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In this paper, we are interested in the informational value of Major League Baseball (MLB) managerial compensation on a team’s performance. Using data on manager’s contracts, team performance, and team and manager characteristics, first, we determine the variables that influence a manager's salary. Then, we use a forecasting-type analysis to study the determinants of a manager’s performance, measured by winning percentage, attendance or playoff appearances. We find that a manager's past performance affects his current salary, but his current salary does not affect the team's performance. Our results support the lack of a competitive and efficient market for MLB managers.