Fair Play

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In modern professional sports, athletes are paid a wage that is determined by their potential economic impact on a team. For instance, a team will sign a player to a $10 million contract only if they believe that the player will have an economic impact of at least $10 million (Landsburg). Most professional sports leagues employ a system of free agency in which players are essentially auctioned off to the highest bidder. Usually, the team that is willing to pay the highest salary will be the team that acquires the player. There are some other variables involved in the signing process, which include contract length, clauses, incentives, and signing bonuses. The fact that athletes will play where they are offered the most money remains the underlying principle nonetheless. Most sports operate under some form of what is known as a salary cap, which sets a limit on the total amount of money that a team can spend on all of its combined player’s salaries. Essentially, it is not so much a cap on salary as much as it is a cap on payroll. Payroll is the total amount of money spent on salary (Keri). Of the four major sports league in America, three of them use a salary cap: the NFL, NBA, and NHL. The MLB currently employs a luxury tax system which taxes any team who spends over a set amount. However most teams never even come close to paying this tax, and since its inception in 2003 the New York Yankees have accounted for 92% of such tax payments (Brown). Lacking a true salary cap, baseball will cease to be America’s favorite pastime. Competitive imbalance leads to an imbalance in interest. Since 1995, 22 of the 30 teams in the MLB have reached the postseason five times or less. Eight of these 22 teams either reached the playoffs once or... ... middle of paper ... ...all’s Economics as Spring Training Approaches." SDNN.com. 11 Feb. 2010. Web. 15 Oct. 2010. Hoynes, Paul. "Hafner Will Sign Four-year, $57 Million Extension with Indians on Thursday." Cleveland.com. 11 July 2007. Web. 15 Oct. 2010. Keri, Jonah. "Does Baseball Need a Salary Cap?" Baseball Between the Numbers: Why Everything You Know About the Game Is Wrong. Basic, 2007. Print. Lewis, Michael M. Moneyball: The Art of Winning an Unfair Game. Norton, 2004. Print. Miles, Bruce. "On Soriano: Who's Carrying Whom Now?" Blogs.dailyherald.com. Daily Herald, 13 Oct. 2010. Web. 15 Oct. 2010. "Salaries Databases." Usatoday.com. 2007. Web. 15 Oct. 2010. Sheehan, Joe. "Don't Blame the Pirates, Blame MLB's Revenue-sharing System." Sportsillustrated.cnn.com. CNN, 25 Aug. 2010. Web. 15 Oct. 2010. "Sports Industry Overview." Plunkettresearch.com. 2010. Web. 15 Oct. 2010.
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