Incentives in Team Sport

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In the NBA, no contract may include ‘Unlikely Bonuses’ in any season that exceeds 15% of the player’s ‘Base Compensation’, meaning that the majority of their salary is guaranteed regardless of their performance. With most NBA players signing between 2 and 3 contracts over the course of their career,  many players perform without direct financial pressure of incentives. Moreover, most incentives are given for individual performance, such as points scored, rather than team success. In this article we explore how teams should incentivise their players to maximise team performance. 

The first question to address is how to determine any given player’s value. Take a 3-man team, with players A and B already selected and one of either player C or D being selected for the third position; how do you decide between player C and D. Ideally, you would play a game with each player and control for as many variables as possible (such as teammates and quality of opposition), taking as large a sample size as possible to mitigate the impact of these variables, selecting the player whose team performs best on aggregate.  

In practice, this is an inexact science as the nature and shear quantity of variables affecting a player’s performance cloud this processWhat is startling is that professional sport teams often value players on individual performance rather than team performance, which would intuitively make players sensitive to their own statistics rather than winning games, which should be the aim of any sporting organization.  

The English Premier League is perhaps the most striking example of needing to change how it incentivises its players. Sometimes its negative impacts are blatant: Paul Pogba’s attempt to steal his teammate’s goal, resulting in it being disallowed due to him being offside, is a prime example of a player putting his personal objectives before the team’s. More generally, examples of greed can be seen regularly during any football match. Whilst it would be ignorant to attribute such greed solely to their incentives, surely if a larger proportion of a player’s salary was dependent on their team’s success they would put their team forward more often.  

The downsides of such an approach are obvious: football is a team sport, and teams may struggle to recruit players if they were paying them based off the performance of 10 other players. Whilst this is a risk many teams will be unwilling to take, pursuing a salary structure whereby players are incentivised based on team performance is worth a shot for clubs where recruitment is either not possible (i.e. strained financial situation) or where it is not needed (i.e. they already have a squad with enough talent).