Research Handbook of Employment Relations in Sport
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Research Handbook of Employment Relations in Sport

Edited by Michael Barry, James Skinner and Terry Engelberg

Employment relations, much discussed in other industries, has often been neglected in professional sports despite its unique characteristics. The book aims to explore in detail the unique nature of the employment relationship in professional sports and the sport industry.
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Chapter 3: Performance expectations, contracts and job security

John Solow and Peter von Allmen


In this chapter we discuss the idiosyncratic nature of labor contracts in North American professional baseball, football, ice hockey, and basketball and how the long-term employment relationships that result from such contracts impact performance incentives, job security, and risk allocation. These labor markets differ greatly from sport to sport and involve multiple levels of bargaining. The outcome of the bargain between the league and the players’ union determines the contract space within which individual players can bargain with individual teams and may include such things as minimum and maximum salary levels, salary guarantees, and allowable contract length. Accordingly, it is difficult to draw overarching conclusions. We sketch a general theoretical framework in which to consider the issues, address the roles played by players, teams, player associations, and leagues, and then survey some of the empirical literature pertaining to performance, pay, and risk allocation.

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