However, some factors show that professional athletes are underpaid. Uncertain career could be the reason for fewer salaries to professional players. There is always instability in player’s profession. In the sports labour market price controls are prevailing for professional athletes. There are certain criteria through which salary of a specific player can be decided. For example: during the year 2006-07, an NBA player was earning $1,262,275 with an experience of at least 10 years. Despite of having so many years of experience players are getting less salary (Evens and Lefever, 2011).Expectation plays an important role for players and management in deciding wages. The salaries of players have been decided in advance before any sports season starts. Magnitude of salary depends upon the past performances of the player (Evens and Lefever, 2011). Salaries based on expectations act as a motivator for the players. Best performance means good salary in the future.
Generally, it is seen in the sports market that new players are paid less than the experienced players in the team despite of their performance on the field. One reason for this difference in wage rate is reserve clause. According to this clause, a player is tied to the contract for the first six years of his career. Due to this contract, bargaining power of a new player becomes less. Thus, there is a direct relationship between player’s experience and salaries. More experience leads to high salary and vice-versa. When a seller of labour interacts with buyer of labour, it forms a labour market. People sell their services to employers in return for getting income or wages. In a competitive labour market, there are large number of buyers and sellers (Glaeser&Kohlhase, 2003).