Do you think salary caps make professional sports more competitive?
Would you advise instituting this policy in a league that currently does not have an upper limit on wages?
How do you reconcile competition with a club's freedom to invest in accordance with their means?
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Higher revenues for everybody?
Salary caps prevent firms with the resources to spend above the constraint from earning higher revenue and players from earning higher revenue.
Regulus: Higher revenues for everybody? Salary caps prevent firms with the resources to spend above the constraint from earning higher revenue and players from earning higher revenue.
Every salaried employee has a salary cap in every business, it just isn't advertised like it is in sports. The only way they wouldn't is if they were involved in some type of profit sharing. A business can only pay an employee so much until the business decides the employee is no longer worth it. This works in all co-ops or franchises as well. There is nothing remotley immoral, contradictory, or evil about it, it may be ineffeciant or less profitable but that is up for a debate I don't care about, and I think is outside of the original intent of this post
On a side note, an athlete can easily establish himself as his own "product" or "brand" by doing outside endorsments/ training videos/ whatever.
you are failing to recognize my point that some firms want to pay more than the limit imposed by the salary cap
for example, teams residing in bigger markets like (London, New York, etc. etc.)
surely, we can't expect homogeneous revenue streams for each of the teams in a particular league
a salary cap prevents the financially better off businesses from assembling the best team possible
Regulus:a salary cap prevents the financially better off businesses from assembling the best team possible
Thats the point of it... the league wants the teams to be competitive. The teams agree to this when they join the league. What is the problem here?
I have no experience of sports like baseball, soccer, basketball and so but I have lots of experience in motorsports.
You may be shocked to learn that the ones constantly pressuring for cost-cutting measures and more restrictive rules are the biggest players in the field, the factory-backed teams and the ones with budgets four to five teams the privateers'. To cut a very long story short they know very well what they are doing, they know that performance improvements with tighter rules tend to become unbelievably expensive and hence will consolidate their dominance and they know that teams "thinking outside the box" will be penalized and perhaps forced to retire. You are a smart lot so I don't need to tell you that sports is simply politics wearing a more attractive apparel.