Labour market regulation and team performance: The Victorian Football League's Coulter Law, 1930–1970

Highlights

► We test whether non-compliance with VFL regulations improved team performance. ► Player turnover is used as a proxy for individual wage rates. ► Clubs lost players to minor leagues regardless of compliance with regulations. ► Performance was affected by loss and replacement of players, not wage structure.

Abstract

The Coulter Law was a set of Victorian Football League (VFL) recruiting and payment rules that operated from 1930 to 1970 and set maximum wages for individual players. Testing of the conventional view – that most VFL clubs breached these rules to maximise the utility derived from winning games – is hampered by the unavailability of individual wage data. We develop a model that observes connections between player turnover and team performance at three VFL clubs. The ways that clubs managed team payrolls in a regulated labour market are not sufficient to explain variations in team performance. Clubs lost experienced players to minor leagues, regardless of whether they complied with the Coulter Law. The ability of clubs to develop replacement players had a stronger influence on team performance.

Keywords:

• Professional sports
• Australian Football
• Maximum wage
• Labour markets
• Competitive balance
• Wage distribution

Acknowledgements

Thanks to Braham Dabscheck, Jeffrey Williamson and two anonymous SMR readers for comments on an earlier draft of this paper.