Sports and the Economy

In class on March 15th, we discussed how both Sport and the economy go hand in hand with one another.  Money has ultimately become the foundation of sport at all levels, with profit and money being the primary motive that shapes both owners and athletes alike.  To ensure competitive balance and to keep cost down, most leagues institute a salary cap, which is a limit on which a team can spend on player's salaries.  The NHL has a cap ranging from 40.7m-56.8m, the NFL 112m-127m and the NBA with a soft cap of 59million.  The MLB is currently one of the only large market sports without a salary cap. An ESPN.com article discusses some of these same concepts, as they present the idea of baseball implementing a hard cap in the near future.  They state the obvious that baseball is a league where the same teams continue to have success due to their city market value.  Teams like the Yankees and Braves have never missed the postseason under the new salary cap rule, while small market teams like the Pirates and Royals don't have the necessary funding means to compete.  The Tampa Bay Rays recently have put to rest this notion that small market teams can't compete with the "big boys" with 3 straight post season appearances including one American League Pennant. One fact to consider is that when the majority of their star players became free agents, they were almost forced to trade them or let them walk to different teams in order to save money.  With so much money in professional sports, there is indeed a way to strike up a prospective collective bargaining agreement in which teams can build around a set salary limit, so that every team has a fair chance to compete and sign/retain any player of their choice.

http://sports.espn.go.com/espn/page2/story?page=betweenthenumbers/salarycap/060405