Straight cash homie
Here’s a question for you, dear reader: Who do you think was the highest paid athlete in the world last year according to Forbes? If you didn’t guess a narcissistic prizefighter that just agreed to a bout with a Filipino politician, then you guessed wrong. Yes, Floyd “Money” Mayweather Jr. made $105 million last year. Didn’t get that one? Here, try this one: Who is the highest paid player in the NBA (based purely on salary)? If you guessed LeBron James, Carmelo Anthony, Chris Paul, or any of the other elite players in the NBA that don’t wear number twenty four, then you are wrong. Yes, Kobe Bryant. He of the shoddy knees and even shoddier franchise is number one on the NBA’s list. Number two? New York’s Amar’e Stoudemire, if you, like me, are struggling with this revelation, question former general manager Donnie Walsh.
Now, three of the four major professional leagues in North America have what is called a salary cap (trust baseball to be different). The salary cap, agreed upon as part of a collective bargaining agreement and subject to change depending on a myriad of factors, limits the amount of spending each team can do, and going through that proverbial ceiling can have substantial consequences. Take the NBA for example. Once teams spend more than $76.829 million then they are subject to the luxury tax. The tax, going up in increments as the violations become larger, is meant to reign in spending and keep teams on a reasonably level playing field. But what happens when there is no salary cap? In the past, soccer has been a great example of what can occur when sports owners are able to spend whatever they like to acquire talent and chase a championship.
In the soccer world (outside of North America and forgetting the financial fair play rules that govern UEFA, British, and French football) spending is rampant, often at a higher level than the revenues that are accrued by the owners. On Forbes’ list of the one hundred highest paid athletes in 2014, the second highest earner was Real Madrid’s Cristiano Ronaldo with an income of eighty million. Financial Fair Play (or FFP, for short) is soccer’s attempt at financial parity. What they are trying to defend against is a group of kajilionaire owners who are allowing their teams to function with massive deficits — why? Because they can — and winning championships without making much money. By operating this way, those teams who conduct themselves in a financially responsible manner (whatever that means in today’s sporting world) could get left behind. With just how flexible FFP is, with a team’s ability to spend tied to their revenue and not being an arbitrary number, the penalties can be a lot harsher than in North America’s salary capped world. Go over the limit in the NBA and you risk a hefty fine; have more than a forty-five million euro loss over three years while competing in the Champion’s League, and a team could find themselves suspended.
The argument for a salary cap goes something like this: Without a salary cap we (insert league name here) would become like (gasp) baseball. Small-market teams would be at the mercy of the financial behemoths of the world and us owners would have to fork over fair market value for our players. On the other side are the athletes themselves, wanting to get paid what they feel they deserve, regardless of arbitrary numbers and limits. Whenever money is involved so is an argument, and this particular one is not going away anytime soon.