Free at last? Rescuing pro sports from the shackles of salary caps

Imagine an NHL or MLB or NFL set free from salary caps and luxury taxes. Imagine an unlimited number of teams trying to field the best squads, with some of those teams thriving and some dying, based on pure economics.

Imagine those innumerable surviving teams then divided into tiers of leagues depending on last season’s standings, with some fighting to stay in the top division and others battling to reach those heights — and no teams losing on purpose to better their chance at a top draft pick.

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That is how soccer is structured in Europe and, say the authors of Cap In Hand: How Salary Caps are Killing Pro Sports and Why the Free Market Could Save Them, how North American pro sports should be arranged.

The book is written by renowned journalist Bruce Dowbiggin and TRU law professor Ryan Gauthier.

The book essentially argues (and, I’d say, proves) that salary caps have not accomplished what they were intended to do — create an even playing field of parity.

Consider: the one pro league in North America with the freest market — Major League Baseball — is the one with the most parity in that more new teams tend to make the playoffs and win titles. The NHL, NFL and NBA all have more restrictive salary structures and far less parity.

Three years ago, Gauthier was teaching a sports-law course with former Vancouver Canucks’ general manager Mike Gillis, who connected Gauthier with Dowbiggin.

The book’s original idea was centred around the most important contracts in the history of sports.

“Bruce was really the driver of the idea to make it more about salary caps as well,” Gauthier said. “But, then, all the legal stuff, that’s really my bread and butter. A lot of the history, a lot of the cases.

“The owners are always looking to find ways to pay the players less, which makes sense. It totally makes sense from their standpoint.”

But they used to simply tell players they would not pay what players wanted, Gauthier said, or lie about what other players were earning. Today, he said, they couch it in terms of the need for a “salary cap,” “cost certainty” and “parity.”

“There’s no salary cap in Major League Baseball and we have a lot of parity,” Gauthier said. “And we have the NFL, which has the strictest salary cap, and we have the Cleveland Browns going 0-and-16 and the Patriots making the Super Bowl again.”

The book looks at contracts that have shaped and changed the game, including those involving Babe Ruth, Curt Flood, Catfish Hunter, Bobby Hull, Reggie White, Wayne Gretzky, Alex Rodriguez and Lebron James.

The chapter on Hunter tells of the landmark outcome: because Oakland A’s owner, the notorious skinflint Charlie Finlay, had violated the pitcher’s contract, Hunter, in 1974 became the MLB’s first free agent.

While teams worked overtime to pay their under-contract players as little as possible, it was thought owners would collude to keep Hunter’s salary manageable, with $250,000 to $350,000 a year expected in the way of offers.

There was shock when, in December of that year, the New York Yankees signed Hunter to a five-year deal worth $3.5 million, plus a $1-million signing bonus. That skyrocketed his annual average salary over that half-decade to $900,000.

The second and third parts of the book look at antitrust law, labour law in sports, the entry draft, free agency, gambling’s impact on sports and, of course, the salary cap in all its forms.

But Gauthier and Dowbiggin explain it all in such a breezy, interesting way that Cap In Hand will appeal to the sports fan with little knowledge of the business side of the game and those interested in the economics of major league sports more than the action on the field.

Back to the idea of introducing promotion and relegation in North American sports.

Gauthier said sponsorships and broadcast contracts in Europe largely the same as in North America. Perhaps Rogers buys the rights for the NHL Premier League and Shaw buys rights for the NHL Championship  (Second) League.

“It’s no different than, really, what you do now,” Gauthier said. “There might be the chance that Edmonton stinks and they get relegated and Rogers is upset and Shaw is happy. But that’s the market. You just account for that, like a big boy business.”

And, under that scenario, he added, tanking for a better draft pick would essentially be eliminated as teams near the bottom of each league’s standings would be fighting hard to avoid relegation. As a bonus, even teams relegated have a title for which to compete while attempting to earn promotion.

Cap In Hand is published by ECW Press in Toronto. Its cover price is $32.95. Chapters/Indigo offers it online for $29.65 and the Kobo ebook is $20.79.

© Kamloops This Week



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