The article doesn't mention salary caps which are used in some leagues to try to make sure most teams are competitive. Are salary caps socialist? Putting a hard cap on the total amount of wages that all workers put together can earn doesn't sound socialist to me. Doesn't sound capitalist either, sounds like a cartel.
Salary caps do seem to make for parity in the sports leagues that use them. Your medium size market team has a legitimate chance of winning a championship at some point in your life. The trade-off is that you never get to see the best players in the world playing for a championship. You see one or two of the best players on each team, and whatever other players the team could afford under the cap.
I wouldn't want there to be a salary cap on the company designing my next laptop.
Players in the leagues with caps are in a union. In exchange for the salary cap in question, they have things like minimum salaries, health benefits, guarantees about their working conditions, etc.
If you could guarantee that you and your colleague's salaries represented 50% of the revenue that the company collects, you would be in a much better place than many companies without a cap. If you and your colleague's could guarantee minimum salaries that can't be changed, you'd be in a good place. If you could guarantee working hours and conditions, you'd be in a good place.
Now, are there downsides? Absolutely! But those are the tradeoffs of union labor.
Ultimately sports makes money from entertainment which derives from competitiveness of the teams. If a team always dominates, it makes it predictable, no one watches their team fighting over second place. It’s a game and cap balances the game.
I feel like both outcomes are equally boring. Even as a New Yorker, you eventually get tired of the Yankees winning the World Series. On the other hand, the Giants, Jets, and Bills blowing it every year is also not that fun.
I would go even further and say watching sports is ultimately boring. There's pretty much nothing you can do to help "your" team to win (well not exactly true since you can often volunteer for "your" team to do some mundane work while the stars earn their millions, and you can buy merch and tickets to fund them too...).
Now don't get me wrong, I still watch sports every now and then. But I don't take it seriously like I did when I was a kid and didn't understand the grim realities of professional sports. It's fun to occasionally see peak human physical performance.
Salary caps aren't there to make teams competitive, it's to limit player expenses.
They also don't have the secondary effect of making the teams competitive.
Take a look at World Series Champions (MLB -- no salary cap) [1]; everybody memes that the Yankees win all the time but they haven't won since 2009 and before that 2000. There have also been 16 different winners in the past 23 years.
Take a look at Superbowl Champions (NFL -- has salary cap) [2]; 14 different winners in the past 23 years.
Take a look at Stanley Cup Champions (NHL -- has salary cap) [3]; 13 different winners in the past 23 years.
Only the league without a salary cap has the most different winners.
I think the salary cap does make it possible for any teams to be more competitive. The teams with the most wins since 2000 are the Yankees, Dodgers, Cardinals, Red Sox, and Braves. Three of those teams are the three biggest spenders in the league year after year. I think we can say with high confidence these three teams will have a better record over the next 20 years than the Pittsburgh Pirates or Detroit Tigers.
The salary cap doesn't mean that there is more parity, but overall it decouples the size of the city and the "luck" pretty well. The Chiefs are the best team in the NFL now - despite the fact they have a small market and an owner with little resources outside of owning the team.
They will be hard to catch up with because other teams aren't allowed to get ahead. That said, I think fans are more accepting of that because the reason is they drafted an exceptional player, rather than the Yankees who are hard to catch up with because they can continually spend on new players.
Somebody mentioned the "luxury" tax. I will just add that in the days before any of this was dreamt of, the Yankees won 10 World Series from 1947 to 1962, and 13 pennants.
There must also be something to having just a small roster in the NBA, that makes some of the best incredibly more impactful - such as Lebron or Curry. In the NFL the QB position has such an effect on the game (Brady, Mahomes). Mike Trout is one of the best players we will ever see in the MLB and they struggle to make the playoffs each year. Just spitballin'.
I agree, NBA is absolutely about putting two super stars together that will score 80% of your team points and giving them a supporting cast of low cost players. The game is just more about individual talent.
In the NFL QBs play and outsized role, but really the NFL is more about organization leadership. The well led teams with good owners hire good GMs who hire good coaches and draft well. It is an incredibly fair league because of the salary cap and draft process. Successes tend to be true organizational successes versus a single individuals incredible play.
Small market MLB teams have learned that they can make a run by losing year after year and building a pipeline of high draft picks, trade for a few key players, and try to make a playoff run before the young players rookie contracts expire and the music stops.The Yankees of the World have struggled to adapt to this because their fans expect them to be competitive every year. So they never get the high draft picks and are forced to pay multiple times the amount small market teams pay players to remain consistently competitive. It is predictable if you pay attention to where teams are in the rebuild / tear it down cycle.
Whatever the richest team in the league pay in salaries, half this value must be donated to the poorest team. Same for the second richest and the second poorest and so on.
Richest means the biggest payroll after the players are subscribed.
This could create a balance, since you can't spend too much without consideration the +50% penality. And the teams paying these values should consider it an investment in the quality of the league, which will increase overall returns.
What you're describing is a "luxury tax," and the MLB has it. It's something like 20% of the contract value over a certain payroll threshold, with increasing charges the farther above you get.
The money collected from that doesn't all go to the other teams, but a meaningful chunk of it does.
Whilst I'm not proposing a salary cap on companies. I also certainly wouldn't want all the world's best talent operating under the same company. There'd be no competition.
You'd also be restricting the capabilities of the talent themselves, since they're naturally going to have conflicting ideas and in a company with no competition, there's little incentive to try multiple approaches.
The issue is it turns player wages into a zero sum game. In the NFL, quarterbacks have been taking up a bigger and bigger percentage of the cap, while players in positions that don’t last as long (due to injuries or just aging out) make less as a result. Now, on one hand, it makes sense because QBs have been more impactful to teams over the last 25 years, but at some level, you have to respect players like RBs who take more hits, have shorter careers, and more medical issues after retirement are getting shafted.
What has happened to running backs has to be address in the NFL. It is probably the worst position in football. Your body takes an incredible amount of punishment and you are typically washed up by the end of your rookie contract. Only the truly top running backs manage to get a decent second contract.
Salary caps do seem to make for parity in the sports leagues that use them. Your medium size market team has a legitimate chance of winning a championship at some point in your life. The trade-off is that you never get to see the best players in the world playing for a championship. You see one or two of the best players on each team, and whatever other players the team could afford under the cap.
I wouldn't want there to be a salary cap on the company designing my next laptop.