What the business research says

Seven sources address the same question The Mallory Group's four sports studies asked: does paying for outside talent deliver the expected performance? Six are peer-reviewed academic research and one is industry research. This page presents each source, what it found, and how it maps to the sports findings.

The honest answer the synthesis returns: paying for outside talent works sometimes. It depends on what asset you are paying for and whether that asset actually transfers.

How the business research is organized

Each source below has four parts:

The citation and link to the original.
What the source found, stated as the source states it.
How the finding maps to the four TMG sports studies.
An honest read on how strong the mapping is.

The sources are grouped into three sections: four that explain why paying for outside talent often fails, two that explain when talent does transfer, and one industry source that adds practitioner-side numbers.

Why paying for outside talent often fails

Groysberg (2010): star portability

Chasing Stars: The Myth of Talent and the Portability of Performance. Princeton University Press.

What he found, from a study of more than 1,000 star Wall Street analysts at 78 investment banks:

Star analysts who switched firms suffered an immediate and lasting decline in performance.
The decline depended on firm-specific resources, organizational cultures, networks, and colleagues.
Three groups of stars retained their performance: those who moved with their teams, those who moved to firms with higher capabilities and resources (measured through Institutional Investor rankings), and female stars.
Analysts who moved to firms with similar capabilities saw less decline than the overall average. Analysts who moved to firms with lower capabilities saw the largest decline.
The original firm matters too. Analysts from firms that promoted portability (Credit Suisse First Boston, Salomon Brothers) suffered less decline than analysts from firms that built soft non-portability (Goldman Sachs, Merrill Lynch).
The author extends the framework to other occupations, including general managers and football players.

How it maps to the sports research. Two TMG studies confirm Groysberg's framework at the player level. The NBA study found that players who changed teams declined more than players who stayed, even when age and prior performance were accounted for. The NHL Play for Contract study found that same-team contracts deliver more time on ice per dollar of cap share than new-team contracts (the loyalty discount, with a tier-controlled coefficient of +0.70 minutes per game-equivalent at p < 0.0001). Groysberg gives the mechanism. Performance depends on context. System fit, role, teammates, and coaching are the sports version of "firm-specific resources, networks, and colleagues."

Strength of mapping: strong. Groysberg himself extends his framework to athletes. The mechanism is the same in both settings, and two independent TMG sports studies now confirm the pattern.

Bidwell (2011): the external hire premium

Paying more to get less: The effects of external hiring versus internal mobility. Administrative Science Quarterly, 56(3), 369-407.

What he found:

External hires were paid around 18 percent more than internal promotions into the same jobs, while also having higher levels of experience and education.
External hires received significantly lower performance evaluations during their first two years.
External hires had higher exit rates, both voluntary and involuntary.
External hires who survived past two years were promoted faster than internal hires.

How it maps to the sports research. The TMG sports findings show the same pattern at both the team and player level. The NHL Free Agency Research found that offseason UFA spending does not predict next-season performance change after controlling for prior season. The NFL Analysis found that the team that spent the most in free agency rarely produced the biggest win gain. The NHL Play for Contract study found that same-team contracts deliver more time on ice per cap share than new-team contracts. In each case the buyer pays the premium and gets less per dollar than alternative paths produce.

Strength of mapping: strong. The unit of analysis differs across the four studies (team level versus individual job level versus contract level), but the buyer-side dynamic is consistent across all of them.

Roll (1986): the hubris hypothesis

The hubris hypothesis of corporate takeovers. Journal of Business, 59(2), 197-216.

What he found:

Acquirer cumulative abnormal returns around announcement dates are at best zero, and often negative.
Bidding firms infected by hubris pay too much for their targets.
The hubris hypothesis fits the evidence at least as well as alternatives such as taxes, synergy, or inefficient target management.

How it maps to the sports research. Roll does not predict the same outcome as the TMG sports studies. He explains the buyer behavior that produces those outcomes. Front offices keep paying premiums for free agents even after seeing teams that did the same fail to improve. Roll's finding is that this is a recurring buyer-side failure mode in corporate acquisitions. The mechanism is overconfidence in one's own valuation.

Strength of mapping: mechanism-level rather than outcome-level. Roll explains why teams keep doing the thing that does not work, across all four TMG sports studies.

Boivie, Gee, Gentry, and Graffin (2025): experience does not correct hiring mistakes

Do boards learn to hire? The effect of board experience with CEO replacement on CEO performance. Strategic Management Journal, 46(10), 2467-2491.

What they found, from a study of S&P 1500 firms from 1999 to 2020:

Boards' prior experiences with hiring CEOs do not improve their ability to choose a higher-performing CEO.
Prior CEO selection experience has a small but consistent negative effect on subsequently hired CEO performance.
Little evidence that the domain specificity of prior CEO succession experience changes the result.
The authors interpret the pattern as suggestive of superstitious learning by directors.

How it maps to the sports research. Roll's hubris hypothesis explains the initial buyer-side failure. Boivie and colleagues extend the mechanism in a sharper direction: experience does not correct it. Boards with more CEO-hiring experience produce slightly worse selections, not better. The implication for the TMG sports findings is direct. Front offices hire repeatedly. They have years of free agency experience. If experienced corporate boards do not learn from CEO hiring outcomes, the burden of proof on front offices to learn from free agency outcomes is high.

Strength of mapping: strong on the mechanism. The TMG sports studies are at the team level rather than the individual hire level, so the unit of analysis differs. The convergence is on the persistence of buyer-side errors over time and across decision-makers.

When talent does transfer

Berry-Stolzle and Eckles (2019): insurance salespeople and the book of business

It is about building a book of business: incentives of insurance salespersons from future renewals. Geneva Papers on Risk and Insurance, 44(4), 702-731.

What they found, from a study of property-liability insurance salespeople:

The average policy renewal rate is 89 percent.
A strong positive relationship exists between the fraction of renewals and salesperson output.
A strong positive relationship exists between output and salesperson compensation.
These results hold regardless of compensation structure (salary, commission, or mixed).
Findings support the view that insurance salespeople have strong incentives to build a book of business.

How it maps to the sports research. This is the counterpoint, not a parallel. The TMG sports findings show that team and player context does not transfer well. Berry-Stolzle and Eckles show that when the value-creating asset is portable (the book of business), the salesperson can carry it. The sports finding is about contextual performance. The insurance finding is about portable revenue. Together they bracket the question.

Strength of mapping: solid as counterpoint. Different domains (recurring revenue versus athletic performance) but the underlying principle holds. What transfers depends on what you own.

Gurun, Stoffman, and Yonker (2021): financial advisor mobility

Unlocking clients: The importance of relationships in the financial advisory industry. Journal of Financial Economics, 141(3).

What they found, using the 2004 creation of the Protocol for Broker Recruiting (commonly called the Broker Protocol) as exogenous variation across more than 760,000 advisors and $28 trillion in assets:

About 40 percent of client assets follow advisors when they move between firms.
The ability to maintain client relationships is a significant predictor of advisor employment decisions.
Once clients are unlocked via the Broker Protocol, firms become less willing to fire advisors for misconduct.
Firms that unlock their clients see higher levels of misconduct and increase their fees.

How it maps to the sports research. Like the insurance finding, this is a portability case. Financial advisors carry roughly 40 percent of their book with them on a move. This is meaningful transfer, but it is not full transfer. Compare to Groysberg's analysts (almost no transfer) and Berry-Stolzle's insurance salespeople (high transfer through 89 percent renewals). Financial advisors sit in the middle of the portability spectrum, near where NHL, NBA, and NFL athletes likely sit based on the TMG findings.

Strength of mapping: solid. The 40 percent number is specifically about asset transfer, not about post-move performance. The mapping is on the portability axis, not on the performance axis. Worth flagging in the audit.

Practitioner research

Cerulli Associates (2021, 2025): advisor transition costs

For Advisors, the Costs of Switching May Outweigh the Benefits (Cerulli, 2021). Industry research.

What Cerulli reports:

Advisors who switch broker-dealers lose approximately 22 percent of assets during transition.
Advisors who move to an independent model lose approximately 18 percent.
Operational challenges, learning new technology systems, and lost revenue during transition are the top reported difficulties.

How it maps to the sports research. Cerulli reports an asset loss number during advisor transitions. The 22 percent loss figure does not tell us where those assets went. They could have stayed with the original firm under a new advisor, moved elsewhere, gone independent through the client, or remained unaccounted for. The number is included here for practitioner context. It corroborates the broader finding that transitions are costly without serving as direct evidence on portability per se.

Strength of mapping: weaker than the peer-reviewed sources. Industry research, proprietary methodology, not peer-reviewed. Useful as practitioner reference, not as a primary anchor for the synthesis.

What the seven sources synthesize to

Three claims hold across the sources:

The buyer side of the talent market consistently overpays, and experience does not correct it. Bidwell shows the cost-vs-output gap directly in external hiring. Roll explains the initial mechanism through hubris in valuation. Boivie, Gee, Gentry, and Graffin show that boards with more CEO-hiring experience produce slightly worse selections, not better. The TMG sports findings show the same buyer-side pattern across the NHL, NBA, NFL, and NHL Play for Contract studies.
Star performance is contextual more often than it is portable. Groysberg documents this in equity research. Two TMG studies show the same pattern in sports: the NBA finding that players who change teams decline more than players who stay, and the NHL Play for Contract finding that same-team contracts deliver more time on ice per cap share than new-team contracts.
Transfer happens when the asset is portable. Insurance books and client relationships travel partially or fully. The conditions Groysberg identified (moving with a team, moving to firms with higher capabilities) are the closest sports analogues. A player whose system fit is the source of value will not transfer it. A player whose individual skill is the source of value will transfer more of it.

The sports findings and the business research are pointing the same direction. That convergence is the synthesis.

Footnote-only citation

One additional peer-reviewed source is cited in the implications page but does not carry analytical weight on the central question of portability.

Bertrand and Mullainathan (2001) found that CEO pay responds to luck (industry and market shocks outside the CEO's control) as much as it responds to skill, and that this is worse in poorly governed firms. The finding is relevant background for the broader claim that talent markets do not cleanly distinguish skill from luck, but it does not directly explain portability. See the citations annex for the full entry.

Where to go next

Back to welcome.
Key Findings: Plain-language summary of the four TMG sports studies and the business research synthesis.
Implications: What this means for hiring, managing stars, and structuring work.
Citations: Full bibliography with links to every source.
Audit: What this synthesis can and cannot claim, and verify any claim yourself.