Pay and Performance Major League Sports

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**Term Paper Proposal**

**Purpose Statement**

“The dependent variable **revenue** is determined by independent variables **average salary**, **matches played**, **number of goals** and **performance (Number of points earned)”**

“The most important independent variable in this relationship is **performance (number of points earned)** because **this determines the position of the team**”

**Definition of variables**

The dependent variable, in this case, is revenue. This can also be interpreted as the predicted variable. i.e., with the independent variable, we can define a linear relationship which can forecast the future value of revenue given the independent variables. Any change in the independent variables should influence revenue. For example, the performance of a team directly affects the amount it receives from the trophy.

The first and most important independent variable is performance. Performance, in this case, is measured by the number of points earned in the whole league. A win in each match earns the team three points; a draw earns it two points while a defeat earns it zero points (Statista, 20117). Hence, if a team has won all the games, it will have the maximum number of points. Thus, if a team has the maximum number of points, it gets the trophy and earns a token. To this end, this is the most important independent variable because it determines the position of the team.

The second independent variable is average salary. In this case, average salary refers to the salary received by players. As a hypothesis, the club which pays the highest amount of salary is likely to attract the best players. When the best players are in a team, this will make them win many games and influence the general performance of the team causing it to receive a higher reward. Also, these best players can be used to attract more fans to the club causing the stadium to be filled whenever there is a match. This directly generates revenue. These players are also used in advertisement hence generating revenue for the club.

The third independent variable is the number of goals. The higher the number of goals scored, the higher the chances of being the best performer. Take for example a situation where, for example, Manchester United has won eight matches with eight goals and Manchester City has won equally eight games but with 24 goals (World Football, 2017). Determining the winner here will not depend on the points but the goal difference and hence it will be better. Therefore, the number of goals determine the revenue of a club. Also, there are trophies which are paid depending on the number of goals earned hence increasing the revenue.

The fourth and the final independent variable is matches played. The number of matches played greatly influences the number of wins hence affecting performance which later influences the revenue.

**Data Description**

The data used for this analysis shall be based on English Premier League season 2017/2018 and UEFA Champions League season 2017/2018. These data shall be extracted online from the football data website which is an open source for football data. Where the data is not organized, it shall be exported to excel and organized by way of bringing only the desired columns together and then prepared for analysis (World Football, 2017). The data have already been archived on these websites by the end of May 2018 and shall be extracted from the date of this research.

**References**

Statista. (20117). *Statista*. Retrieved from Average annual player salary in the English Premier League in 2017/18, by team (in million U.S. dollars): https://www.statista.com/statistics/675303/average-epl-salary-by-team/

World Football. (2017). *World Football*. Retrieved from Premier League 2 – Division 1: http://www.worldfootball.com/s/7988/england/premier-league-2-division-1/2017-2018