, R. (2008). Allocation of
scarce resources: Insight from the NFL salary cap. Journal Of Economics
& Business, 60(6), 536-550. 

Mondello, M., & Maxcy, J.

(2009). The impact of salary dispersion and performance bonuses in NFL
organizations. Management Decision,
47(1), 110-123.

Zimmer, T. E. (2016). The Impact of
NFL Salary Cap Concentration on Team Success. Choregia, 12(1), 53-66.


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