There are many ways leagues can implement a salary cap across teams in a league. The closest thing European soccer has to a salary cap is Financial Fair Play, which states that no team can spend more than they make in a year. The NBA implements a “soft” salary cap, which, as the name suggests, sets a soft limit on total team salary; however, if team owners want to contribute their own money to player salaries, they are welcome to do so (Miller 2018). This means that the salary cap in the NBA is more of a guideline and less of a restriction. As a result, owners with more money can spend more on their players, leading to some salary imbalances within the league. In the 2018-2019 season, the ratio between the highest paid team (Oklahoma City Thunder) and lowest paid team (Atlanta Hawks) in the league was 1.98 to 1 (sportingintelligence.com 2018). This is a significant difference, but it is not nearly as severe as the difference in leagues without a salary cap restriction.
The NBA also implements a salary floor that states teams must spend at least 90% of their salary cap by the end of the season (Miller 2018). This prevents franchises from trying to maximize profits by spending significantly less on player salaries. In turn, this leads to a more competitive league where any team can win on a given night. The salary floor rarely needs to be enforced as 23 of the 30 teams had a total team salary that exceeded the salary cap in the 2017-2018 season (Miller 2018). While this system is not perfect, it does have a positive effect on the equality of the league from top to bottom. There are certainly teams that reach the NBA Finals multiple years in a row; however, these dynasties do not last nearly as long as they do in European soccer.
From 2015-2018, the matchup in the NBA Finals was between the Golden State Warriors and Cleveland Cavaliers. In 2019, the Cavaliers did not even make the playoffs and in 2020, the Warriors had the worst record in the league before the season was suspended due to the coronavirus. In the past 10 seasons, 7 different teams have won the NBA title and 29 of the 30 teams in the league have made the playoffs (Nba & Aba Champions). Admittedly, 16 of the 30 NBA teams will make the playoffs each year, but it is indisputable that there is much greater competition for the trophy than in any of the 5 major European soccer leagues.
Unlike the NBA, the NFL imposes a “hard” salary cap on its teams, meaning that teams are not allowed, under any circumstances, to spend more than the league limit (Barrabi 2020). Like the NBA, the NFL also imposes a salary floor at 89% of the salary cap, narrowing the range of acceptable totals for team salary in the league (Barrabi 2020). This has led to a smaller ratio of 1.38 to 1 between the highest paid team (Jacksonville Jaguars) and the lowest paid team (Seattle Seahawks) in the league for the 2018-2019 season (sportingintelligence.com 2018). The Jaguars finished the 2018-2019 season 6-10, missing the playoffs, while the Seahawks finished the season 11-5 and won a playoff game. When a salary cap restriction is added to a league, total team salary becomes less of a factor in determining success. Since most teams pay players roughly the same amount, all teams have quality players, leading to more fair and equal competition.
There have been 10 different Super Bowl champions in the last 12 seasons, with the New England Patriots being the only team to win multiple titles (Super Bowl Winners 2020). Like in the NBA, this diversity indicates a competitive league where multiple teams are legitimate title contenders in any given year. There are some structural differences between the American leagues discussed above and European soccer leagues, mainly the use of a playoff system to determine a champion, but nonetheless, even regular season standings fluctuate frequently in both the NBA and NFL. When comparing these salary capped leagues to leagues like La Liga, where Barcelona and Real Madrid have combined to win 14 of the last 15 titles, it is clear that a salary cap leads to better competitive balance within a league. Personally, I believe that leagues with more equal competition are more entertaining to follow and watch. This may not be everyone’s perspective, and if you enjoy watching one or two teams dominate a league, then not restricting team salaries is the better option. However, if you would rather see more competition and drama in European soccer leagues, then a stricter salary cap must be implemented to mitigate the overwhelming advantage given to wealthier clubs under Financial Fair Play.
Barrabi, Thomas. “How Does NFL’s Salary Cap Work?” Fox Business, Fox Business, 19 Mar. 2020, www.foxbusiness.com/sports/nfl-salary-cap-rules-explained.
Miller, Kerry. “How NBA Free Agency, Salary Cap Work.” Bleacher Report, Bleacher Report, 7 Aug. 2018, https://bleacherreport.com/articles/2787871-how-nba-free-agency-salary-cap-work
“NBA & ABA Champions.” Nba & Aba Champions, Basketball Reference, www.basketball-reference.com/playoffs/.
sportingintelligence.com, “Global Sports Salaries 2018” Survey. 2018. https://globalsportssalaries.com/GSSS%202018.pdf
“Super Bowl Winners.” Topped Sports, Topped Sports, 2020, https://www.topendsports.com/events/super-bowl/winners-list.htm