Salary cap

In sports, a salary cap is a limit on the amount of money a team can spend on player salaries, either as a per-player limit or a total limit for the team's roster (or both). Several sports leagues have made salary caps mandatory, both as a method of keeping overall costs down, and in order to balance the league so a wealthy team cannot become dominant simply by buying all the top players. Salary caps are often the major issue in negotiations between management and players' unions.

Criticisms of salary caps

Any criticism of a salary cap cannot simply ignore the importance of money to professional sports. One can argue that being able to spend more on player salaries is just as much of an unfair advantage as having an extra player on the field, and thus that money must be a consideration in the rules of the league.

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One of the most common criticisms of the salary cap is that it is simply a way for management to get an unfair advantage in labor negotiations with players. Most labor disputes engender a fair amount of media sympathy for the side of labor and the "working man," but professional sports generally do not receive the same understanding. The notion of millionaire athletes and billionaire owners arguing over contract clauses and percentage points strikes many as unseemly, and is perhaps best illustrated by NBA player Kenny Anderson's statement to the media during the 1999-2000 lockout: "I may have to sell a couple of my cars to make ends meet." Anderson later claimed to be joking, but his words were quickly pounced on by pundits and used to portray him, and pro athletes in general, as out of touch with the general public on financial issues.

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Owners have tried to avoid this perception by portraying a salary cap as necessary for competitive balance, but even this can be troublesome. In the case of the NHL lockout, the owners first tried to implement a hard salary cap while shying away from revenue sharing. This was viewed cynically as a attempt to benefit the wealthy teams since they would see a drop in player payrolls while getting to retain their significant revenue streams. A hard cap without revenue sharing would also need a lower-than-acceptable cap figure (to players) to suit the weaker teams. Based on the NFL model, a hard salary cap should be accompanied by extensive revenue sharing in order to create true competitive parity among teams.

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As already alluded to, often a team will have to let go of many of its players – frequently, veterans who have been with the club for a long time – in order to comply with the salary cap; this has led some observers to lament the fact that situations in which a player remained with the same team for his entire career have become far less common since the salary cap was implemented than before.

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Also, some have blamed changing fan attitudes for creating the perceived need for salary caps. Many decades ago, for example, in baseball it was considered a positive achievement for a team to finish in the first division, even if it did not qualify for post-season play; nowadays, by contrast, fans tend to lose interest in a team once it is out of playoff contention. However, many fans acknowledge that the lack of a salary cap has caused skyrocketing player salaries and that these increased costs are eventually passed on to rising ticket prices. Also, players are no longer the heroes that they once were in the eyes of fans; an increasing number of fans are blaming players for "greed" in trying to command the highest salaries possible with little regard for a team's competitiveness or financial health. A growing view among fans is that owners are no longer entirely at fault for overspending; the players bear the blame since they benefit from usurping such a system that encourages owners to spend freely.

Related Topics:
Baseball - First division

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Still other critics, such as talk radio host Rush Limbaugh, have even objected to the concept of the salary cap on libertarian grounds, expressing the opinion that there should be no artificial limit on what anyone is able to earn if they have the talent. However, this is countered by the all-too-frequent possibility of teams that sign a supposed superstar to a lucrative and guaranteed long-term contract, only to see him perform below expectations right after; overpaid and underperforming players perhaps contribute the most to escalating player salaries. It should be noted that in most interpretations of libertarian theory, a salary cap is perfectly acceptable as long as it is freely agreed to by both parties, and not coercively imposed from without.

Related Topics:
Talk radio - Rush Limbaugh - Libertarian

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The libertarian view also ignores the fact that sports leagues are premised upon competition that is more tightly regulated (by the rules of the sport) than almost any other occupation. Sports leagues are, in a sense, socialistic in nature. In order to survive, they must continue to draw new and existing fans by keeping the games interesting and unpredictable, and this requires guaranteeing every team a minimum degree of competitiveness, perhaps at the expense of the most successful teams.

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