special report
8 Obiter Dicta
An Idiot’s Guide to Salary Caps
How much are sports figures being paid, and who controls
their salaries?
H
gleb matushansky › staff writer
aving recently participated
in the Hockey Arbitration
Competition of Canada, I realized I knew almost nothing
about the NHL salary caps. Below is my
“idiots guide to salary caps,” for anyone
else who might have been living under a
rock.
A salary cap is an agreement or rule that puts a limit
on the amount of money a team can spend on player
salaries. The cap can be in the form of a per-player
limit, a total limit for the team’s roster, or a combination thereof. Several sports leagues, especially in
North America, have implemented salary caps to keep
overhead low and to ensure parity between teams,
to encourage competition and to allow less-wealthy
teams to sign top players. Salary caps can be a major
issue in negotiations between league management
and players’ unions through arbitration, notably
leading to strikes by players and lockouts by owners.
Examples of salary cap systems include the NHL, NBA,
MLS, CFL and others.
The benefits of salary caps are the promotion of
parity between teams and controlling costs. The
salary caps prevent wealthy teams from signing too
many star players that end up sitting on the bench
simply so that opponents don’t get them. With the
salary cap, each club has roughly the same economic
power to attract players. This plays into the mission of
the various leagues and sports in general - to ensure
a quality spectacle that is not a foregon