Salary caps already exist in major American professional sports such as football, basketball, and hockey. Every franchise receives a limited sum of money for clubs to pay salaries to their players. Taking into account that all players receive different sums in their paychecks, the cap does not impose any limit for an individual’s salary. Instead, clubs need to think carefully about how they divide given money between players and how many top stars they can afford.
Imposing a salary cap makes sense for most team sports with many talents and competition. In the first place, average players will try to stay competitive towards their high-ranked colleagues. Clubs will tend to spread money more evenly not to discourage average players from doing their best. Besides, if there were no salary caps, the most lucrative franchises would stockpile talents, and less successful clubs will be pushed backwards with their average players. Limited funding will also increase competition among teams in the entire league. It is also important that caps induce clubs to spend money more responsibly. For example, football clubs pay greater attention to prevention of injuries to avoid huge expenses.
It seems that salary caps are essential in sports where wages can be enormous. Limits promote leveling of salaries and a wise financial management.