Hidden Monopsony Rents in Winner-Take-All Markets : Sport and Economic Contribution of Spanish Soccer Players

In labor markets where few companies compete for many workers the economic theory predicts monopsony rents. Surprisingly, the soccer clubs do not profit from the expected rents. The purpose of this study is to explain such contradictory evidence. Our model and empirical test, using the data of the Spanish professional soccer league for the season 2001/02, suggest that the monopsony rents that the clubs were to obtain from most of the soccer players, would eventually revert to the superstars. The study also illustrates that the market value of players stems both from their sport performance and their economic contribution