مقررات بازار کار و عملکرد تیم : قانون کولتر لیگ فوتبال ویکتوریا ، 1930-1970

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.

Graham ‘Polly’ Farmer was a majestic Australian Football player who had dominated the Western Australian Football League since making his debut for East Perth as an 18-year old. During the 1961 season, Farmer, then aged 27, made it known that he wanted to move to a Victorian Football League (VFL) club to play at the highest level possible. In negotiating with Farmer, VFL clubs were restrained by the Coulter Law, the League's recruiting and payment regulations that had been established in 1930 to set a maximum player wage and outlaw the payment of signing-on bonuses and other inducements. Until 1970 the Coulter Law was the major device used by the VFL to stabilise the financial position of its clubs and promote competitive balance – a situation where resources and talent are distributed in a way that makes games unpredictable and attractive to spectators. In 1961 the League's maximum match payment was £6 per game – only 17 per cent of the Basic Wage, Australia's centrally determined minimum wage for full-time workers (Hawke, 1994, p. 146; Hess, Nicholson, Stewart, & De Moore, 2008, p. 239; Vamplew, 1987, p. 156). Farmer chose to join Geelong and his contract included additional payments at a base rate of £1000 per year (over £55 per match in an 18-game season), a guaranteed job as a car salesman and payment of the rent on a house. Geelong also slipped East Perth £1,500 cash in return for releasing Farmer – another practice that was prohibited by the Coulter Law (Hawke, 1994, pp. 148, 151). Farmer was thus able to capture the economic rents that his skills generated, just as he would have been able to have done had the labour market been competitive. Clandestine player payments came from sponsors and patrons and were not part of the formal club wage structure. They were not recorded in club financial statements for reasons of probity and to avoid League sanctions. Football observers had for some time been convinced that breaching the Coulter Law to secure star players was a common practice among clubs. There were complaints in the press that non-compliance by clubs had made the regulations ‘farcical’ as early as 1931 (Donald, 2003, p. 31). In 1950 19-year old Herb Henderson was on a train from Mildura, carrying his football gear in a hessian sack, having been invited to try out with Richmond. Footscray's secretary and another official boarded at North Melbourne, the second last stop, called out Henderson's name and persuaded him to get off the train. For a fee of £100, Footscray signed a player who would become a star fullback (Lack, McConville, Small, & Wright, 1996, p. 162; Western Bulldogs Forever Foundation, 2010, p. 120). Such incidents prompted Hec de Lacy to write of a ‘black market’ for football talent in Melbourne's Sporting Globe in 1951. ‘While the League takes a serious view of any proved breach of the Coulter Law, club officials wink at authority and go on with the bartering and sub-surface trafficking in players’ (de Lacy, 1951, p. 6). Harry Beitzel, a commentator and former umpire wrote in 1967 that players such as South Melbourne's Bob Skilton and St Kilda's Ian Stewart were being paid more than League regulations allowed. ‘It was common knowledge that most of the star players were under contracts that paid them many times more than the Coulter Law limit’ (Hess et al., 2008, p. 239). The willingness of clubs to breach the Coulter Law to attract and retain stars reflected hierarchical wage structures in which the wages bill was dispersed between a few highly paid players and a large number of relatively lower paid players. Clubs also used the regulations ‘as a control over the wage demands of a majority of the players’ (Sandercock & Turner, 1981, p. 123). Most of Farmer's teammates at Geelong received the maximum wage with no further benefits. ‘I was paid the same as everyone else’, one player recalled. ‘There were probably some who got a little more, but I didn’t ask and I didn’t care’ (Bill McMaster, interviewed by Author 1, 29 June 2010). At Melbourne, Australian Football's oldest club, scrupulous adherence to the Coulter Law created a more compressed wage structure. Like other football clubs in Australia and Britain, Melbourne was founded by middle-class sports enthusiasts who never considered that anyone might make a living out of playing the game. In recruiting, the club offered non-monetary benefits that were derived from affiliation with the Melbourne Cricket Club (MCC). Joining Melbourne gave a young man the opportunity to be part of a winning team, to play in finals and to play on the Melbourne Cricket Ground every second week. With selection on the senior list came honorary membership of the MCC and the right to attend all football and cricket matches at the ground. The club found jobs for players that needed them through a formal ‘Coterie’ of patrons and ex-players and if necessary paid the educational fees of players (Ron Barassi, interviewed by Author 1, 18 September 2007). Paying all players equally helped Melbourne to field cohesive teams, in which group norms about teamwork and discipline were obeyed because the approval of the group was valued. Under Frank ‘Checker’ Hughes (coach from 1933 to 1941 and 1945 to 1948) and Norm Smith (coach from 1952 to 1967), Melbourne teams were even, physically strong and did not depend on individual brilliance to win matches (Collins, 2008 and Frost, 2005). The only other club to comply strictly with the Coulter Law was Collingwood, where a philosophy that to pay one person more than another ‘would lead to personal jealousies and discontent’ had prevailed since 1896 (Stremski, 1986, p. 213). VFL clubs faced a perfectly elastic labour supply curve for new players, as the number of young men who were willing to play League football at the maximum wage (or less) was virtually unlimited. Most entry-level players from the Melbourne metropolitan area simply turned up at their local club at the start of training for the new season and asked to try out. Clubs also fielded second and third (junior) grade teams that allowed them to maintain at low cost large squads of potential replacements for senior players. As players matured and took on greater family responsibilities, clubs that continued to pay the maximum wage were likely to have found it difficult to motivate them or prevent them from taking higher paid jobs elsewhere. ‘Home grown’ players who had joined a club for free may have resented extra wages being paid to star recruits, especially where morale was already affected by sectarianism, as was the case at South Melbourne in the 1930s and Hawthorn in the early 1950s (Branagan and Lefebvre, 1995 and Frost, 2005). VFL footballers were weekend athletes, but they were not amateurs. Money from football was important to players, especially in times of generally high unemployment, such as during the 1930s, or when a player lacked the skills needed to enter the labour market for high-paying jobs. A player who was paid only the maximum wage could apply for coaching jobs at minor league clubs, which operated in unregulated labour markets and could offer wage premiums for League players that compensated for lower levels of prestige and standards of play. Well-credentialed League players who were nearing the end of their careers could add value to suburban and country teams and be paid closer to their market value. Fred Fanning's wage increased from £3 to £20 per game when he left Melbourne in 1947 to coach Hamilton in country Victoria (Collins, 2008, p. 145) and when Melbourne's Laurie Mithen was appointed captain-coach of Port Melbourne in the Victorian Football Association (VFA) in 1963 his wage increased from £6 to a reported £30 per game (Keenan, 2008, pp. 124–125). Data from several professional sports have been used to test the influence of labour market flexibility on economic performance. In team sports workers (players) are mutually interdependent and clear, objective performance measures are readily available, as in many cases are the individual wage data needed to calculate measures of intra-team wage disparity (Fricke, Prinz, & Winkelmann, 2003). This is not the case in most other industries. Links have been established in studies of sports with competitive labour markets between payroll size and team success, thus confirming the negative impact of revenue disparities between teams on levels of competitive balance (Hall, Szymanski, & Zimbalist, 2002). Research on the effects of how a team decides to allocate its payroll among players on team performance has involved empirical testing of two theoretical propositions derived from experimental economics and psychological theories. These propositions relate to efficiency wage models – where some workers are paid above the market-clearing wage – where worker effort is influenced by the wage paid to co-workers. On the one hand, where workers’ roles are complementary and teamwork is needed to complete tasks, workers at the tail end of the talent distribution may withhold effort if they perceive that they have not been paid a ‘fair’ wage (Akerlof and Yellen, 1990 and Levine, 1991). This suggests that compression of wage structures is conducive to improved team performance. On the other hand, the argument that reduced effort from highly skilled workers carries ‘damage potential’ for team productivity supports a more hierarchical, dispersed wage distribution (Ramaswamy & Rowthorn, 1991). Data from Major League Baseball from 1985 to 2002 support the ‘fairness’ hypothesis by revealing that greater wage disparity reduces overall team performance (Depken, 2000, Jewell and Molina, 2004 and Wiseman and Chatterjee, 2003). Although the payment of disproportionate wages to highly productive athletes may generate a ‘superstar’ effect through positive externalities such as increased gate and broadcast rights revenue that will increase the potential team payroll (Hausman and Leonard, 1997, Kuethe and Motamed, 2010 and Lucifora and Simmons, 2003), teams will perform better if a payroll is distributed more evenly among team members. These findings challenge the conventional wisdom about the effects of the Coulter Law. Like the maximum wage that held player earnings in English soccer in check from 1901 to 1960 (Harding, 1991, pp. 2–7; Szymanski & Zimbalist, 2005, p. 101), the Coulter Law was intended to equalise the distribution of playing talent by allowing clubs to recruit at a constant marginal cost. ‘The principle of the flat rate is sound and equitable’, argued one football writer when the Coulter Law was introduced in 1930. ‘It should do much to promote general harmony, and should tend ultimately to even up the strength of the teams’ (Sharland, 1930, p. 9). But the Coulter Law could have only achieved the outcomes expected of it if all clubs had been prepared to abide by it (Booth, 2000, p. 176). VFL clubs were owned by members who valued the utility they derived from their teams winning games more highly than the increase in gate revenue that would be gained from an even competition with uncertain outcomes (Dabscheck, 1975a, pp. 178–179). While the VFL Board that made rules to restrict club recruitment and player mobility consisted of delegates appointed by the clubs, clubs themselves were quick to flout those rules if they could obtain a competitive edge by doing so (Stewart, 1984). After Gordon Coulter, the man who chaired the League sub-committee that drafted the regulations died in 1971, journalist Scot Palmer reflected that ‘the Coulter Law was an ineffective piece of football machinery’, because it failed ‘to safeguard the weaker clubs in the purchasing struggle’ because of ‘flagrant abuse of the money rule’ by bigger clubs (Palmer, 1971, p. 60). In the most recent scholarly history of Australian Football, it is argued that the Coulter Law was ‘frequently flouted’ by premiership-hungry clubs and in time ‘collapsed under the weight of its growing irrelevance’ (Hess et al., 2008, pp. 182, 240). Booth (2000, pp. 107–109) argues that the clubs that did not comply with the Coulter Law could attract and retain high quality playing talent and raise their winning percentage at the expense of the clubs that did comply. In doing so, Booth assumes implicitly that dispersed wage structures derived from non-compliance with the Coulter Law improved team performance, favouring the clubs that had the resources to make extra payments. Booth (2000, p. 188) calculates that the introduction of the Coulter Law in 1930 did little to redress imbalances in on-field performance and significant competitive imbalance persisted after 1945. Dabscheck (1975a) made a similar argument, observing that six of the twelve VFL teams – Collingwood, Carlton, Essendon, Melbourne, Geelong and Richmond – won all but four of the VFL premierships contested from 1930 to 1970. Financially weaker clubs – Footscray, Fitzroy, South Melbourne and North Melbourne – remained entrenched in the bottom half of the ladder for almost the entire period, and it was not until the 1960s that St. Kilda and Hawthorn improved their on-field performances. When the VFL created recruiting zones in country Victoria in 1967 to give each club an ‘equal area’ from which to recruit players it was an admission that the Coulter Law had failed to equalise on-field competition (Dabscheck, 1975a, p. 181). No record exists that quantifies the wages that were paid to each League player. Club annual reports list the total value of player payments, but not the ‘silent’ payments that the Coulter Law was designed to stamp out. In this article we use player turnover as a proxy for individual payments to assess the impact of compliance with the Coulter Law on team performance. The retention of players on squad lists normally reflected the value that their clubs placed on their talent. While the Coulter Law allowed clubs to control costs by keeping the marginal cost of paying new players constant, club members were win- rather than profit-maximisers who were concerned with fielding the best possible teams. To do so, clubs may have paid their best players more than the maximum allowed under the Coulter Law to encourage them not to seek alternative employment. Although some players were removed from playing lists because of long-term injury or ill-health, most were cut because they were not selected regularly for matches. We develop a model of player turnover based on two assumptions: (1) that clubs would seek to retain players with 50 or more games of VFL experience, and (2) that clubs would not seek to retain players who left a club after playing 1–9 senior games. This allows us to build data for a range of independent variables and test for the relationship between them and an independent variable, the winning percentages of clubs. For three VFL clubs – Geelong, Footscray and Melbourne – we test propositions about the connections between wage structures, player turnover and team performance. In the following section we examine the background to the Coulter Law and the competition between clubs from several leagues for playing talent. Section 3 contains information about our variables and the procedure for testing the relationship between them. Section 4 reports on the results of the analysis and the concluding section includes a discussion of how the results inform the issue of how the response of clubs to labour market regulation affects team performance.

At the elite level, the Australian Football labour market was (and remains) highly regulated. The Coulter Law, which set a maximum wage and prohibited signing-on fees, was introduced by the VFL in 1930 to promote equity and financial stability among clubs. Anecdotal evidence suggests that while most clubs breached the Coulter Law to attract and retain star players, they also used the regulations to control the wage demands of most of their players. Melbourne and Collingwood were the only clubs to comply strictly with the regulations. Once the Coulter Law was abolished after six players went on strike before the start of the 1971 season competition between clubs for players increased and salaries grew much faster than club revenue (Linnell, 1995, p. 27). In response to rising player costs, the VFL followed the example of North American sports leagues by establishing a national competition (the Australian Football League, or AFL) and exploiting monopoly power to negotiate higher media rights fees, tap new revenue streams from stadium providers and regulate team salaries through salary caps and player drafts (Stewart, Nicholson, & Dickson, 2005). Current first- and second-year AFL players are paid according to a fixed schedule of salaries. The ongoing debate among sports economists about the effects of individual and team salary regulation on team performance addresses broader issues about the relationship between labour market flexibility and firm productivity. Compliance with individual salary regulation reflects a compressed wage structure that may induce greater effort from team members at the tail end of the talent distribution who perceive that they are being paid a ‘fair’ wage. Non-compliance will create a dispersed wage structure in which the payroll is distributed in a way that rewards players who might otherwise exert ‘damage potential’ on team productivity by withholding effort or seeking employment elsewhere. The absence of wage data at the individual level has hitherto made it impossible to test the general view that non-compliance with the Coulter Law allowed wealthy clubs to increase their winning percentage. Information derived from player turnover allows us to develop proxies for individual wage data that can be used to interpret the link between payroll structures and team performance. On one level, our analysis yields neutral results – Geelong, which had a dispersed wage structure, and Melbourne, which maintained a compressed wage structure, recorded identical winning percentages from 1945 to 1970. Of the independent variables tested, the loss of established players had a significant effect on Geelong and Footscray's winning percentage, despite the willingness of these clubs to breach the Coulter Law to retain players. At Footscray, the loss of experience from the playing list also influenced the winning percentage, as did the number of players used in a season at Geelong. At Melbourne, the most significant influences on the winning percentage were the churn of players with less than 10 games experience and the total team experience lost due to player departures. Churn of players was also observed to be a significant factor at Footscray. The ways that VFL clubs managed team payrolls in a regulated labour market are not sufficient to explain variations in team performance. Each of the three clubs considered here lost established players who had provided valuable team experience, regardless of whether payments were made outside the Coulter Law. Each found it hard to retain players in the face of competition from minor leagues that operated in unregulated labour markets, faced low total wage bills and benefited from subsidies from local communities. A key influence on clubs’ on-field success was whether they could recruit and develop replacements that would measure up as League players. In many cases players needed no financial inducement to try out at a VFL club and many were paid at the maximum rate allowable under the Coulter Law. The performance of clubs in the face of player departures may have been influenced by variables that are not captured in our model, such as morale, discipline and quality of coaching. At Geelong, coach Hickey was at the peak of his powers in 1951 and 1952 and captain Fred Flanagan was a respected former military serviceman who could impart discipline onto the players. ‘I never took any mucking around from them’, Flanagan recalled, but at the same time it was, as one player put it, ‘a very happy club’ (Murray, 2009, pp. 67–69). After Footscray finished last in 1958, members levelled criticism ‘at the weak administration for inadequate recruiting, or for at least not making special payments to secure players’ (Lack et al., 1996, p. 205), but morale at the club had been shattered by Charlie Sutton's sacking as coach midway through the previous season (Lack et al., 1996, pp. 202–205). Melbourne's continued success was a tribute to Norm Smith's ability to build winning teams. Smith's sacking during the 1965 season was the culmination of his growing frustration at the club's refusal to ignore the Coulter Law and recruit more aggressively (Collins, 2008). The coach was reinstated four days later, but his relationship with the committee remained strained. Melbourne missed the finals in 1965 and won only three games in the following season. Smith retired at the end of the 1967 season, and to date is the last man to have coached Melbourne to a premiership.