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Evaluation of the Appropriateness of Annual Salary before Acquiring FA Qualification among KBO League Players

2023; Volume: 9; Issue: 8 Linguagem: Inglês

10.47116/apjcri.2023.08.30

2671-5325

Namho Ko, Yongbae Jeon,

Sports, Gender, and Society

The purpose of this study was to identify whether the salaries of free agent (FA) candidates in the Korea Baseball Organization (KBO) were at the appropriate level.The study used data on game performance, indicators, and salary to derive the average marginal revenue production (MRP) of FA candidates before they acquire FA status, and the average salary to compare and analyze the demand monopoly power utilization (MER) by season.In addition, to understand the impact of the salary arbitration eligibility, the study divided the players into two groups: those who are not eligible for salary arbitration in the first three years and those who are eligible, and compared and analyzed the MER values by group.The study collected data on revenue, winning percentage, and performance for the 10 KBO teams in the 2016, 2017, and 2018 seasons, and collected data on performance and salary for FA candidates who have played at least 100 at-bats.The results of the study were as follows.First, FA candidates in the KBO were paid less than their productivity.Second, the availability of salary arbitration eligibility affected the degree of demand monopoly in the labor market for FA candidates before they acquire FA status.Third, players with negative MER values were those who had high team contributions in the past, were franchise stars, or were close to acquiring FA status.The implications of this study were that the productivity of FA candidates before they acquire FA status was validated through modeling.The study proved that the KBO was a demand monopoly market until FA status was acquired.Based on the results of the study, the following policy implications can be drawn.First, prior to acquiring free agency (FA) eligibility, Korean Baseball Organization (KBO) players received lower salaries than their productivity warranted.Second, the presence of eligibility for salary adjustment requests was influenced by the degree of monopolization in the pre-FA player labor market.Third, players with a negative Market Exploitation Ratio (MER) value were found to have either made significant contributions to their former teams, been franchise stars, or were on the brink of free agency eligibility.