SPORT MANAGEMENT ESSAY 2
A “hard salary cap” is more successful in increasing competitivebalance level in baseball when compared to a “50-50 gaterevenue-sharing plan”.
Gate revenues refer to a small amount of all the money earned duringprofessional sports. Supposing there was a 50-50 plan of sharing themoney, still some teams will continue to have more incomes. Even withequal sharing, players continue to follow the similar teams theywould have selected without such a plan to share revenue. Equalsharing of revenue means that the teams successfully collect alltheir earnings and make equal divisions to all members. When teamswork on increasing their profits, the outcome is an increase in totalearnings. Given the scenario that, a professional player has morevalue when in Los Angeles as compared to playing in Cleveland, theamount to share increases. As a result, the profits made by Clevelandand Los Angeles increases with the player’s move to Los Angeles.This only means that the 50-50 plan will have minimal effect on howtalent becomes distributed as well as competitive benefit. On theother hand, a hard salary cap restricts the amount that can be paidto a player by its team. Even when the player from Cleveland is worthmore in Los Angeles, the latter is incapable of luring the playerwith more revenue. A hard salary cap means that Los Angeles cannotspend more on the player. The cap creates a balance on the amount ofspending for players. Hence, acts as a way of balancing teams. Inaddition, caps make it possible for small teams to compete resultingin a competitive balance, and eventually profit the league as awhole.