An industry test for ethnic discrimination in major league soccer

ABSTRACT

This paper tests for salary discrimination based on player ethnicity in Major League Soccer (MLS) by making innovative use of player movements in a unique setting. The discriminating team investigated is Club Deportivo Chivas USA, which had a preference for employing Hispanic players. Evidence of discrimination is found by analyzing how other teams valued the former players of Chivas USA differently across ethnicity after the team was disbanded by the league. The nature of MLS player contracts and drafting rules allow for a simple and unique test for salary discrimination that has not previously been possible to implement.

KEYWORDS:

• Discrimination
• soccer
• ethnicity
• draft

JEL CLASSIFICATION:

• J71
• Z22

Acknowledgments

I would like to thank Kazumi Nozawa for providing inspiration for this article as well as the participants of the WEAI’s 92nd annual meeting in San Diego for useful comments.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ Technically, there are no team owners in MLS. Each ‘owner’ is termed an ‘investor-operator’ and is a shareholder of the league itself with exclusive rights to operate a team and to receive certain game-day revenues from that team. The subtle difference here is inconsequential and the term ‘owners’ will be used throughout.

² The fielded rosters include all players in the starting lineup as well as substitutes used.

³ Trevor Spangenberg was not selected in any of the drafts but is treated as being selected since he later signed with New England Revolution at a salary that was 37% higher than the previous year. Although contract data is not available to determine what Chivas USA would have paid him in 2015, a 37% increase in salary seems unlikely. Similarly, Eric Avila is treated as not being selected since he was loaned out to Orlando City from his Mexican team Santos Laguna at a lower salary than what Chivas USA paid him.