Salary Capping Research

Document Type:Research Paper

Subject Area:Sports

Document 1

For instance in football in the various major league on earth including the German Bundesliga. English Premier League and Spanish La Liga. Players are not only getting attracted to play for some of the best clubs in these leagues, the issue of how much one is going to earn playing for these clubs is also becoming a significant factor. The rise of the Chinese super league amplifies this idea, and we are witnessing many young and talented players in their early and mid-twenties jumping ship to join this league since it is associated with enormous wages for its players. Other sports such as Basketball, and baseball, Athletics among others are also related to huge monies. The essence behind implementing this salary system is to ensure every team involved in the league have roughly the same amount of money that they can use on paying their players reducing the possible disparities if everyone was given the freedom to spend as they pleased.

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The small teams with fewer resources have an opportunity to compete fairly with the large clubs bearing more finances (Dietl et al, 309). Salary caps, in a nutshell, sets the maximum amount that the best talents can earn from their respective clubs. The regulation is put in place by the sport’s governing body and all the teams participating in a given league or competition are required to append a signature on the agreement that they would follow the directions outlined in the contract. Ones such a team agrees to the regulation, they cannot surpass specific figures while remunerating their stars and every team is required to provide the governing body with their financial standings to ensure that none of them involves in unethical behavior such as paying players more behind the curtains (Dietl et al, 310).

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Another implication is that smaller teams gain the ability to attract stars from the more prominent clubs since everyone has virtually the same amount of cash to operate from. This creates a level playing ground where both the wealthier and those with fewer funds can build meaningful franchise since competition is thrown on other levels, not by finances (Dietl et al, 315). Purpose of the Salary Capping System In the countries where the capping systems have been used, several benefits have been realized with adopting the approach. The two main advantages obtained includes ensuring that there is fairness in the competition and creating a system where the entities involved in the league have financial fitness. a) Competition Fairness Most soccer competition, for example, the English Premier League (EPL) are made up of teams bearing different histories.

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All players in the league are paid a given maximum amount of cash meaning even the smallest clubs in the league can effectively compete on the same platform with the rest of the clubs. The transfer market becomes an avenue where the club that demonstrates the best attractiveness wins rather than the clubs with the financial muscle taking it all. In the modern times, the EPL, Spanish Premier League-La liga and Bundesliga- German Premier League have been operating on these ideas making it very hard for the small teams to rise to the top. The French League 1 is following in the footsteps of these main leagues by clubs such as Paris Saint Germaine (PSG) becoming a major club in Europe financially.

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This is unlike in the US where capping system has been very well adopted making the league one of the most competitive in the globe. Implications of Applying the Capping System It is no brainer that capping affects the number of wages that athletes associated with particular sports can earn. This has been an area of significant controversy since the top performers usually feel disadvantaged by the system. For instance, in 1994 (Staudohar) in the US, the Major League Baseball season did not run for the whole season. The primary cause of this was that the players felt underpaid and hence protested the proposed salary cap by the owners of the clubs (Staudohar). Another issue with the capping system is that it may end up killing the league entirely.

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The owners of sporting organization would cherish such a move if implemented globally but this will be a disadvantage to the players involved in the generation of massive revenues since they can only take a meager percentage of the profit made. Despite the fact that the capping enhances competition, the welfare of the players is not considered. I propose that players be paid according to the financial capability of the clubs. Instead of implementing Salary caps, sports governing bodies should seek ways of improving the smaller clubs in the competition in that case of soccer. This would involve empowering them financially such that they can compete fairly with the giants in the leagues. "The effect of salary caps in professional team sports on social welfare.

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