Salary Cap History

Salary caps are a very important tool used in professional sports. All 4 major professional sports leagues in the United States have a salary cap installed into their collective bargaining agreement between the league and its players. Those four major sports are, the NFL, the NBA, the MLB and the NHL. A salary cap is defined as s an agreement or rule that places a limit on the amount of money that a team can spend on players' salaries. It can be as a per-player limit or a total limit for the team's roster. It is basically put in place to help the small market teams stay competitive. It is meant so the wealthy teams, also called big market teams, does not always stay dominant by signing the best players to very big contracts. Salary caps are

Boom or bust, pro-athlete salaries have soared over the past decades. In the 1920’s, professional athletes were paid a few hundred dollars per game and held off season jobs. In the 1950’s, this changed as television was introduced and broadcasting rights increased player salaries. Now even with salary caps being put into place for some sports, salaries have far outpaced inflation. For instance, the MLB average salary has increased from about $300,000 to 3.2 million since 1985.

The National Football League (NFL) is an example of the incredibly successful industry generated by the sport. This business has been, and continues to be, the highest earning sports league in the United States. Average revenue that a franchise earns in the NFL is 286 million dollars, with the closest industry trailing behind being Major League Baseball (MLB) averaging almost 50 million dollars less (Gaines). Another aspect to observe with this comparison is putting in proportion how much more is made per game since football has significantly fewer games. The NFL creates its leading revenue in only a 16 game regular season, whereas the MLB falls short after playing 162 entire games. Putting this into perspective, an NFL team generates an average 17.8 million dollars a game, but an MLB team generates only 1.4 million dollars a game. Revenue

Teams with large payrolls routinely win at a higher rate than teams who cannot afford to spend the massive amounts of money other teams do. For example, in the last fifteen years the New York Yankees and Los Angeles Dodgers, two teams which regularly are among the highest spending teams in baseball, won on average 94.7 and 86.8 games respectively. By comparison, the San Diego Padres and the Kansas City Royals, two teams who are not able to compete financially with teams with deeper pockets, won an average of 77.1 and 71.6 games respectively in that same time span (Major League Baseball). This disparity in season wins is a direct cause of Major League Baseball’s lack of a salary cap. Over the course of a 162 game season, teams with higher payrolls, and therefore better talent on their roster, will prevail more often than

There is a dearth of empirical literature regarding the topic of NBA player salary determinants. Whereas there have been some articles written on NBA player salary discrimination, the lack of empirical evidence as it relates to player performance and its impact on player salary have been virtually non-existent. This investigation serves to contribute to the paucity of empirical literature regarding NBA player salaries. Wage fund theory was chosen to guide this study. According to this theory, wages are determined by the amount of capital available to pay workers. As capital increases so do worker raises. This theory has a direct correlation to the NBA salary cap. The salary cap is comprised of Basketball Related Income (BRI) which consists of revenue generated from ticket sales, national and local broadcast deals, in

Forbes says “If payment begins and there is no cap, the bidding war among colleges for some players will be hard to control. Are people ready for the few colleges with the financial resources (which would be ten to twenty schools) getting virtually all the best football and basket players? (Forbes) With pay to the coming to the student the want and drive to play in the NFL. There would not be any incentive to play in the professional league, when they are making good money in the college level. College is an amateur sport and should be treated that that way and not glorify the students athletes.

Anyone who has been involved in an organized sport, whether it is backyard football or a high school sports team, knows that these sports all have organizations that are responsible for setting rules, determining conditions of play, and penalizing individuals who infringe the rules. Some of the organizations like the National Football league and the MLB are familiar to most people, the rules they follow are not generally understood by anyone who is not closely associated with the sport. Most fans and sport critics assume that what is happening inside these organizations are of little concern to them. However, this is not the case. In the MLB, the New York Yankees spend an excessive amount of money every year to obtain big name players. A

Twenty-five million dollars made per year. Over one hundred fifty-four thousand dollars made per game. Over forty-seven thousand dollars earned per at bat. Sounds a little ridiculous, does it not? That is what current Texas Ranger shortstop Alex Rodriguez earns to play the game of baseball (azcentral.com). Baseball is a game that children have been playing in schoolyards and fields for the past one hundred years. It may not be a game anymore. On the Major League level it has become a business. This is where the problem starts.

While growing up in the state of Texas I was introduced to National Football League (NFL) at a very young age. Not only was I obsessed with great players like Emmitt Smith and Michael Irving, I had a more finical appreciation for the lucrativeness associated with the NFL. My young adulthood as well as my teenage years was spent playing and learning football with the aspirations of hopefully making it to the NFL. Unfortunately, my playing days ended with tryouts at Texas Tech University, but my love for the game has remained stagnant over the years even till this day. The NFL today is Americas most watched sports league and has taken the crown as the most lucrative and unique economic force in sports. Forbes offered approximations stating that on average, the NFL generates more than $6-9 billion a year in revenues alone. A third of the individual franchises in the league were appraised at over more than $1 billion while the other franchises average nine figures or higher. The NFL as an organization generates its revenues through a multitude of ways ranging from huge television contracts, in-stadium ticket sales, advertising ads paid for by sponsors and merchandise. Their business model unlike most other leagues, is centered on a hard salary cap on player contracts which provides cost certainty with its sponsors. In this paper, I will examine the economic and historical narrative associated with the growth of the NFL’s

They merely raise the ticket prices a few dollars and make twice the amount of the athletes.

"The biggest problem is the owners that are willing to pay these astronomical salaries. Until the owners all get together and agree something will never happen." (Zook) There are wealthy owners that can just go out and buy a winning team. The Yankees will always be in contention year after year as long as George Steinbrenner is the owner. He has the money to have a yearly team payroll of around $115 million. So being a rich owner in theory gives your team a better chance on winning in the Major Leagues.

Salary Cap will also affect motivation of the players if they do not get what satisfy them. They will be majorly playing towards maximizing their wealth rather than wining and keeping the spirit of the game alive.

Whether it be baseball, football, soccer, or basketball, sports are appreciated not only in America, but all over the world. One of these sports that is particularly popular in America is Football. The immense crowds of people who sit at a stadium or on the couch to watch a game never fail to recognize every single play on the field; however, many fans pay little to no attention to one of the most important components of the game, the player-association relationship. When signing a contract with an NFL team an NFL player is effectively dedicating his life to his new organization. His duty is to play for his team in order to make the organization money, and money they make. In the NFL last year “each team received $226.4 million” (Brady 1).

The value of entertainment in our society is arguable. We as a society constantly search for new ways to entertain ourselves; professional sports are a major contribution to our source of entertainment. If those who support athletes and their sports have no problem paying to see them,

The passages present a discussion about arguments concerning whether or not professional athletes are overpaid. This is an important debate since professional sports represents a multi-billion-dollar-per-year industry. The two positions argue whether or not professional athletes should be paid the large yearly salaries they are paid. Both viewpoints have valid claims warranting consideration. For example, evidence suggests that people with far more important jobs are paid much less than professional athletes; in contrast, opposing evidence suggests that since professional athletes generally have short careers and must train very hard to build and maintain their skills, the higher salary is justified. While both sides of the issue have valid points, the viewpoint that professional athletes are not overpaid is the best-supported position, the position supported by the preponderance of the evidence cited in the passages. The strongest and best reasons supporting this position are that professional athletes must endure grueling and intensive training, they generally have short careers that often end in injury, and the amount that they are thought to be paid is often inflated. Accordingly, these reasons and opposing viewpoints will be discussed next.