Race and the Evaluation of Signal Callers in the National Football League David J. Berri (California State University, Bakersfield) Rob Simmons (Lancaster University Management School)

NFL Labour Market Entry of players normally by college draft Free agency normally only after 4 years Some monopsony power for owners Binding salary cap: 55-64% of designated team revenues allowable for team wage bill Multi-period contracts with many contingency clauses Player trades but not usually for cash

Concern About Black Representation in NFL Few black quarterbacks though increasing in number: 1/35 in 1971, 3/43 in 1994, 11/36 in 2006 NFL wants to encourage more black head coaches- Rooney rule for head coach hires No black owners (yet) Segregation: Blacks dominate specialist offense & defence; Whites dominate quarterback, offensive line & kickers Is there salary discrimination for black QBs?

Quarterback Rating [(Completion rate - 0.3)/0.2 + (Yards/Pass attempt -3)/4 + Touchdowns/Pass attempt/ ( Interceptions/Pass attempt)/0.04]*100/6 Maximum score = (?) Really this is a passing-efficiency measure

Weakness of QB Rating Does not include rush yards And black QBs rush more than white QBs Are black QBs compensated for this aspect of their performance? An alternative measure that does include QB rush yards is QB score: All yards – (3*all plays) – (30*all turnovers) Simpler measure, black QBs more productive than white on this measure- both per game and per play

Literature on Pay Discrimination in Sports Basketball: Hamilton, App Econ 1997: uses quantile regressions to show whites earn less than blacks at lower end of pay distribution while blacks earn less than whites (18%) at top end Bodvarsson/Partridge, Lab Econ 2001: no evidence of employer discrimination but find evidence of white co- worker & nonwhite customer discrimination NFL: Kahn, ILRR 1992: some evidence of customer discrimination- white (black) salaries vary positively with % whites (blacks) in local metropolitan areas

Salary Statistics: Pass Attempts >0,

Kernel Density: White Salary

Kernel Density: Black Salary

Black-White Salary Distribution Black: skewness = 0.72; kurtosis = 2.49 White: skewness = 1.07; kurtosis = 3.38

How to Measure Performance? Quarterback rating Quarterback score- includes rush yards Detailed measures e.g. pass yards, touchdowns, fumbles, interceptions Just pass yards and rush yards

 The Model LOG SALARY =  0 +  1 PERFORMANCE +  2 PROBOWL +  3 EXPERIENCE +  4 EXPERIENCE SQ +  5 POP +  6 VETERAN+  7 CHANGE TEAM +  8 OFFENSE SALARY +  9 DRAFT ROUND 1+  10 DRAFT ROUND 2+  10 BLACK +  11 BLACK*PERFORMANCE + error `

Estimation Issues Separate black/white equations: not enough observations BLACK interaction terms Quantile regression- since salary distributions are skewed

Control variables for salary Standard concave shape of salary-experience profile, at median salary is maximised at 8 to 9 years High draft round has positive effect on salary, as does ‘veteran’ (free agency) Changing team lowers salary Local population size has no effect on salary (revenue sharing in NFL) Greater total offense salary is associated with higher QB salary Career pass attempts is a significant predictor

Quantile Regression of Log Real Salary BLACK QB RATING BLACK* QB RATING

With QB score BLACK QB SCORE BLACK* QB SCORE

With full performance measures BLACK PASS YARDS BLACK* PASS YARDS

With pass yards & rush yards only BLACK (1.76) PASS YARDS BLACK* PASS YARDS (1.93)

Conclusions Few opportunities for black quarterbacks until recently Quarterback salary depends on draft position, veteran status, change of team, experience and number of career pass attempts Important to identify an appropriate measure of performance: QB SCORE is suitable Black quarterbacks have less dispersed and less skewed salary distribution relative to blacks Little evidence of wage discrimination evaluated at means Rush yards are not rewarded as a performance measure- although this is a special attribute of black QBs But some evidence that black quarterbacks get lower salaries than whites from quantile regressions when BLACK is interacted with PASS YARDS This discrimination result applies at median and above