Distributing the Surplus

To agree with Scott Lemieux it’s important to understand that whatever good arguments there may be for salary caps in professional sports, the “populist” line of argument that rails against the evils of athletes earning windfalls in a world of injustice makes the least sense. Successful sports franchises generate a ton of revenue since a lot of fans are interested in them. That revenue will inevitably wind up getting split up between the owners of teams and their various employees. Artificially limiting the salaries available to one sub-set of employees — the players — simply means more of the money will wind up in the hands of the owners and the coaches.

Meanwhile, the level of competitive balance in a given sport is generally determined by factors other than the presence or absence of a salary cap. As it happens, uncapped sports like Major League Baseball and many European soccer leagues have more balance than does the NBA or the NFL. Which isn’t because caps cause imbalance, but rather seems to relate to intrinsic features of the spots. Basketball leagues are relatively unbalanced everywhere you look.