Power Point Presentation
Rev1994
good_example_of_a_powerpoint_presentation.pptShould there be a salary cap in professional sports?
Salary Cap
A limit on the amount of money that a team can spend on player salaries.
Goals of a salary cap
Limit overall spending to make sure one team is not dominant every year.
Types of salary caps
- Hard caps
- Soft caps
Sports with salary caps
- NHL
- NFL
- NBA
- MLS
Sports without a salary cap
MLB
National Hockey League
- Hard cap
- 2008 salary cap
- Salary Floor
NHL Continued…
- Guaranteed player contracts
- League Revenues
National Football League
- Hard Cap
- Salary Floor
Success of 2007-2008 Salary cap
Major League Soccer
- Hard/soft cap
- League owned contracts
- Designated player rule (Beckham rule)
Grandfather clause through 2008
Problems with MLS cap
National Basketball Association
- Soft cap
- Cap Floor
NBA Exceptions:
- Exceeding the salary cap
- “Larry Bird Rule”
Major League Baseball
- No salary cap
- Threshold
- 2007 Revenue
- Average salary
- Minimum salary
Revenue Sharing
Problems with revenue sharing
Salary Cap: CONS
- Player Movement
- Loss of players
- Owner profit
- Unfair to players
- Ticket sales
- Unfair to large markets
- No Guarantee
"An effective salary cap is too Draconian and unreasonable. If you're going to use a cap to drive down player salaries, you're just padding owners' pockets."
— Andrew Zimbalist, an economist who has consulted player unions.
Salary Cap: PROS
- Ticket Prices
- Competitive Balance
- Slow down salary growth
- Prevents “dynasties”
- Back to the basics
Evidence
- Cap Works
- Salary Cap does not necessarily work
Evidence
- Cap is needed
- Cap is not needed
My Opinion
- A salary cap is not the answer.
Solutions
- Salary floor
- Revenue Sharing
- Relegation and promotion
- Terminate teams
Questions?
