Summary There has always been speculation that professional athletes in particular NBA (National Basketball Association) players are being paid too much money. The question is, however, which factors are determined that influence NBA owners to pay their players excessive amounts? In the article Determinants of NBA Player Salaries by Dr. Robert Lyons Jr., Dr. E. Newton Jackson Jr, and Dr. Aaron Livingston describe the variables that most likely contribute to NBA player salaries. Statistically players are overpaid based on poor or substandard performances. NBA players are exceptionally solicited due to the fact that they are highly competent at one aspect of their game such as shooting or defense. Professors Lyons, Jackson, Livingston explain …show more content…
NBA general managers tend to overspend on a player who they believe will be an immediate impact for their organization, however the professors believe the owners and general managers are making myopic decisions. NBA players are hired and paid based on individual performance (points, rebounds, assists,) and the owners and general managers expect that player to contribute to help the team generate wins. Players are hired based on team needs and potential for example, if a team needs a player that rebounds extremely well they would either sign or draft player. Owners and especially general managers must select a group of players that gives the organization the best chance to win and be successful, even though the task has become more difficult due to financial limitations. The professors came to a conclusion that points per game and field goal percentage are the two main contributors to a player’s salary. Players who have the ability to maintain a high scoring average, shot percentage and has the capability to rebound and deliver assists efficiently will be valued significantly higher (Lebron James, Anthony Davis, Carmelo …show more content…
The theory explains that wages are depended on the amount of capital available for the payment of the players. The more funds the organization accumulates the players will receive raises. The salary cap is consisted of the Basketball Related Income (BRI) which includes the earnings generated from ticket sales, television broadcast rights, stadium naming rights, and merchandise sells. According to theory if the BRI increases as will the salary cap. For example, the NBA signed a remunerative television deal with ESPN and Turner Network (TNT) that will pay the league $2.6 billion yearly beginning in the 2016-2017 season. The NBA salary cap will increase from $63 million to $89 million. There are limited articles considering the NBA player or professional sport salary determinants. Most studies have focused on the disproportion of player salaries and describe how racial discrimination plays a role. For instance, Yang and Lin determined that player demographics such as height, position, draft order, and a team’s market size play a role in determining the players’ salaries and not performance. Methodology Professors Lyons, Jackson, and Livingston used the salaries from the 2013-2014 season. 243 NBA players’ contracts were in the study. Players playing under their rookie contract were excluded because of the fact that players’ salaries restrained by the rookie salary cap. Players under their rookie