Limiting Player Lists In Sport: Who Really Wins?

A number of sports around the world impose caps on the number of players allowed on a team list. These arrangements are commonly defended on the grounds of maintaining the financial viability of the leagues by limiting salary demands on struggling clubs. However, these restrictions are also consistent with attempts to drive up the wages of listed players. This paper presents a formal test of the outcome of player list controls in the context of the Australian Football League. It is found that player list reductions have been at the expense of player wages and have done little to control the costs of fielding teams. Restrictions on total budgets rather than player wages seems a more effective cost control mechanism than controls on player numbers and/or salaries.