Salary Caps In Professional Sports

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.

Are professional athletes overpaid? This topic has been argued for some time now. It is said that pro athletes are paid way too much money for playing a sport. On the other side, there are the ones that say that the money is fairly deserved because of their hard work to get to where they are. Should pro athletes ' salaries drop or stay as is? Do the top athletes deserve their pay?

A salary cap is designed to keep player salaries from increasing at the rate they were at the time. The salary cap is basically a set amount of money that each of the NFL's 32 teams is allowed to spend on player salaries for any given year. Since salaries have continued to grow at a rate outpacing the salary cap, teams have found ways to get around the cap. One way is signing bonuses, which don't count toward a team's cap for a given year. A player who receives a signing bonus gets more money for that year than his recorded salary, this way it leaves more room in the cap for the other players. The advantage for the player is that all signing bonus money is guaranteed to be paid, whereas an NFL contract is not guaranteed. All players receive a minimum base salary. The base salary is the value according to his contract. The cap value represents the player's calculated signing bonus, plus salary and other bonuses for the season.

He states, "This is not about stupidity, it is about what is fair in baseball, and what is not. It is about the overall appeal of the national pastime. It is about caring, interest, and most of all, competition. Right now, there is very little of any of these components outside of the 212 area code." Most importantly, he explains why baseball needs a salary cap by saying "it is the only way to put constraints on what the Yankees are doing and to return the sport to the interesting and suspenseful form of sporting entertainment it once used to be." The Yankees are at an unfair advantage all across the league, and nobody, not Atlanta, Boston, Baltimore, Cleveland, or perhaps even Los Angeles, can acquire talent the way they can. The only way to prevent them from doing so is to put a cap on how much they can pay their entire team.

There are five major sports leagues in the United States; Major League Baseball, Major League Soccer, the National Basketball Association (which has what is known as a “soft salary cap), the National Football League, and the National Hockey League. Of these five, only baseball lacks what is known as a salary cap. A salary cap is the upper limit of the combined salaries for a team’s players. In the other four sports I mentioned, having to work within the boundaries of a salary cap is a balancing act, to gain an advantage at one position requires you to be at a disadvantage at another position. For example, to have a top tier quarterback in the NFL like Tom Brady or Aaron Rodgers and the large salary they command, a team might lack the funds to sign a top tier linebacker or cornerback. With Major League Baseball lacking a salary cap, this balancing act vanishes and teams could sign anyone and everyone they wished. This causes a competitive imbalance that is hurting the sport. Too often we see the same teams making the playoffs and winning championships like the San

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.

The collective bargaining agreements reached in professional sports are not industrywide. Rather, there is a separate one for baseball, football, etc. This makes bargaining in sports unique from other unions. Also, the clubs bargain as a group with unions over certain aspects of wages, hours and working conditions. However, the most important issue, individual salary, is negotiated between the club and player.

The four major professional sports in America are MLB, NBA, NFL, and NHL. Out of those four, only Major League Baseball does not have a salary cap. A salary cap keeps players salaries from getting to high because of the need to get your whole team under a certain dollar amount set by the league.

The NBA lockout that was experienced in 2011 was the fourth lockout to have been experienced in the history of NBA. The lock out began on expiring of the collective bargaining agreement that had been made in 2006. The lockout lasted one hundred and sixty one days (CACCIOLA, 2011). The crucial issues that brought about the lockout that resulted from the disagreement of owners and players represented by National Basketball Players Association were the salary cap structure, the luxury tax and the way revenue was to be divided. When the lockout took place there was no trading by teams, no new signings and absolutely no contact with the players. After consecutive meetings, there was an agreement reached and a tentative deal made which was later ratified.

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.

In Major League Baseball the general belief is that the more a team spends on their payroll the more games they will win. With the absence of a salary cap baseball may seam unfair to the smaller market teams who can't bare the salary costs that the larger market teams can. In Michael Lewis' Moneyball: The Art of Winning an Unfair Game Lewis depicts just how the Oakland Athletics have been winning in an unfair game for almost a decade. The A's are a small market team that doesn't have nearly the amount of money at their disposal that their competitors in the American League do. However this past season the A's won their fourth American League West championship in the last seven years while having the lowest payroll in their division. In

The second and largest aspect of the White Settlement involves the salary cap. The cap represents a specific amount of money which can be spent on player salaries will be a defined percentage of the defined gross revenues (Mavris). This will create competitive balance across the league because it will force all teams to abide by the same cap ceiling. Regardless of a teams value or demographic all teams will have to spend the same amount on player salaries.

In each of the major sports leagues (NFL, MLB, NHL, NBA), free agency is usually a period of big spending, crazy contracts and fresh looks to some teams. With the drastic rise in the salary cap, NBA free agency has been no different this summer. The contracts NBA players have received, compared to those given to some of the star players in other major sports, have been amazing.

If I could pay someone $25 million a year to get him/her on my team and generate $30 million, why not hire that player? The salary cap for the NFL is $102.5 million per team, and we currently have 32 teams, so we the public are paying 3.28 billion to those teams. Currently America is in a 11 trillion dollar debt, if athletes could get paid $150,000/year then we could save 1 billion dollars a year. The monetary worth of athletes exceeds the value that any one individual is actually worth. League officials should be using salary caps, negotiations, and legal tactics. Athletes' salaries are in increasing problem for the economy of our modern world. Although the sports have their own equal distributions, the overwhelming salaries of the leagues' highest paid players have made the average of salaries higher and higher each year.