Salary caps are a hot topic in sports, debated by the most casual of sports fans as well as in the highest tiers of professional clubs. The concept of enforcing a limit to how much a team can spend on athletes' salaries has been around at least since the Great Depression.

For most professional sports, teams must adhere to a predetermined amount of money to find and sign their players. This is determined by a somewhat complicated mathematical equation involving adding up how much money the league made in the previous year in ticket sales, merchandise sales, and television contracts, and then dividing that figure by how many teams there are in a particular sport.

Major league baseball is the only sport played in the U.S. that does not have a salary cap. In the U.S., football, basketball, and hockey national sports leagues all have them.

Highway Robbery, Minus the Highway

Anyone who's ever attended a professional sports game has probably felt like they paid a lot for their ticket. After all, you're only renting a space that's half the size you would take up if you were at home, and most people are getting a view that is worse than watching it on their own HDTV.

But everyone knows it's not about the seats; it's about the experience. So we pay.

But are the prices more expensive when there are no salary caps? Some research into the topic shows that ticket sales and merchandise sales aren't directly affected by salary caps.

Both tickets and merchandise are mainly determined by something much more basic—profits. According to a study by the University of Antwerp in Belgium, teams estimate the profits they want to make off of ticket sales, factoring in the demand for their team, and then set their prices based on those figures. ꧃R🧸esearch also has shown that the more a team wins, the more ticket sales go up.

Think ꩲof it this way: when a team has a stadium, workers, and players on their payroll, those costs are part of the total expenses, regardless if one or 30,000 fan🌟s show up to watch a game.

Salary caps, high or 💞low,🎃 do not have a trickledown effect to cheaper ticket prices.

What the Salary Caps Do Influence

Although salary caps don't directly influence merchandise and ticket prices, they do affect how teams acquire and retain athletes. The salary caps give teams in need of talent the opportunity to entice players away from better teams because all teams (theoretically) have the same amount of money to work with.

Instead of having some teams with deep pockets and some teams with little to spend on talent, all teams should have the same buying power and ability to build a strong franchise. That's the theory.

Obviously, capping the amount a team can spend on players affects how much athletes can earn in any given year. This can cause top-performing athletes to protest cap restrictions, with serious implications like player strikes.

Salary caps also affect how players get paid. When a multi-million dollar contract is awarded to a player, the salary isn't usually divided up evenly each year. A player may get less than a million dollars one year, more than a million the next, and then get the remaining millions he is owed during his third and fourth seasons.

This budgeting gives the team more room to get out of a contract and to be plan out how the team budget meshes with the actually salary-cap figures. Since this isn't the best set-up for players, teams may offer high-figure signing bonuses to key players, which may or may not be included in the overall salary cap structure.

Frequently Asked Questions

The Bottom Line

As the salary cap debate continues, it's good to remember that the professional sports industry is big business with tons of financial factors that influence how salaries are paid, how high ticket prices are set, and how salary caps are established.

But at the end✤ of the day, profits are what drive ticket prices because, in sports as in any b﷽usiness, it comes down to supply and demand.