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Salary Cap Sports: Has it Worked?

The salary cap for professional sports has always been a hotly debated topic. Many of the people in favor of the salary cap have argued that it is a way of leveling the playing field for all competing teams and gives even the low budget, small market teams a chance at competing for a championship. Opponents of the salary cap think that it is a way for owners to keep money out of the hands of the players and keep it for themselves. Some of the questions I will explore in this article include: Has parity been affected due to the implementing or exclusion of a salary cap? What teams have benefited the most or the least from the cap situation? Should the cap be expanded or reduced? I will look at other aspects as well. Buckle up.

How This Began

This research began because of my interest in how the four major sports league in North America, as well as college football and basketball, and my curiosity in the variance of champions in those six sports. In order to get a data set, I had to set a parameter for where to start. I set this by looking at what point did the 4 major sports start to look the most like they do today. I determined this to be the merger of the NBA and ABA in 1976. I chose this because at this point, the Super bowl and NFL had been established for some time, the NHL was coming of age and becoming more like the game we watch today, and baseball was thriving. Basically, it’s the modern age of sports start point.

I first looked at the parity in each league. How often was a unique team winning the title? All leagues have around 20 teams at the start of the data set and have expanded tenfold since. I knew some would be low and some would be high percentages based on prior knowledge of champions. I simply divided the number champions in each respective league by the number of seasons. Here were the results:

  • NBA: 14 teams in 40 season = 35%
  • NHL: 16 teams in 39* seasons = 41%
  • NFL: 16 teams in 40 seasons = 40%
  • MLB: 21 teams in 39* seasons = 53%
  • CFB: 20 teams in 40 seasons = 50%
  • CBB: 19 teams in 40 seasons = 48%

* league with cancelled championship due to work stoppage

I was not surprised to find that the NBA had the least amount of variance. The Lakers, Celtics, Spurs, and Bulls have dominated the landscape in terms of titles since the merger. The next two lowest leagues in terms of title variance were the NFL and the NHL respectively. The NHL saw a huge increase in variance in the 90s as the NFL has seen little variance difference. The New England Patriots have won 5 Super bowls since 1976, the most of any team. that accounts for almost 20% of all the NFL titles. The Broncos, Steelers, 49ers, Redskins and Giants have all won at least 3 Super bowls in that same time span.

On the contrary, The MLB, and major college sports have seen the most variance since the NBA-ABA merger. This was a major surprise to me. These sports are notorious for top heavy, power teams or leagues with repeat champions in conference play. Because of these stats, I then went back into the spreadsheets to look at before and after for leagues with a salary cap in order to see if the variance in the NHL, NFL, and NBA have improved since the implementation of the cap. Here’s what the numbers looked like:

Before Cap

  • NBA: 6 teams from 1977-84 =  75%
  • NHL: 11 teams from 1977-2004= 40%
  • NFL: 7 teams from 1977-94 = 43%

After Cap

  • NBA: 10 teams from 1984 to present= 30%, -45%
  • NHL: 7 teams from 2005 to present = 53%, +13%
  • NFL: 14 teams from 1994 to present= 58 %, +15%

The NBA has clearly trended in the wrong direction since the implementation of the salary cap. I will grant them them small sample size of 8 years for the “before cap” data set but when we expand that out, the parity decreases. The Boston Celtics dominated the early landscape of the NBA. Parity did not exist in the NBA in the early days. The NHL and NFL are trending in the right direction. The NHL has a very young salary cap and it is arguably the most unforgiving one in all of sports. It has allowed teams who have never won a cup before (Carolina, Anaheim, LA) or teams who have not won in decades ( Boston, Chicago, Pittsburgh) to be competitive with the likes of Detroit and Montreal. The NFL data is skewed because of Tom Brady and Bill Belichick, both generational, hall of fame NFL icons who have led the Patriots to an ungodly stat line since 2001. It will be interesting to see the NFL landscape after both or one of them retires. The NFL has trended to more parity even with these two legends leading the way so I expect it to increase as time goes on.

Why the Cap?

Based on the numbers, the cap is not a guarantee that parity will increase significantly. Why then, does the cap exist? The answer is the owners. A salary cap is, exactly what it sounds like, to a populist, a way to suppress wages. Without a strong players union, owners keep salary caps so they can not pay market value for a superstar. In baseball, with no cap Giancarlo  Stanton and David Price command contract upwards of $30 million a year because teams are not only paying for their on field services, but increased promotional revenue as a result of them being on their teams. Tom Brady, Sidney Crosby and Lebron James have their sports earning potential capped on their respective teams and, without question, would command similar salaries if the cap was taken out of those sports. For the owners, a cap makes the most business sense and it dupes the public into thinking the league is aiming for more parity.

It will be interesting to see where the trends go in the future. As of this writing on May 23, 2018, The NBA has only teams who have won before in their final four and the NHL has at least a 50% of having a first time winner with Vegas in the final.

Thanks for reading,

Foz

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Obligatory NFL Divisonal Round picks column

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(Let’s hope this year’s Packers v Cowboys game is as entertaining as the one from 2015)

 

New England over Houston 34-10: Easiest money for the weekend. Patriots not only win easily at home, they probably cover a historically large spread too against the worst team to ever win a playoff game. Make it 7 straight AFC title games for Brady and the Patriots.

 

Kansas City over Pittsburgh 24-18: Kansas City finally gets over their home playoff hump and keeps Pittsburgh at bay. Their defense/special teams are just too opportunistic. I expect this to be visible as Big Ben has struggled away from Heinz Field this year. Costly turnovers haunt the Steelers in this one as Smith game manages his way to another title game.

 

Atlanta over Seattle 35-31: The team that kicks the field goal always loses. This time, it’s Seattle. Their offense just won’t be able to keep up and overcome the defensive loss of Earl Thomas. Ryan will finally get over the hump and win a game he’s supposed to at home in the playoffs.  Quinn and Shanahan should have a great gameplan in place for this one and barring a Dan Quinn game mismanagement, Atlanta will move on.

 

Dallas over Green Bay 31-30: Dalla is going to have to put up points and lots of them to win this one. Green Bay is hot but without Jordy, Rodgers has classically struggled. This is a little factor but I’m going to go out on a limb and say Mike Mccarthy has his Grady Little moment in this one. He will leave that one point on the board somewhere whether it’s an ill advised fourth down attempt or bad play calling deep in his own end. He will be the goat in this one as Dallas survives and advances.

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