Introduction
Before the 1984-1985 National Basketball Association (NBA) season, teams were given the freedom to pay athletes whatever wages they found fit. Athlete’s and their agents had to agree to the terms of the contract, but there was no limit on the amount of money that owners and their front office personnel could spend on the team payroll. That was quickly about to change as numerous franchises suffered serious financial losses and the threat of them folding became ever more inevitable. During the Collective Bargaining (CBA) talks before the 1983 season, the owners and representatives from the National Basketball Player’s Association (NBPA) agreed to introduce a salary cap, starting in the 1984-1985 season. With this historic agreement,
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The argument stems from the belief that there are transaction costs when players leave their original team, whether by free agency or trade, because talent is being transferred from one team to another. The real problem is when team revenues are considered. Some players are more marketable than others because of their playing style, personality, background, or family. They can, in theory, gain more revenue through merchandise sales and gate receipts, but it has been proven empirically that winning percentage is by far what attracts fans and has the greatest impact on revenue. However, the basic principle still stands. Given the competitive market of professional sports, owners and front office personnel are seeking an optimal distribution of talent, and, in trades, are after the most mutually beneficial outcome. If they weren’t, why would trades be made? One major issue is that every team values players and their skills differently. In the NBA, for example, teams that are in a “rebuilding” phase value draft picks higher than veteran players, while contenders value the veteran’s skills and leadership more than their draft picks. If a trade were made between the two, both would walk away with a favorable outcome. It will take time to determine if the trade was indeed efficient and mutually beneficial, but throughout …show more content…
This is evidenced by the finishing order of leagues, MLB, NHL, NFL, and NBA. The NBA was by far the most unbalanced further leading to the conclusion that their more regulated salary cap is not the answer to promoting competitive balance. Unfortunately, competitive balance is not that
Prior to 1966 African Americans were not allowed to play basketball with Caucasians. That all changed when six African American men, led by coach Don Haskins of Texas Western College, played in the March, 1966 NCAA championship and won. I believe that Don Haskins created significant change for African Americans and college basketball.
Anyone who has been involved in an organized sport, whether it is backyard football or a high school sports team, knows that these sports all have organizations that are responsible for setting rules, determining conditions of play, and penalizing individuals who infringe the rules. Some of the organizations like the National Football league and the MLB are familiar to most people, the rules they follow are not generally understood by anyone who is not closely associated with the sport. Most fans and sport critics assume that what is happening inside these organizations are of little concern to them. However, this is not the case. In the MLB, the New York Yankees spend an excessive amount of money every year to obtain big name players. A luxury tax was put into effect for teams that go over the spending limit. However, the Yankees are the only team that pays the tax because they are the only team that exceeds the spending limit. The players, coaches, fans, and I have argued that a salary cap would be the best possible way to allow teams in the Major Leagues an equal opportunity getting to the World Series.
Overall, compelling points exist supporting or not supporting a salary cap in baseball. Teams have the benefit of a salary cap existing, and out of that, a balance in free agency forms and a sense of championship parity develops too. On the other side of the spectrum, teams can use the Moneyball method of recruiting and signing players, along with tax implications and revenue sharing to balance out payrolls. The main factor in deciding if a salary cap is appropriate is the factor of fairness among the teams. Therefore, based off the support the research provides, the implementation of a salary cap is necessary.
Labor market theory is one of the most integral economic theories needed to dissect the inefficiencies in professional sports. Looking first at the type of market these leagues function in, one can see that they do not necessarily meet all the criteria that a competitive market requires. The big four sports leagues in the US have a set number of teams which creates barriers for entry. Only when an expansion is agreed upon by the league, such as NHL has done for the upcoming season, are teams allowed to enter, and even then, it is limited to a maximum of a few teams in recent history. Additionally, the league makes it virtually impossible to exit, as selling of a team is the closest they come to exiting the market. Through
A salary cap gives all the teams an equal chance to sign players. It also keeps teams with a lot of money not able to acquire every all-star they want , or any player who is a free agent. Some Major League Baseball teams like the Anahiem Angels and the Atlanta Braves are owned by very wealthy people and companies. The Anaheim Angels are owned by Disney.(Worisnop, 128) So with no surprise the Angels can produce a team which can be very competitive, and have several all-star players. Just recently they exercised this advantage by signing Mo Vaughn for ninety million dollars over seven years.(Antonen, 2) There were at least four other teams that wanted to sign this all-star, but the Angels easily had the money, and outbid everyone who wanted to sign him. If there was a salary cap in Major League Baseball then the Angels would have thought twice about giving that much money to one player. With the its roster for one year. So giving one player 12.8 million dollars for one year does not really make sense if the salary cap is fifty million dollars a year. That would leave only 37.2 million dollars for the twenty-four other players, which equals each player getting on average a little less than one and a half million dollars a year.
...salary cap will provide an answer for some of the most serious problems facing the NBA. It will lower ticket prices, allow more teams to be more competitive and eliminate the any future lockouts. If these problems can be fixed by enforcing a hard salary cap, I don't see why it shouldn't be done. The NBA should enforce a hard salary cap.
So everybody would get paid fair. While others may say or wrecks family history because if you have generations and generations go to one college than they started to get paid it might wreck that history because they will pick the highest paying one. That is not true though because if salary caps were put in everybody would get paid the same. In summary college athletes should be paid because they are too busy to have a job, the NCAA has enough money and they can put in salary caps so everybody get paid
The problem with this is the inflation of players' salaries. When players are drafted young, they demand to be paid what they want; teams pay them millions right out of college.
Should UEFA follow the example of NHL establishing an analog of ‘Salary Cap” for European football clubs.
Do you think professional athletes are overpaid? You might think they earn more than what they are worth for playing half a year, but athletes have many things which contribute to their salary. Some of these things include their earnings from endorsements, ticket sales, performance, merchandise, their social contributions, and TV ratings. Although there are many factors that contribute to their salary, professional athletes may be overpaid because as a society, we contribute to their success. So, in the end, part of the athlete’s salary comes from the people who support the sports in the first place.
1. What is the difference between a Nature of the business The National Basketball Association (NBA) is a professional basketball league located in the United States. It is composed of 30 franchised teams, all of which are in the US except for one located in Canada. It markets teams and players, and regulates franchised team ownership.
Poplawski, Wade, and Michael O'hara. 2014. The Feasibility of Potential NHL Markets under the New Collective Bargaining Agreement. Journal of Sports Economics. (1): 64-77.
In 1970, a hotdog costs fifty cents, a pop costs one dollar, a ticket to a NFL game costs fifteen dollars and the average football player made between nine and ten thousand dollars. Jump ahead almost 40 years and a hotdog that cost 25 cents now costs on average five dollars and fifty cents, a pop costs six dollars, a ticket to an NFL game costs 100 dollars and the average player gets paid over two million dollars! Times have changed. Because of all of those price changes, and insignificantly the salary of players, in 1994 the National Football League introduced the first salary cap that allowed owners to spend a certain amount of money on players. The Players Union and the National Football League did this because for one, they were tired of players getting thrown from club to club just being a price and two to make things more equal between the teams. Today, money and fame have made players and owners very greedy and cocky people. Players ask for negotiations when they are making well over a million dollars a year and there are people in the United States that are homeless? That it the biggest reason that the salary cap needs to stay in effect. If the salary cap goes out the window, just like it did this past season, a sports fan can kiss NFL goodbye in ten years from now because there will not be enough money to pay all of the players. There should be a salary cap in the National Football League because it allows organizations to be equal and have a better chance of competing with each other and it may put players in their shoes so they know they can’t have everything they want.
In research found by Kahn (1991) revealed Jones and Walsh’s reasoning for stating, that French-Canadians had a salary gap as soon as they played for someone outside of Quebec. Many French-Canadians at the time didn’t have many fans to boost sales. In the NFL whites received a 4% greater salary than those of blacks (Kern, 2000, pg. 124-125). The sport that saw the most salary discrimination was basketball during the 1980s and 1990s (Kern, 2000, pg. 122-123). As Kahn (1991) states, “in a survey of the literature, found that the wage gap in basketball is between 11% and 25% against black players.” “The NBA...Earning” (1999) explains, “A white player of comparable ability to a black player receives an income in excess of the black income by an amount equal to the effect that their race has on the attendance decisions of fans.” Blacks were paid between $13,000-$16,000 less than those of whites (Kern, 2000, pg.121-125). At the end of a black player's career they will earn $329,000 less than those of white basketball players (“The NBA...Earning”, 1999). Over the years baseball and football haven’t seen much salary discrimination (Kahn, 1991; Kern, 2000, pg. 122). In basketball Hamilton; Bodvarsson and Brastow, have seen salary discrimination decreasing significantly (Price 2010). As of recent years blacks are the highest-paid athletes in the U.S. (Kahn, 1991, pg.395).
...ecks and be treated as a farm system for the NFL, NBA, or MLB. If these athletes started getting paid now, at the college level, then the major leagues of these sports would suffer tremendously and lose marketability and money. A final solution to not having players get paid or receive certain benefits is maybe these head coaches of certain universities should not be getting the average 2 million dollars a year to be a coach, in some cases more than the presidents of these universities.(Chicago Tribune) There could be major strides made by simply merging that athletes shouldn’t get paid in whole dollars, but should receive paid benefits in which they would not have to worry about starving, losing scholarships due to injury or sub-par play. That I think would make the world for college athletes a better place, where both the schools benefit and the players benefit.