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In professional sports, a salary cap is an agreement or rule that places a limit on the amount of money that a team can spend on players' salaries. It exists as a per-player limit or a total limit for the team's roster, or both. Several sports leagues have implemented salary caps, using them to keep overall costs down, and also to maintain a competitive balance by restricting richer clubs from entrenching dominance by signing many more top players than their rivals. Salary caps can be a major issue in negotiations between league management and players' unions because they limit players' and teams' ability to negotiate higher salaries even if a team is operating at significant profits, and have been the focal point of several strikes by players and lockouts by owners and administrators.
In professional sports, as opposed to amateur sports, participants receive payment for their performance. Professionalism in sport has come to the fore through a combination of developments. Mass media and increased leisure have brought larger audiences, so that sports organizations or teams can command large incomes. As a result, more sportspeople can afford to make sport their primary career, devoting the training time necessary to increase skills, physical condition, and experience to modern levels of achievement. This proficiency has also helped boost the popularity of sports. In most sports played professionally there are many more amateur than professional players, though amateurs and professionals do not usually compete.
A head coach, senior coach, or manager is a professional at training and developing athletes. They typically hold a more public profile and are paid more than other coaches. In some sports, the head coach is instead called the "manager", as in association football and professional baseball. In other sports, such as Australian rules football, the head coach is generally referred to as the senior coach.
Amateur sports are sports in which participants engage largely or entirely without remuneration. The distinction is made between amateur sporting participants and professional sporting participants, who are paid for the time they spend competing and training. In the majority of sports which feature professional players, the professionals will participate at a higher standard of play than amateur competitors, as they can train full-time without the stress of having another job. The majority of worldwide sporting participants are amateurs.
A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis. Salary can also be considered as the cost of hiring and keeping human resources for corporate operations, and is hence referred to as personnel expense or salary expense. In accounting, salaries are recorded in payroll accounts.
A luxury tax in professional sports is a surcharge put on the aggregate payroll of a team to the extent to which it exceeds a predetermined guideline level set by the league. The ostensible purpose of this "tax" is to prevent teams in major markets with high incomes from signing almost all of the more talented players and hence destroying the competitive balance necessary for a sport to maintain fan interest. The money derived from the "tax" is either divided among the teams that play in the smaller markets, presumably to allow them to have more revenue to devote toward the contracts of high-quality players, or in the case of Major League Baseball, used by the league for other pre-defined purposes.
Semi-professional sports are sports in which athletes are not participating on a full-time basis, but still receive some payment. Semi-professionals are not amateur because they receive regular payment from their team, but generally at a considerably lower rate than a full-time professional athlete. As a result, semi-professional players frequently have full-time employment elsewhere. A semi-pro player or team could also be one that represents a place of employment that only the employees are allowed to play on. In this case, it is considered semi-pro because their employer pays them, but for their regular job, not for playing on the company's team.
Per diem or daily allowance is a specific amount of money that an organization gives an individual, typically an employee, per day to cover living expenses when travelling on the employer's business.
Scott Dean Boras is an American sports agent, specializing in baseball. He is the founder, owner and president of the Boras Corporation, a sports agency based in Newport Beach, California, that represents roughly 175 professional baseball clients. Since 2013, Forbes magazine has named Boras the "Most Powerful Sports Agent in the World." In 2019 and 2022, contracts signed by his clients totaled more than $1 billion in the month of December.
The Major League Baseball draft is the primary mechanism of Major League Baseball (MLB) for assigning amateur baseball players from high schools, colleges, and other amateur baseball clubs to its teams. The draft order is determined based on a lottery where the teams who did not make the postseason in the past year participate in a state-lottery style process to determine the first six picks, starting in 2023. The team possessing the worst record receives the best odds of receiving the first pick. Until 2022, it was determined by the previous season's standings, with the worst team selecting first.
The NBA salary cap is the limit to the total amount of money that National Basketball Association teams are allowed to pay their players. Like the other major professional sports leagues in North America, the NBA has a salary cap to control costs and benefit parity, defined by the league's collective bargaining agreement (CBA). This limit is subject to a complex system of rules and exceptions and is calculated as a percentage of the league's revenue from the previous season. Under the CBA ratified in July 2017, the cap will continue to vary in future seasons based on league revenues. For the 2022–23 season, the cap is set at $123.655 million.
In Major League Soccer (MLS) and the National Women's Soccer League (NWSL), the two top-tier professional soccer leagues in the United States, allocation money represents an amount of money that teams can use to sign players or allocate to their salaries in order to remain compliant with the leagues' salary caps.
The Designated Player Rule, nicknamed the Beckham Rule, allows Major League Soccer franchises to sign up to three players that would be considered outside their salary cap. The rule, which was adopted ahead of the 2007 MLS season, enables teams to compete for star players in the international football market. The rule is one of two mechanisms by which MLS teams may exceed their salary cap, the other being allocation money. As of December 2019, there have been 209 Designated Players in league history.
Major professional sports leagues in the United States and Canada traditionally include four leagues: Major League Baseball (MLB), the National Basketball Association (NBA), the National Football League (NFL), and the National Hockey League (NHL). Other prominent leagues include Major League Soccer (MLS) and the Canadian Football League (CFL).
The NHL salary cap is the total amount of money that National Hockey League (NHL) teams are allowed to pay their players. It is a "hard" salary cap, meaning there are no exemptions.
A thirteenth salary, or end-of-year bonus, is an extra payment sometimes given to employees at the end of December. Although the amount of the payment depends on several factors, it usually matches an employee's monthly salary and can be paid in one or more installments. The thirteenth salary is most prominent in Latin America, where this payment is mandatory in most countries. In countries where the bonus is required by law, all employees usually receive it if they have worked for the company for a certain required amount of time. However, freelancers and contract workers are often not entitled to the 13th-month pay. Employees who have not worked for the company for a year often receive a prorated amount.
Major League Baseball (MLB) has a luxury tax called the "Competitive Balance Tax" (CBT). In place of a salary cap, the competitive balance tax regulates the total sum of money a given team can spend on their roster. Salary caps are common across professional sports leagues in the United States. Without these measures, teams would not be restricted on the amount of money spent on players' salaries. Therefore, teams with greater funding or revenue would possess a competitive advantage in their ability to attract top talent via higher salaries.
Gender pay gap in sports is the persistence of unequal pay in sports, particularly for female athletes who do not receive equal revenue compared to their counterparts, which differs depending on the sport. According to the research conducted by BBC, "a total of 83% of sports now reward men and women equally". However, it does not mean that the wage gap in sports has narrowed or disappeared. In 2018, Forbes released the list of the top 100 highest-paid athletes, all of them being male athletes. A similar situation also occurred in 2017, where there was only one female athlete – tennis player Serena Williams — who joined the list and ranked No.56. Billie Jean King brought awareness to the issue of unequal pay in the early 1970s, when she was awarded $2,900 less than her male counterpart at the Italian Open. The timeline of the gender pay gap in sports displays the significant events that have occurred since the 1970s.
References
- ↑ "Baseball Signing Bonus". Baseball-almanac.com. Retrieved 19 November 2019.
- ↑ "Aaron Rodgers, Khalil Mack lead 2019 All-Paid Team". NFL.com. Retrieved 19 November 2019.
- ↑ Beck, Jason (30 June 2020). "Tigers, top pick Torkelson agree to deal". MLB.com. Retrieved 1 July 2020.