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Encyclopedia > Salary cap

In Professional sports, a salary cap (often called a wage cap in the United Kingdom) is a limit on the amount of money a team can spend on player salaries, either as a per-player limit or a total limit for the team's roster (or both). Several sports leagues have made salary caps mandatory, both as a method of keeping overall costs down, and in order to balance the league so a wealthy team cannot become dominant simply by buying all the top players. Salary caps are often the major issue in negotiations between management and players' unions. A professional can be either a person in a profession (certain types of skilled work requiring formal training / education) or in sports (a sportsman / sportwoman doing sports for payment). ... A union (labor union in American English; trade union, sometimes trades union, in British English; either labour union or trade union in Canadian English) is a legal entity consisting of employees or workers having a common interest, such as all the assembly workers for one employer, or all the workers...


Salary caps are used by major sports leagues around the world:

Contents

NHL can also be an abbreviation for National Historic Landmark or Non-Hodgkins lymphoma. ... The National Football League (NFL) is the largest and most prestigious professional American football league, consisting of thirty-two teams from American cities and regions. ... Major League Soccer (MLS) is a professional soccer league with teams in the United States and Canada. ... “NBA” redirects here. ... Minor leagues in the sense intended in this article are professional sports leagues which are not regarded as the premier leagues in those sports. ... Motto (French) God and my right Anthem No official anthem - the  United Kingdom anthem God Save the Queen is commonly used England() – on the European continent() – in the United Kingdom() Capital (and largest city) London (de facto) Official languages English (de facto) Unified  -  by Athelstan 927 AD  Area  -  Total 130... A BCRFC match at Boston College Rugby football, often just rugby, may refer to a number of sports descended from a common form of football developed at Rugby School in England United Kingdom. ... The Guinness Premiership is a professional league competition for rugby union clubs in the top division of the English rugby system. ... A rugby union scrum. ... Super League (Europe) began in March 1996 and is the only full-time professional rugby league competition operating in the northern hemisphere. ... Rugby league football (often shortened to rugby league) is a full-contact team sport played with a prolate spheroid-shaped ball by two teams of thirteen on a rectangular grass field. ... Football is a ball game played between two teams of eleven players, each attempting to win by scoring more goals than their opponent. ... This article is about the national league in Australian rules football. ... The National Rugby League (NRL) is the top league of professional rugby league football clubs in Australasia. ... Wikipedia does not yet have an article with this exact name. ...

History of salary caps in North America

Salary caps were largely unnecessary in the era of the reserve clause, which was long a standard clause in professional sports player contracts and which forbade a player from negotiations with another team without the permission of the team holding that player's rights even after the contract's term was completed. This system began to unravel in the 1970s due largely to the activism of players' unions, and the threat of anti-trust legal actions. Although anti-trust actions were not a threat to baseball, which has long been exempt from anti-trust laws, that sport's reserve clause was struck down by a United States arbitrator as a violation of other labor laws of that country. By the 1990s most players with several years' professional experience became free agents upon the expiry of their contracts and were free to negotiate a new contract with their previous team or with any other team. This situation, called Restricted Free Agency, led to "bidding wars" for the best players--a situation which inherently gave an advantage in landing such players to more affluent teams in larger media markets. The reserve clause is a term formerly employed in North American professional sports contracts. ... Media:Example. ... A view of the playing field at Busch Memorial Stadium, St. ... In North American professional sports, particularly baseball, football, and basketball, a free agent is a team player whose contract with a team has expired, and the player is able to sign a contract with another team. ...


In a response to this and as a way of limiting the damage this did to the competitive balance necessary to maintain fan interest in their sports, in the 1990s both the National Football League and the National Basketball Association negotiated salary cap arrangements with their respective players' unions.


Salary cap in the NHL

The negotiations for the most recent National Hockey League collective bargaining agreement revolved around players' salaries. Some pundits expected this dispute to set the precedent for the MLB and NBA. The league contended that its clubs spend about 75% of revenues on salaries, a percentage far higher than exists in other North American sports. NHL Commissioner Gary Bettman demanded "cost certainty" and presented the National Hockey League Players Association with several concepts that the NHLPA considered nothing more than euphemisms for a salary cap, which the union vowed it would never accept. This article or section does not cite its references or sources. ... “NHL” redirects here. ... The Collective Bargaining Agreement (CBA) is the contract between the NHL and the NHLPA that defines the structure of procedural, financial, and disciplinary relationships between the NHL, its teams, and its players. ... National Hockey League Commissioner is the highest executive official since 1993. ... This article or section does not cite any references or sources. ... The National Hockey League Players Association or NHLPA is a labour union that represents the interests of the hockey players in the National Hockey League. ... A euphemism is a word or phrase used in place of a term that originally could not be spoken aloud (see taboo) or, by extension, terms which they consider to be disagreeable or offensive. ...


The CBA expired on September 15, 2004 (the day after the World Cup of Hockey final). is the 258th day of the year (259th in leap years) in the Gregorian calendar. ... shelby was here 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ... The World Cup of Hockey is the successor to the Canada Cup ice hockey tournament. ...


A lockout ensued, leading to the cancellation of the entire 2004-05 NHL season, the first time a major sports league in North America has lost an entire season to a labor dispute. Millions of dollars in revenue were lost and some people alleged that the fans would turn to other sports, this becominga contentious point as attendance was very high after the lockout. In any event, the league owners were well prepared and did not break. A Canadian law prohibiting replacement workers, which could have easily forced the two sides to the bargaining table earlier, aided the players union. A lockout is a work stoppage in which an employer prevents employees from working. ... The 2004-05 NHL season would have been the 88th regular season of the National Hockey League (NHL). ...


The lockout was resolved with the NHLPA agreeing to a hard salary cap, although the NHL reciprocated by implementing revenue sharing which would enable the NHL to have a higher cap figure. It should be told Tim Ellithorpe was one of the authors of the 1984 NBA salary cap with executive Russ Granick.


The cap is formally titled the Upper Limit of the Payroll Range in the new CBA. For the 2005-06 NHL season, the salary cap was set at US$39 million per team. The modernized NHL shield logo was introduced for the 2005-06 season. ... ISO 4217 Code USD User(s) the United States, the British Indian Ocean Territory,[1] the British Virgin Islands, Cambodia, East Timor, Ecuador, El Salvador, the Marshall Islands, Micronesia, Palau, Panama, Turks and Caicos Islands, and the insular areas of the United States Inflation 2. ...


Due to better-than-expected revenues in each of the past two seasons, the cap was raised to $44 million for the 2006-07 NHL season, will be set at $50.3 million for the 2007-08[1]. The 2006-07 NHL season is the 89th regular season of the National Hockey League (NHL). ... The 2007-08 NHL season will be the 90th season of the National Hockey League (NHL). ...


The CBA also contains a Lower Limit of the Payroll Range, which is the minimum aggregate player salaries that each team must pay. The lower limit is defined from 2006-07 onwards to be $16 million below the cap, therefore the 2006-07 minimum was $28 million and the 2007-08 minimum will be $34.3 million. The difference between the salary cap and a team's actual payroll is the team's Payroll Room. There are very few or no other articles that link to this one. ...


Although six NHL franchises are based in Canada, all NHL salaries must be paid in U.S. dollars. The NHL has become the first of the major leagues to implement a hard cap whilst retaining guaranteed player contracts, something that NFL players do not have. The United States dollar is the official currency of the United States. ... NFL logo For other uses of the abbreviation NFL, see NFL (disambiguation). ...


Unlike their NFL counterparts, NHL clubs do not have the ability to release players in order to increase their Payroll Room - the remaining salaries of such players would continue to count towards the cap. Besides simply waiting for contracts to expire, the only way a club can normally increase its Payroll Room is to trade one or more higher-salary player(s) to another NHL team for one or more lower-salary player(s).


Some practices once common in the NHL (such as exchanging cash for players or agreeing to pay a portion of a player's remaining salary after trading him) have been totally forbidden in the new CBA to prevent wealthier teams from evading the restrictions of the cap. In football, a transfer is the action taken whenever a player moves between clubs. ...


Salary cap in the NFL

The NFL's cap is a so-called "hard cap", which no team can exceed for any reason under penalty from the league. A lesser-known fact is that the NFL also has a hard salary floor—a minimum team payroll that no team can drop beneath for any reason. The cap was introduced for the 1994 season and was set at $34.6 million initially. Both the cap and the floor are adjusted annually based on the change in the league's revenues. As of 2006 the NFL salary cap is approximately $102 million per team, while the salary floor is roughly $75 million per team. This number has increased every year since 1994 and will reach approximately $109 million in 2007. 2006 is a common year starting on Sunday of the Gregorian calendar. ... The United States dollar is the official currency of the United States. ...


Under the NFL's agreement with the NFLPA, (with a few rare exceptions) the salary cap effects of guaranteed payments to players are prorated over the term of a contract. A $10 million dollar signing bonus on a four year contract counts as $2.5 million towards the cap during each of those four years. If a player retires, is traded, or is cut before June 1st, all remaining bonus is applied to the salary cap for the current season. If after June 1st, the current cap is unchanged, and the next year's cap must absorb the entire remaining bonus. The National Football League Players Association, or NFLPA, is the labor union of players in footballs National Football League. ...


Because of this treatment, NFL contracts almost always include the right to cut a player before the beginning of a season. If a player is cut, his salary for the remainder of his contract is not paid, and never counted against the salary cap for that team. A highly sought-after player signing a long term contract will usually receive a guaranteed signing bonus, thus providing him with financial security even if he is cut before the end of his contract.


Incentive bonuses require a team to pay a player additional money if he achieves a certain goal. For the purposes of the salary cap bonuses are classified as either "likely to be earned" which requires the amount of the bonus to count against the cap, or as "not likely to be earned" meaning it will not count against the team's salary cap. Large NLTBE bonuses are written into contracts to make them sound larger in the media. A team's salary cap may be adjusted downwards for NLTBE bonuses that were earned in the previous year and upwards for LTBE bonuses that were not earned in the previous year.


Teams usually design contracts so that the player's cap salary is highest in later years of the cap. They accomplish this by setting the player's base salary at lower amounts in the first years of the contract than the higher years.


The effect of the salary cap has been the release of many higher-salaried veteran players and their replacement by lower-salaried younger players. The salary cap prevents teams with a superior financial situation from the formerly widespread practice of stocking as much talent on the roster as possible by placing younger players on reserve lists with false injuries. This was often used to allow an inexperienced player to learn valuable skills, and some money, while not counting as a player on the active roster. This practice allowed teams to keep an experienced, capable quarterback, whose skills were beginning to decline with age or who was merely nearing retirement, to train a potentially great, but inexperienced young quarterback. (A notable example is the case of the San Francisco 49ers playing Hall of Famer Joe Montana while grooming Hall of Famer Steve Young.) Navy quarterback Aaron Polanco sets up to throw. ... City San Francisco, California Other nicknames Niners, The Red And Gold, Bay Bombers Team colors Cardinal red, metallic gold and black Head Coach Mike Nolan Owner Denise DeBartolo York and John York General manager Lal Heneghan Mascot Sourdough Sam League/Conference affiliations All-America Football Conference (1946-1949) Western Division... The Pro Football Hall of Fame is the hall of fame of the National Football League (NFL). ... This article or section does not cite any references or sources. ... Jon Steven Young (born October 11, 1961 in Salt Lake City, Utah, USA), is a former quarterback for the National Football Leagues San Francisco 49ers and Tampa Bay Buccaneers, and the Los Angeles Express of the short-lived United States Football League. ...


Generally, the practice of keeping older players who had contributed to the team in the past, but whose abilities have declined, had fallen out of favor, as a veteran's minimum salary was required to be higher than a player with lesser experience. To prevent this, a veteran player who receives no bonuses in his contract may be paid the veteran minimum of up to $810,000, while only accounting for $425,000 in salary cap space.


It is widely believed that the salary cap has increased parity in the NFL. Although the system has allowed a greater turnover in playoff teams than at any other time in the Super Bowl era, it has not prevented the New England Patriots from winning three Super Bowls in four years (The seasons beginning in 2001, 2003 and 2004). Media reports have attributed this to New England's aggressively unsentimental use of the salary cap in trimming veterans (such as Lawyer Milloy, a key member of the 2001 team who was cut just before the start of the 2003 season.) City Foxborough, Massachusetts Other nicknames The Pats Team colors Nautical Blue, New Century Silver, Red, and White Head Coach Bill Belichick Owner Robert Kraft General manager Bill Belichick Mascot Pat Patriot League/Conference affiliations American Football League (1960–69) Eastern Division (1960–69) National Football League (1970–present) American Football... Lawyer Milloy (born November 14, 1973 in St. ...


The salary cap has also served to limit the rate of increase of the cost of operating a team. This has accrued to the owners' benefit, and is widely regarded as being responsible for the NFL being overall the most financially stable of the major North American sports organizations. While the initial cap of $34.6 million has increased to $102 million, this is due to large growths of revenue.


Salary cap in the NBA

For a more detailed discussion, see the article NBA Salary Cap.

Similarly to the NFL, the NBA's salary cap is calculated as a percentage of the league's revenues. As of 2004-2005 season, the number was approximately $46 million (U.S.) per team. The NBA's salary cap is a so-called "soft cap", meaning that teams are allowed to exceed the cap number in order to retain the rights to a player who has already been on the team. This provision is known as the "Larry Bird" exception, named after the former Boston Celtics great who was retained by that team until his retirement under the provisions of this rule. The NBA Salary Cap is the limit to the total amount of money that NBA teams are allowed to pay their players. ... This article contains a trivia section. ... The Boston Celtics are a professional basketball team based in Boston, Massachusetts. ...


The purpose of this rule is to address fan unease over the frequent changing of teams by players under the free agency system. Fans become displeased over their favorite player on their favorite team suddenly bolting to another team. The "Larry Bird" provision of the salary cap gives the player's current team an advantage over other teams in free agent negotiations, thus increasing the chances that the player will stay with his current team, pleasing more fans in so doing.


The provision tends to result in most teams being over the cap at any given time. There is no official penalty for being over the cap, but teams over the limit are prohibited from signing free agents for more than the league minimum, with only a few exceptions. The NBA also has a salary floor, but teams are not penalized as long as their total payroll exceeds the floor at the end of the season.


The NBA also has a luxury tax system which is triggered if average team payroll exceeds a certain number higher than the cap. In this case, the teams with payrolls exceeding a certain threshold have to pay a tax to the league which is divided amongst the teams with lower payrolls. However, this penalty is levied against teams in violation only if the league average also breaches a separate threshold.


The NBA has also implemented a maximum salary for individual players. This was done following a dramatic increase in player salaries, in spite of the salary cap, in the mid-1990s. Under the collective bargaining agreement, a player's maximum possible salary increases along with his time of service in the league. For a player of four years' experience, the salary threshold begins at approximately $9 million, with annual increases of up to 20% possible beyond that. For players of greater experience, the salary limit is higher - but the 20% limit on annual increases remains the same.


In the NBA, the salary cap has not had quite the effect of breaking up championship teams that it has had in the NFL. Repeat championship winners have been far more likely to occur in the NBA than in the NFL in the salary cap era. Of course, the converse effect of this has been to make the overall rate of salaries paid and hence the expense to operate a team rise more rapidly in the NBA than in the NFL. Average NBA salary is $4.9 million (U.S.), the highest of any major North American sports league. The collective bargaining agreement came up for agreement in 2005 but NBA Commissioner David Stern decided to make no attempt to implement a hard cap or any other major changes, to the dismay of many commentators who felt that changes were long overdue and that the NBA could take advantage of the NHL's momentum. For other people with the name David Stern, see Stern (disambiguation) David Joel Stern (born on September 22, 1942) is an American lawyer, who has been commissioner of the National Basketball Association (NBA) since 1984, when, via a successful coup detat he wrestled control from the previous commissioner, Larry...


Luxury Tax in Major League Baseball

Major League Baseball has instead implemented the so-called luxury tax, an arrangement by which teams whose aggregate payroll exceeds a certain figure (annually revised) must pay to the MLB who then puts the money into its "industry-growth fund". However, critics point out that the luxury tax has had little effect on maintaining competitive balance and on overspending by affluent teams. For the 2004 season, only the New York Yankees, Boston Red Sox and Los Angeles Angels of Anaheim paid any luxury tax; such teams had superstar players whose yearly salary was close to the entire payroll of weaker clubs. Despite this fact, teams have been able to compete with low payrolls. The Florida Marlins contended for a playoff spot in 2006 with a payroll less than what Yankees 3rd Baseman Alex Rodriguez was paid, and the Oakland Athletics went to the ALCS in the same season despite a low payroll. Meanwhile, the New York Yankees have not won a World Series in 6 straight seasons and both the Red Sox and Angels missed the playoffs in 2006. Due to opposition of a powerful MLB union and because the Yankees and Red Sox refused to side with the majority of MLB owners, the implementation of a salary cap is unlikely at the moment. Although some saw the success of NHL owners in their 2004-05 lockout as an opportunity for MLB to reform its collective bargaining agreement, baseball owners agreed to a new five-year deal in October 2006 that did not include a salary cap. This article or section does not cite any references or sources. ... A luxury tax in the sports sense is a surcharge put on the aggregate payroll of a team to the extent to which it exceeds a predetermined guideline level set by the league. ... Major league affiliations American League (1901–present) East Division (1969–present) Current uniform Retired Numbers 1, 3, 4, 5, 7, 8, 8, 9, 10, 15, 16, 23, 32, 37, 44, 49 Name New York Yankees (1913–present) New York Highlanders (1903-1912) Baltimore Orioles (1901-1902) (Also referred to as... Major league affiliations American League (1901–present) East Division (1969–present) Current uniform Retired Numbers 1, 4, 8, 9, 27, 42 Name Boston Red Sox (1908–present) Boston Americans (1901-1907) Other nicknames The BoSox, The Old Towne Team, The Sox Ballpark Fenway Park (1912–present) Huntington Avenue Baseball Grounds... Major league affiliations American League (1961–present) West Division (1969–present) Current uniform Retired Numbers 11, 26, 29, 30, 42, 50 Name Los Angeles Angels of Anaheim (2005–present) Anaheim Angels (1997-2004) California Angels (1965-1996) Los Angeles Angels (1961-1965) Ballpark Angel Stadium of Anaheim (2004–present) a. ... Major league affiliations National League (1993–present) East Division (1993–present) Current uniform Retired Numbers 5, 42 Name Florida Marlins (1993–present) Ballpark Dolphin Stadium (1993–present) a. ... “A-Rod” redirects here. ... Major league affiliations American League (1901–present) West Division (1969–present) Current uniform Retired Numbers 9, 27, 34, 42, 43, (As) Name Oakland Athletics (1968–present) Kansas City Athletics (1955-1967) Philadelphia Athletics (1901-1954) (Referred to as As) Ballpark McAfee Coliseum (1968–present) a. ... The Major League Baseball Players Association (or MLBPA) is the union of professional major-league baseball players. ... This article or section does not cite its references or sources. ... October 2006 is the tenth month of that year and has yet to occur. ...


Unlike the other three major North American sports, MLB has no team salary floor. The only minimum limits for team payrolls are based on the minimum salaries for players of various levels of experience written into MLB's collective bargaining agreement.


Salary cap in the Canadian Football League

The Canadian Football League also has a salary cap. However, among the great Canadian football players such as amongst sports analysts, the CFL's salary cap has been well-known as being more of a guideline which few (if any) teams adhered to. In the CFL's 2005 season, the salary cap hovered around C$2.6 million per team. On June 13, 2006, the proposed salary management system featuring a $3.8 million Maximum Salary Expenditure Cap (SEC) initially proposed in January was ratified at the CFL board of governors meeting in Winnipeg, Manitoba.[2] Lions Stampeders Eskimos Roughriders Blue Bombers Tiger-Cats Argonauts Alouettes The Canadian Football League (CFL), also known by its French name, Ligue canadienne de football (LCF), is a professional sports league located in Canada that plays Canadian football, and is the second most popular sports league in Canada. ... The 2005 Canadian Football League season is considered to be the 52nd season in modern-day Canadian football, although it is officially the 48th Canadian Football League season. ... It has been suggested that this article or section be merged with Loonie. ... Nickname: Motto: Unum Cum Virtute Multorum (One With the Strength of Many) Coordinates: , Country Canada Province Manitoba Region Winnipeg Capital Region Established, 1738 (Fort Rouge) Renamed 1822 (Fort Garry) Incorporated 1873 (City of Winnipeg) Government  - City Mayor Sam Katz  - Governing Body Winnipeg City Council  - MPs List of MPs  - MLAs List... Motto: Gloriosus et Liber (Latin: Glorious and free) BC AB SK MB ON QC NB PE NS NL YT NT NU Capital Winnipeg Largest city Winnipeg Official languages English Government - Lieutenant-Governor John Harvard - Premier Gary Doer (NDP) Federal representation in Canadian Parliament - House seats 14 - Senate seats 6 Confederation...


Enforcement of the new regulations is set begin starting with the 2007 CFL season, when the cap is set to rise to $4.05 million due to increased revenues. [3] However, critics point out that violation of the cap will apparently result only in fairly modest fines and forfeited draft picks. The effect on a violating team's draft selections has not been disclosed, however CFL teams rely more on trades and free agents cut from other CFL teams and the NFL to stock their rosters. The fines have been revealed to be progressive in nature, up to three dollars for every dollar beyond $300,000 over the cap. [4] Critics believe such a system will operate more like a strict luxury tax regime as opposed to a true cap. The 2007 CFL Season will commemerate the fiftieth season of the league, and many special events will be held to commemerate the event. ... In North American professional sports, particularly baseball, football, and basketball, a free agent is a team player whose contract with a team has expired, and the player is able to sign a contract with another team. ... NFL logo For other uses of the abbreviation NFL, see NFL (disambiguation). ... A luxury tax in the sports sense is a surcharge put on the aggregate payroll of a team to the extent to which it exceeds a predetermined guideline level set by the league. ...


Salary caps in other North American leagues

Salary caps are common in other leagues. In Arena football, the current salary cap is $1.82 million per team. Tampa Bay Storm head coach Tim Marcum was recently fined and suspended by the Arena Football League for four games (two in the 2005 season, two in 2006) for salary cap violations. Arena football is a sport invented by Jim Foster, a former executive of the United States Football League and the National Football League. ... Conference National Division Southern Year founded 1987 Home arena St. ... In sports, a coach is an individual involved in the direction and instruction of the on-field operations of an athletic team or of individual athletes. ... Tim Marcum is considered to be the most successful coach in the history of Arena Football. ... The Arena Football League (AFL) was founded in 1987 as an American football indoor league. ...


Salary caps in Europe

Several European football (soccer) leagues are considering salary caps. In 2002, BBC reported [5] that the G14 group of 18 leading European football teams would cap their payrolls at 70% of team's income, starting from the 2005/2006 season. Serie A, the leading Italian football league and The Football League in England have also considered salary caps. Football (soccer) - Wikipedia, the free encyclopedia /**/ @import /skins-1. ... G-14 is an organisation of European football clubs. ... This article is about the Italian football (soccer) league. ... The Football League is a league competition featuring professional football clubs from England and Wales, and is the oldest such competition in world football. ... Motto (French) God and my right Anthem No official anthem - the  United Kingdom anthem God Save the Queen is commonly used England() – on the European continent() – in the United Kingdom() Capital (and largest city) London (de facto) Official languages English (de facto) Unified  -  by Athelstan 927 AD  Area  -  Total 130...


Top executives in European football have acknowledged that a number of challenges not present in North America would confront anyone who tried to implement an effective cap across European football or even across a single league, especially if this were to be a flat limit put in place to create competitive balance: Football is a ball game played between two teams of eleven players, each attempting to win by scoring more goals than their opponent. ...

  • Europeans use multiple currencies and football wages are usually paid in the local currency. Although the countries hosting all but one of the most prominent European leagues now use the euro, the one exception (England) has the richest league. Even if a hypothetical UEFA-wide cap were denominated in euros, fluctuating exchange rates would make it difficult for the cap to be fairly administered in the United Kingdom since its salaries are paid in pounds sterling. By comparison, most player salaries paid to players on Canadian major sports teams are paid in U.S. dollars, in fact this is now mandated in the NHL to ensure that payrolls do not fluctuate with exchange rates. On the other hand, trying to force British clubs to pay wages in euros so that their payrolls could not exceed a cap would meet with opposition from clubs since their revenues are collected in pounds, and might even provoke political opposition from Britons determined to prevent the euro from replacing the pound.
  • European tax systems and rates vary greatly from country to country. One prominent club, AS Monaco, plays in a principality with no income tax at all. A flat payroll limit would therefore equate to aggregate take home pay that varied greatly from one club to the next, which would make it difficult for teams in countries with high taxation to attract the best players. By comparison, the differences between the tax systems and tax rates of Canada, the U.S. and between their respective provinces and states are not nearly as great.
  • European leagues are in competition with each other for the best players. Moreover, football leagues in European Union countries have been forbidden from prohibiting the signing of EU players from other nations, or even from limiting their numbers. Therefore, if one league imposed a strict cap on its teams, the best players from the country in question would still be free to move to uncapped rival leagues. Success in European club competitions is not only a matter of national pride - the number of places each country gets in these competitions is determined by its teams' past performances in Europe. In each of the North American major sports, there is only a single league which oversees a single premier competition, and those leagues which have strict caps do not have to deal with teams in rival leagues that could afford to maintain payrolls that are even close to the respective cap levels.
  • The promotion and relegation system presents challenges especially if the cap system provisioned lower limits in the lower divisions. A club with a payroll close to the top division's cap might be relegated and then find themselves significantly over the second division cap. A promoted club might have to face the challenge of hastily finding players who it could then pay under a higher cap. North American leagues do not employ promotion and relegation systems.
  • Different governing bodies have authority over domestic and international competitions. For example, UEFA governs European football and organizes the prestigious Champions League and UEFA Cup, but its authority over the domestic leagues is very limited. Although UEFA could, in theory, impose a wage cap, it would only apply to UEFA's club competitions and to the portion of each team's payroll paid to players registered with UEFA. A wealthy Champions League team could then sign players who would play exclusively in domestic competitions. In each of the North American major sports, there is only a single league which oversees a single premier competition.

As noted in the beginning of this article, the top English rugby competitions, the Guinness Premiership (Union) and the Super League (League), have caps in place. “EUR” redirects here. ... The Union of European Football Associations, almost always referred to by the acronym UEFA (pronounced (you-AY-fuh) or (oo-Ay-fuh) or ), is the administrative and controlling body for European football. ... ISO 4217 Code GBP User(s) United Kingdom, Crown Dependencies Inflation 2. ... A tax (also known as a duty) is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (e. ... A tax (also known as a dutyor Zakat in islamic economics) is a charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (e. ... The Association Sportive de Monaco Football Club is a Monegasque football club, founded in 1919. ... Motto Deo Juvante(Latin) With Gods Help Anthem Hymne Monégasque Monaco(circled in inset) on the European continent() Capital Monaco-Ville (de facto)1 Largest Most populated quartier Monte Carlo Official languages French2 Demonym Monegasque Government Constitutional monarchy (Principality)  -  Prince Albert II  -  Minister of State Jean-Paul Proust... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        An income tax is a tax levied on the financial income... Canada consists of ten provinces and three territories. ... A U.S. state is any one of the 50 states which have membership of the federation known as the United States of America (USA or U.S.). The separate state governments and the U.S. federal government share sovereignty. ... In football (soccer), the Bosman ruling is one that allows professional football players in the European Union to move freely to another club at the end of their term of contract with their present team. ... Defense of the homeland is a commonplace of military patriotism: The statue in the courtyard of École polytechnique, Paris, commemorating the students involvement in defending France against the 1814 invasion of the Coalition. ... In European football, the UEFA coefficients are statistics used for ranking and seeding teams in club and international competitions. ... In many sports leagues around the world (with North American and Australian professional leagues being the most notable exceptions), relegation (or demotion) means the mandated transfer of the least successful team(s) of a higher division into a lower division at the end of the season. ... The Union of European Football Associations, almost always referred to by the acronym UEFA (pronounced (you-AY-fuh) or (oo-Ay-fuh) or ), is the administrative and controlling body for European football. ... The UEFA Champions League (also known as the European Cup, CE1, C1[1] or CL) is a seasonal club football competition organized by the Union of European Football Associations (UEFA) since 1955 for the most successful football clubs in Europe. ... The UEFA Cup is a football competition for European club teams, organized by the Union of European Football Associations (UEFA). ... A BCRFC match at Boston College Rugby football, often just rugby, may refer to a number of sports descended from a common form of football developed at Rugby School in England United Kingdom. ... The Guinness Premiership is a professional league competition for rugby union clubs in the top division of the English rugby system. ... A rugby union scrum. ... Super League (Europe) began in March 1996 and is the only full-time professional rugby league competition operating in the northern hemisphere. ... Rugby league football (often shortened to rugby league) is a full-contact team sport played with a prolate spheroid-shaped ball by two teams of thirteen on a rectangular grass field. ...


Salary caps in Australia

Australian rules football

Australian Football League

The Australian Football League has implemented a salary cap on its clubs since 1987 (when Brisbane and West Coast were admitted) as part of its equalisation policy designed to restrict the ability of its richest clubs (such as Collingwood and Essendon) to perennially dominate the competition. This article is about the national league in Australian rules football. ... Collingwood Football Club, nicknamed The Magpies, and the players wear black and white striped guernseys, is an Australian rules football club, playing in the elite Australian Football League. ... Essendon Football Club, nicknamed The Bombers, is an Australian rules football club that is part of the Australian Football League. ...


The salary cap has increased substantially since the competition was re-branded as a national competition in 1990, helping to stem the dominance of high membership clubs such as West Coast and Adelaide. The salary cap for the most of the clubs in 2007 is $7 million (AUD), with the salary floor coming in at $6.3 million. The West Coast Eagles Football Club is an Australian rules football club competing in the Australian Football League. ... Adelaide Football Club, nicknamed The Crows, is an Australian rules football club playing in the Australian Football League, based in Adelaide, South Australia. ...


Penalties

The penalties for violating AFL salary cap regulations include fines, loss of draft picks and loss of premiership points (which has not yet been implemented).


In 2002, the Carlton Football Club was found to have systematically rorted the regulations between 1994 and 2001. The club was fined a total of $980,000 ($930,000 plus $50,000 for a recent salary cap breach) and banned from the national draft for two years. Carlton Football Club, nicknamed The Blues, is the sixth oldest Australian rules football club and the third oldest club in the Australian Football League. ...


The club are still recovering both on-field and off-field from the significant penalties.


Criticism of the cap

The AFL salary cap is occasionally controversial, as the cap is a "soft" cap and therefore slightly different for each club. Due to the larger number of players in each squad compared to other sports, the cost per club can be higher than and individual player payments can be less than or equal to other rival national competitions. Clubs in poor financial circumstances do not use their full cap to ensure they reduce costs.


The Sydney Swans have a larger cap due to the increased cost of living in that city, and until 2004 the Brisbane Lions were also permitted a slightly higher cap - these cap extensions justified in the name of AFL's expansion into rugby league's heartland in Sydney and Brisbane.-1... The Brisbane Lions Australian Football Club (the trading name for the Brisbane Bears-Fitzroy Football Club) are an Australian Football League club based in Brisbane, Queensland. ... High marking is a key skill and spectator attribute of Aussie Rules Precise field and goal kicking using the oval shaped ball is the key skill in Aussie Rules Football Australian rules football, also known as Australian football, Aussie rules, or simply football or footy is a code of football... Rugby league football (often shortened to rugby league) is a full-contact team sport played with a prolate spheroid-shaped ball by two teams of thirteen on a rectangular grass field. ... The Sydney Opera House on Sydney Harbour Sydney (pronounced ) is the most populous city in Australia, with a metropolitan area population of 4,119,190, and 151,920 in the City of Sydney, as of the 2006 census. ... Brisbane (pronounced ) is the capital and most populous city of the Australian state of Queensland, as well as the third largest city in Australia, with a greater metropolitan population of 1. ...


However, the Lions' astonishing success in winning a hat-trick of premierships from 2001 to 2003 resulted in the AFL reducing Sydney's cap extension and eliminating Brisbane's altogether.


The AFL Players Association negotiates for players with the AFL on the topic of average salary. The AFL Players Association is a body that consists of players and former players in the Australian Football League. ...


State and Regional Leagues

Apart from the AFL, several regional leagues also have salary caps which although widening between them and the AFL and overall less than national competitions, are sustantial enough to dictate the movement of semi-professional and professional players between states and the overall playing quality and spectator attendance of the state leagues.


The overall salary of players is complicated somewhat by the affiliations with AFL clubs, allowing AFL players to play for state league clubs, which varies from league to league.


The highest of these is the SANFL, which in 2007 will have a salary cap of $340,000 (excluding service payments).[1] The South Australian National Football League, or SANFL as it is usually referred to, is the premier league for Australian Rules football in the state of South Australia. ...


The Western Australian Football League in 2007 has a salary cap of $160,000 and $15,000 in service payments for each club which is not expected to increase until 2009.[2] The Western Australian National Football League (WANFL) was formed in 1885 and was later changed to the Western Australian Football League (WAFL) on 6 February 1980 and has since remained the premier Australian rules football league in Western Australia. ...


The Victorian Football League in 2007 has a salary cap of $155,000 excluding service payments. There are a significantly higher number of AFL reserves due to affiliations with Victorian clubs, but player payments for these appearances is apparently not included in the VFL's salary cap. The Victorian Football League, formerly known as the Victorian Football Association (VFA), is a second-tier Australian rules football league. ...


The Northern Tasmanian Football League has a salary cap in 2007 of $47,000.[3] The Northern Tasmanian Football League is an Australian rules football competition in northern Tasmania. ...


National Rugby League

The National Rugby League adopted a salary cap based on the AFL model in 1990. The National Rugby League (NRL) is the top league of professional rugby league football clubs in Australasia. ...


In 2007 it is $3.6 million, except for the New Zealand Warriors (see below).


The NRL's stated purposes for having a salary cap are "to assist in 'spreading the playing talent'" and "ensure that Clubs are not put into positions where they are forced to spend more money than they can afford in terms of player payments, just to be competitive." [6]


In the NRL, clubs found to have breached the salary cap rules usually incur a fine.


Breaches

Six clubs were fined for minor infractions in 2003.


In mid-2002, the Canterbury Bulldogs were found guilty of serious and systematic breaches totalling $920,000 - at the time enough for two extra players. The club was hit with a $500,000 fine, were stripped of all 37 competition points accumulated to that date. Canterbury Leagues Club, Belmore The Bulldogs (formerly Canterbury-Bankstown Bulldogs) are a team in the National Rugby League (NRL), the premier rugby league football competition in Australia. ...


The club, who had been leading the competition table prior to the penalty's imposition, were denied a place in the finals, and won the wooden spoon, a shattering outcome for the club and its fans. Two of the club's officials were later jailed for fraud. A playoff in sports (North American professional sports in particular) is a game or series of games played after the regular season is over with the goal of determining a league champion, or a similar accolade. ...


In the 2006 pre-season, the New Zealand Warriors revealed that their former management had exceeded the salary cap in 2004-2005. The club had to start 2006 with a four-point deficit, were fined $430,000, and must play 2007 under a reduced salary cap of $3.15 million. The New Zealand Warriors (formerly Auckland Warriors) are a rugby league team based in Auckland, New Zealand who compete in the Australasian based National Rugby League competition. ...


Football (Soccer)

A-League

The recently established A-League national soccer competition utilized a universal salary cap of AU$1.5 million for each squad in its inaugural 2005/2006 season. However, each team can also sign one "marquee player" whose salary is privately funded, and not included in the team's salary cap. Wikipedia does not yet have an article with this exact name. ... Football (soccer) - Wikipedia, the free encyclopedia /**/ @import /skins-1. ...


The cap has been increased to AU$1.85 million for the 2007/2008 season. Each team now can sign two "marquee players" and the cap is expected to reach AU$2 million by its fifth year.


National Basketball League

The NBL's salary cap is AU$776,000 for the 2006-07 season but will increase to AU$810,000 for the 2007-08 season. The cap has now risen for two consecutive years due to the continued growth for the League. [4]


Criticisms of salary caps

Any criticism of a salary cap cannot simply ignore the importance of money to professional sports. One can argue that being able to spend more on player salaries is just as much of an unfair advantage as having an extra player on the field, and thus that money must be a consideration in the rules of the league.


1. Unfair Negotiation Tactic. One of the most common criticisms of the salary cap is that it is simply a way for management to get an unfair advantage in labor negotiations with players. Most labor disputes engender a fair amount of media sympathy for the side of labor and the "working man", but professional sports generally do not receive the same understanding. The notion of millionaire athletes and billionaire owners arguing over contract clauses and percentage points strikes many as unseemly, and is perhaps best illustrated by NBA player Kenny Anderson's statement to the media during the 1998-1999 lockout: "I may have to sell a couple of my [eight] cars to make ends meet." Anderson later claimed to be joking, but his words were quickly pounced on by pundits and used to portray him, and pro athletes in general, as out of touch with the general public on financial issues. Kenneth (Kenny) Anderson (born October 9, 1970 in Queens, New York) is a left-handed point guard who played more than a decade in the National Basketball Association. ...


Owners have tried to avoid this perception by portraying a salary cap as necessary for competitive balance, but even this can be troublesome. In the case of the NHL lockout, the owners first tried to implement a hard salary cap while shying away from revenue sharing. This was viewed cynically as an attempt to benefit the wealthy teams since they would see a drop in player payrolls while getting to retain their significant revenue streams. A hard cap without revenue sharing would also need a lower-than-acceptable cap figure (to players) to suit the weaker teams. The NHL eventually agreed to increased revenue sharing in the new CBA, which allowed for a higher cap. Based on the NFL model, a hard salary cap should be accompanied by extensive revenue sharing and a hard salary floor in order to create true competitive parity among teams.


2. Veteran Neglect. As already alluded to, often a team will have to let go of many of its players – frequently, veterans who have been with the club for a long time – in order to comply with the salary cap; this has led some observers to lament the fact that situations in which a player remained with the same team for his entire career have become far less common since the salary cap was implemented than before.


3. Distorting Fan Attitudes. Also, some have blamed the perceived value of salary caps for changing fan attitudes. For example, in baseball, years ago, it was considered a positive achievement for a team to finish in the first division, even if it did not qualify for post-season play; now, by contrast, fans tend to lose interest in a team once it is out of playoff contention. Many fans believe that the lack of a salary cap has caused skyrocketing player salaries and that these increased costs are eventually passed on to rising ticket prices. However, many sports economists argue this claim is false, and that ticket prices are affected mostly by demand, not by what the players are being paid.[7] A view of the playing field at Busch Memorial Stadium, St. ... First division is a term that has had various meanings, at various times, in the sport of baseball: Prior to 1961, the two major baseball leagues — the National League and the American League — contained eight teams each, and a team in first through fourth places collectively was said...


Also, players are no longer the heroes that they once were in the eyes of fans; an increasing number of fans are blaming players for "greed" in trying to command the highest salaries possible with little regard for a team's competitiveness or financial health. A growing view among fans is that owners are no longer entirely at fault for overspending; the players bear the blame since they benefit from usurping such a system that encourages owners to spend freely.


4. Restricting Free Markets. Still other critics, such as talk radio host Rush Limbaugh, have even objected to the concept of the salary cap on libertarian grounds, expressing the opinion that there should be no artificial limit on what anyone is able to earn if they have the talent. However, this is countered by the all-too-frequent possibility of teams that sign a supposed superstar to a lucrative and guaranteed long-term contract, only to see him perform below expectations right after; overpaid and underperforming players perhaps contribute the most to escalating player salaries. Moreover, a salary cap is perfectly acceptable in most libertarian theories as long as the cap is mutually agreed to by both parties, and not coercively imposed unilaterally. Talk radio is a radio format which features discussion of topical issues. ... Rush Hudson Limbaugh III (born January 12, 1951) is an American radio talk show host and political commentator. ... See also Libertarianism and Libertarian Party Libertarian,is a term for person who has made a conscious and principled commitment, evidenced by a statement or Pledge, to forswear violating others rights and usually living in voluntary communities: thus in law no longer subject to government supervision. ...


The libertarian view also ignores the fact that sports leagues are premised upon competition that is more tightly regulated (by the rules of the sport) than almost any other occupation. Sports leagues, especially in North America, are in a sense socialistic in nature. In order to maximize league-wide revenues, they must continue to draw new and existing fans by keeping the games interesting and unpredictable, and this requires guaranteeing every team a minimum degree of competitiveness, perhaps at the expense of the richest and/or most successful teams.


References

  1. ^ http://footysa.com/index.php?title=2007_Salary_Cap_Changes
  2. ^ http://72.14.253.104/search?q=cache:c_shHKldzQMJ:wafootball.com.au/default.aspx%3Fs%3Dnewsdisplay%26aid%3D113399+%22wafl+salary+cap%22&hl=en&ct=clnk&cd=1
  3. ^ http://www.examiner.com.au/story.asp?id=356256
  4. ^ http://www.nbl.com.au/default.aspx?s=newsdisplay&aid=4330

External links


  Results from FactBites:
 
Salary cap - Wikipedia, the free encyclopedia (3837 words)
Salary caps are often the major issue in negotiations between management and players' unions.
Salary caps were largely unnecessary in the era of the reserve clause, which was long a standard clause in professional sports player contracts and which forbade a player from negotiations with another team without the permission of the team holding that player's rights even after the contract's term was completed.
Due to bonuses, the amount of a player's salary counts towards the salary cap is not necessarily the same as the amount which he is actually paid in the current year.
Baseball Prospectus | Articles | The Daily Prospectus: Salary Cap (1758 words)
There's a mythology that surrounds the salary cap, one so ingrained in any discussion of the topic that to get through the layers of misconceptions takes the work off on a half-dozen tangents, all of which are informative and entertaining, but which make for a difficult read.
Salaries are not limited on an individual basis, but by team, so the restriction is not on the players, but on the teams.
A salary cap merely keeps teams from bidding on labor past a certain point, regardless of the value of the available labor or the team's resources, with the effect of lowering salaries across the board.
  More results at FactBites »

 
 

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