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The Impact of Salary Caps in Professional Team Sports

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  • Stefan Késenne

Abstract

In this paper we analyse the impact of a salary cap on a professional team sports league. We concentrate on the competitive balance, on the level and the distribution of player salaries, on owner profits and total league revenue. A simple model shows that a salary cap can improve the competitive balance among clubs as well as the salary distribution among players. We also investigate how the recent individual salary cap in NBA might affect the competitive balance.

Suggested Citation

  • Stefan Késenne, 2000. "The Impact of Salary Caps in Professional Team Sports," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(4), pages 422-430, September.
    • Handle: RePEc:bla:scotjp:v:47:y:2000:i:4:p:422-430
    DOI: 10.1111/1467-9485.00171
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