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Salary Caps in Sports Essay

Salary caps are used in all pro sports and can impact any team. Caps are imposed limits on the money a team can spend on their players salaries. Salaries in pro sports are becoming out of control and reaching 100 million dollars. Teams are becoming unbalanced and are losing profits. Salary caps should be used in pro sports.

Did you know that Michael Vick now makes nearly 100 million dollars a year? He is even making this much after missing over two years of football and being thrown in jail for dog fighting. The average salary of a NFL player is about $770,000 yet the average salary for a teacher is about $42,000. Even after players make millions, they can make more from endorsing products. One former NFL player said, “Maybe athletes would try harder if they didn’t have such whooping salaries. Maybe salaries based more on performance would help,” Salary caps are already at very large sums. Salary caps help players earn decent amounts of money, but not too much, and should be used in all pro sports.

Teams in all sports are becoming unbalanced. Teams such as the Patriots(NFL) and Yankees(MLB) have become the more powerful teams because of their money. Yet teams such as the Buccaneers(NFL) and Padres(MLB) don’t have as much money and haven’t made the playoffs in years. Teams with the most money can offer the most money to a player and be more likely to get him . A pro sports consultant once said , “There is example after example of teams making the playoffs every year and teams just about never making them. When salary caps are put in place, teams become balanced and every team can have a good season,”

In every sport their is a team losing profits and barely making the salary floor, lowest amount to be spent on salaries. Teams lose money everyday due to the salaries of staff and players. When a team has a bad season they can lose fans, and wont get money for tickets, food, and souvenirs. If a team loses to many fans ticket prices can rise.

A NHL hockey player once said, “Generally I favor caps , especially when you see hockey could go out of business. But at the same time some of these salaries are overkill,” When salary caps are imposed, fans are less likely to leave a team.

Imagine this, players on pro teams don’t always try their hardest, but if caps are more on performance, players would have to earn it. Teams wouldn’t have to scrape for money and ticket prices would be so high. If salary caps are imposed teams could be more balanced. All teams could make a profit. Salary caps should be used in pro sports.

Increasing financial disparity and spiralling wages in European football have triggered a debate about the introduction of salary caps. This paper provides a theoretical model of a team sports leagues and studies the welfare effect of salary caps. It shows that salary caps will increase competitive balance and decrease overall salary payments within the league. The resulting effect on social welfare is counter-intuitive and depends on the preference of fans for aggregate talent and for competitive balance. If fans prefer competitive balance, on the other hand, any binding salary cap will reduce social welfare.


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