Question

Explain the concept and purpose of the professional sports team salary cap. Also explain the difference between a franchise owned professional sports team and an individual/group owned team. How does each type of ownership affect both player profit sharing as well as the salary cap?

Answer 1

answer-

The term salary cap is used to define a league sanctioned payroll limit which restricts the amount of money professional sports teams can spend on player salaries. the purpose is that a cap on salary spending prevents more lucrative franchises from stockpiling talent, thereby placing teams with smaller payrolls at a competitive disadvantage. This concept operates under the theory that each team in a league would only be able to afford a handful of "superstars," while rounding out their rosters with average players.

the ownership and structure of a sports team is an incredibly important component. Some teams are privately owned by a single person, with varying degrees of direct control over their team. Other teams are publically owned and traded, and the shareholders are the owners of the team (many teams still retain a chairman to conduct inter-team affairs). While both structures have their pros and cons, it is ultimately the privately-owned teams who have the most success financially.

Private owners are also more open to outside advertising. Once again, advertisements are a fan’s nightmare, but they also generate even more revenue for a team. Owners are commonly criticized for only caring about money instead of fans, but the wealthiest teams attract the best athletes.

each type of ownership affect both player profit sharing as well as the salary cap like in private ownership, team players were given good amount of money and salary to spend on their trianing and growth while A salary cap places greater impetus on how franchise's spend money. This results in fewer and fewer franchises dedicating large portions of their payroll to unproven players and instead dividing their salaries evenly across athletes who are more adaptable and compatible to their organizational systems. Salary cap proponents insist that the system promotes wiser spending habits, spurns more in-depth scouting and player injury prevention. Without a limitless button for franchises to simply throw money at their problems, the focus instead shifts to problem prevention.