For those that follow the National Football League you may be aware that the league has an interesting way to dealing with the salary of their players. The story is that the two pronged attack of heavy revenue sharing and capping your costs (in the form of a hard salary cap) distributes talent to every team equally (in theory at least).
Economists are skeptical of the motives of the owners of the leagues. The correlation between payroll and winning is not quite as strong as many would expect with the exception of the extremes. So we hypothesize that it may be the owners attempt to keep costs down that is driving the cap issue. But leaving that issue alone right now the current news of salary being uncapped in 2010 is a subtle, yet very important potential structural change inside the NFL. The implications could be very interesting for the future of the NFL.
What appears to be happening is that the large market teams (Dallas, Washington, etc…) do not want to be a part of a heavy revenue sharing/hard salary cap system any longer (if you were always making more money would you want to always share it?). They appear to be getting in the way of an agreement between the owners that would result in the uncapped season. What follows is anyone’s guess, but keep in mind that the salary cap was a concession given up by the union in the collective bargaining agreement (CBA). So the question remains, if the owners give up something they fought so hard to attain in the first place, will the union be so kind as to give it back again? One possible outcome: The richer teams get the uncapped seasons followed by reduced revenue sharing that would allow the NFL to look more like Major League Baseball. A few large market teams would arise (I would put Eagles in that class) while a few smaller market teams would disappear, or move (perhaps teams like Green Bay moving to places with large populations and no teams like Los Angeles in order to collect more revenue). For football fans it is an issue worth monitoring.
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i think that if they remove the cap the nfl is going to become one sided i mean that the richest team will be able to get all the best plays and by that point football is going to be so boring to watch. having the cap gives each team an equal chance to get good players. witch makes for some great football
ReplyDeleteDan Boyette speaking
ReplyDeleteAgreed. for an even competition the teams have to prevent a similar situation as in MLB with the Yankees (who have enough money to attempt to buy the pennant each year). For football (and most sports) to remain competitive a salary cap is necessary
But is there much difference with bad teams in MLB (Pitt) vs the better teams (Yankees) compared to the NFL's consistent winners (NE and Pitt) vs the perennially bad teams (Detroit). There are small market teams that do well in Baseball (Minn, Oak, TB last year) and large market teams that do poorly (Mets). Maybe it has more to do with how well run the organizations are (if you are interested in this you should read Moneyball)
ReplyDeleteI'll be the first to admit that I don't really follow much sports so this topic is a bit of a challenge for me. However, rationally it seems that if there is no salary cap, the best, richest teams will continue to grow and be the best with the best players. This will then drive the little, struggling teams out of the league which doesn't really seem all that fair to me. Even someone like me who isn't a big sports fan knows that in order to have a good game, you need to have competition. The game that results in a score like 48-3 isn't fun to watch whereas the game that ended 48-45 in the last two minutes of the 4th quarter was the one everyone will be talking about the next day. It would seem to make sense for the future advertising revenue as well that they leave as much room for fair competition as possible.
ReplyDeleteA salary cap appears to keep the talent level somewhat equal. By removing the cap,I suspect the more money one team has, the better talent they can hire. That being said, I'm sure there are breakout "stars" in the less monied teams.
ReplyDeleteIn my opinion, the amount of money a team has should not have any influence on its chances of winning. Every team in the NFL should have a fair chance at winning any given year no matter its wealth. The only reason why certain teams in the NFL have a lot of money is because of the amount of people who live in the city. Obviously, the more populated the city, the more income it is going to generate! So, by issuing a salary cap, it gives all teams a fair chance to win because the great players throughout the league will spread evenly on different teams. Without a salary cap, rich teams could easily outbid other small teams, such as the Texans, in order to acquire a great player.
ReplyDeleteRobert Fitzsimmons