sports idea: salary cap & trade

[© tweed]

just thought of this.  I tend to not be a proponent of salary caps.  under a salary cap and trade system teams would be able to trade for or trade away part of their cap space.  for example let us say that the NFL institutes this system and the hard cap is set at $100m.  the Patriots and Panthers could reach an agreement that sends $10m of cap space in 2011 from CAR to NE in exchange for a draft choice and punter Chris Hanson.  other kinks could be built in, such as taxing teams for every dollar spent above the designated x hard cap amount, or something.

pros/cons?  it seems like a way to even the economic playing field while limiting the negative impact on player salaries.

[jokerman]

I don't think teams need to be equalized by any salary cap, by any method.

However I do think the current system actually drives already poor teams into the ground, by forcing them into throwing massive amounts of money into risky players.  An NBA style draft system is preferable.

[phk]

Free agency would result in the best outcome from a Pareto efficiency PoV.

Most sports stars actually are underpaid from the V*MPL = w (for sports stars its <w),economics condition since sports leagues and team owners function as monopsonies for the most part.



Free agency will allow for movement from Em to E-bar (Epc) and from Wm to Wpc.