Topic > Consequences of abolishing the salary cap in the NFL

10 years later, this court ruling was detrimental to the NFL as it worsened the league's competitive balance, slowed the growth of player salaries, and hindered The growth of the league's market capitalizationBy abolishing the salary cap, the Justice Department's ruling had a substantial impact on the competitive balance of the NFL. Since the salary cap has been removed, teams in big markets, or that had deep-pocketed owners, have spent money rampantly over the past 10 years. Small market teams have been marginalized to the point where they have very little chance of winning, as they cannot afford to spend freely on talent, as they lack the revenue potential to make money. This progression is similar to what we have seen over the years in professional football, particularly in the UEFA Champions League and Spain. In the UEFA Champions League, 12 teams have combined to win 48 out of 58 championships, or 82.76% of championships. There has been such a lack of competitive balance in revenue sharing and salary-cap free football that even among the best teams in the world there is great disparity. An even more extreme example can be found in the Spanish La Liga, where the top 2 teams have won 65.85% of the league's 82 championships and the top 5 teams have won 93.9% of the championships. This lack of competitive balance is certainly caused by the lack of salary cap, as the top 2 teams spend up to 190,000,000 euros per year on players, while the lower tier teams spend up to 14,000,000 euros per year year for players. The NFL's continued revenue sharing, however, has meant that the disparity in the league is not as great as in professional football. Despite these effects of revenue sharing, the lack of a salt...... middle of paper...... mirrored that of MLB, another professional sports league without a salary cap. The continuation of a revenue-sharing system makes the NFL's market capitalization growth lag behind that of other salary-cap-less leagues like MLB because it reduces the ability to capitalize on lucrative television deals. Furthermore, the reduction in product quality (a result of shifting competitive balances) slows the growth of the league's market capitalization compared to the rate at which it was growing before the court ruling. All in all, this court ruling was bad for the NFL because its abolishment of the salary cap, but not revenue sharing, generated a worse product than would have been produced had there not been a ruling, which pays the fewer players than it should have. if there had been no ruling, and that makes the teams less valuable than they would have been if there had been no ruling.