Eli5 Professional sports salary caps


I read about some new salary cap “curtains” in the NBA next year and realized I don’t understand the NBA salary cap or MLB or NFL. Would someone please elaborate on them for me.

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The rules and penalties for each league are different. For NFL and NBA all teams have a maximum amount of money they can spend on players salary you can not go above that. Anything above that and they receive hefty penalties and fines. For MLB I believe they have something different that is called a luxury tax which means that if you spend more than certain amount of money in players salary you have to pay a “tax” it sounds the same but for NBA & NFL you have to comply with the salir y cap. For MLB the luxury tax is there to discourage teams from spending but it doesn’t it prevent it. For NFL and NBA is meant to keep the over spending from happening.

The point of salary caps is to encourage equality between the teams and therefore make the games more competitive and more exciting. A team can only spend a specific amount of money on all of their players. Some sports use hard salary caps, some use caps that have exceptions, some don’t use caps at all.

In some sports – such as the NFL – there are salary minimums. Those exist to a) keep player salaries higher and b) prevent some owners from getting the benefits of being in the league (TV money, mostly) while spending as little as possible on their teams.