In professional sports, as in all businesses, labor disputes are usually a zero-sum game. The players want as much money as possible, and the teams want to keep it for themselves. Any rule that the league tries to institute to encourage fiscal discipline is bound to face fierce resistance from the players union. The current salary cap for each team is a prime example. Teams want to spend as little as possible on players salaries, and want penalties to help them restrain themselves, while players want teams to be free to spend as much as possible. The key is to find a rule that will increase most players' salaries, even as it lowers teams' payrolls. In other words, lower the mean salary even as you raise the median salary. While that may seem impossible, the great disparity in salary between the highest paid athletes and those who receive the league minimum gives room to maneuver.
An elegant solution is to institute a team player salary minimum. Each player on a team must be paid a minimum percentage of the team's total payroll. The salaries of the superstars would diminish, as the cost of acquiring them would include the added expense of increasing everyone else's salary on the team. Meanwhile, the players lower down on the totem pole would all see an increase in salary. It is clear this would increase the salary of far more players than it diminishes, thereby increasing the median salary and insuring the support of the players union.
It may also quite possibly save teams money. There would be far fewer bidding wars over superstars, since the cost of acquiring them would much greater. Instead, there would be more competition for the slightly better than average players, which is a more efficient market, and one in which teams are less likely to vastly overpay. While the salaries of the top players would drop drastically, the salaries of the average players wouldn't rise that much. If the proper minimum percentage per player were chosen, it may be possible to lower payroll expenses overall.
Even if the numbers don't work out for this particular plan, the general strategy of limiting the top salaries by a mechanism that explicitly raises the salaries of the more numerous lower rung players is bound to be a winning one. For example, a penalty tax can be levied on the portion of all salaries that is above the 85th percentile, with the proceeds distributed among all players in the bottom 60%. Such a rule would increase the salaries of more players than it diminishes, even as it lowers overall team spending.
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I like the idea. No matter how good a player is, he/she can't play well without the co-operation of the other layers who are receiving lesser pay. But the captialist market doesn't work like this. We go by the supply and demand rule.There is less demand for the below average player, hence their pay will be lower and vice versa.
If the minimum percentage salary theory apply, the lower pay players will have lesser incentive to improve themselves and put more time in training because the salary increments are small. To some extent, this is moving towards the communist theory that everyone gets the same pay no matter how much effort they put in a job.
I think that this might work (in which case, the criticism above apply) if sport salaries were in fact a zero-sum game.
It seems over recent decades, that as salaries rise, the leagues simply extract more money from the networks who televise their games.
If total revenues could not grow in this way (and it seems, in just the last year or two, money-losing broadcast networks are now thinking of not renewing contracts at ever-higher rates), then this might work.
But then you are at the above point: would Michael Jordan's former teammates have deserved more money because Jordan was on their team, than they would before/after his retirements?
I like Performance Based Wages. Wherever it can be implemented, I think it's a great idea. People that produce more should get paid more. But not just in one area of performance. There are many factors in an employment situation to include:
social factors that promote a cohesive and productive atmospherecontributions to generate corporate income (new products, sales, ...)contributions for saving money (Six Sigma process improvements, ...)
So long as all factors are included, to include areas where the manager hinders productivity (if a manager witholds opportunity from an employee, the employee should not disproportionately incur penalty), then performance based wages are a great concept for doing business.
This is a great idea! There is no resemblance to communist theory here. That comment is ridiculous. They already have mins and maxes is sports. This just adds that concept to the team level. Every year in the NBA the max and min salaries are raised and remain the same percentage apart. I would have this affect the median not the minimum to prevent players just coming up from being de-motivated. This way minor leaguers wouldn't want to play for certain teams more. Let's take the Yankees for example, there median salary is 6.7% of A-Rod's 28 mil salary. If you raised that to 10% then they would have to either lower A-Rod or raise others. If it worked this way chances are it would have the effect of the NBA salary cap. Where the player median is higher and the maximum is lower relatively. The gap between the players is closer even though the minimum is the same.