Ok, here's my little diatribe on salary caps:

If we are such a capitalistic society, then why do our sports teams want to integrate socialistic financial practices?

IMHO, player's salaries being out of control isn't the player's fault, it's the owners who pay them those salaries. Sure a player can ask for a ton of $$$, but it's the team who decides to sign them for that $$$, negotiate, or tell the player to take a hike. If the owners can't control their spending, I don't see why the players should have a hard limit put on them. I don't buy for a minute the BS about a team not being able to compete on a financial level. If that owner doesn't have the business plan to support a major league team, he needs to sell to someone who does. It isn't a right to own a major sports franchise, it is a business. If you can't run the business in a profitable manner, then you shouldn't be in that business. If another team has more money to spend than you do, then that's just the way it is in business.

I've never understood this deal about having all of the teams having to have a level financial playing field. It doesn't happen in any other industry, so why is sports different?

Because we aren't capitalist, we just pretend to be. Nearly every sports franchise is getting extra tax incentives and breaks that other businesses are not getting, and individuals certainly aren't getting. Our government forces some monopolies upon us, which is certainly not capitalist. Governments give "tax incentives" to lure a particular business to their area, which they aren't extending to all businesses in the area. The concept of a "free market economy" is merely that, a concept, and is not a reality. They put artificial limits on business all of the time, which is not capitalist.

If you can't run the business in a profitable manner, then you shouldn't be in that business. If another team has more money to spend than you do, then that's just the way it is in business.

Do you mean profitable or successful manner. Many teams are deciding to be profitable, but then the can't be successful.

There is a major disconnect between capitalism and sports. Sports can rarely be treated or compared to other businesses. Like Henry said, do you want sports franchises to be profitable (financial) or sucessful (comeptitively within the sport). Those two concepts are rarely connected.

Capitalism, in theory, for businesses work. We want to reward businesses that innovate and work hard to be successful. We think that they should be allowed (within reason) to compete agressively and be rewarded for their innovation, hard work, what have you. The strong survive and the weak perish. Darwinism at its finest.

In many ways we don't want that from our sports. Sure, good drafting, talent analysis, coaching, player management, etc. should all be rewarded. If an organization puts all those things together, say like the Patriots, yes they should be successful. We want to see teams that draft well, are well-coached, and play well win. They should. What we don't want to see are teams that win simply because they can buy the best players. It throws the competitive balance of the sport off (see MLB and English Premiere League Soccer) often turning an entire league into a 2-4 team race year in and year out. Sure, many of these teams such as the Yankees, Man U., etc. are good for the reasons mentioned above (drafting, coaching, etc.), but given their massive payrolls they can often overcome deficencies buy simply going out and buying the best available. That sort of distorts competition in a negative way in sports.

I don't know if any of that makes any sense...

This is not as easy as you make it sound. Imagine if you are the Devil Rays or something and this scenario hits. Eveyone knows an expansion team can't be great in its first few years (save the Marlins who basically emptied the bank). Their first season they averaged about 30k fans per game, but didn't win much. The next season, they are down to 19k/game and they can't go out and spend anything. Now you're competing in a division with 2 teams that spend 120M without blinking, one of whom can spend 180M. Also you have the O's who can probably hit 80M+. How are you supposed to get good players to go there if you can't pay them what other teams can? If the DRays were going to try and stay profitable, they'd probably have about a 30M limit or so.

Salary caps aren't created to induce socialism, they are to help competitive balance so there's a sport. If there were no cap and we instituted a survival of the fittest capitalistic approach, there would be about 10-15 teams left in MLB...which if you look at competitiveness, that's what we have. A fun product? Not really. Will fans keep going back when the same teams win every year? Probably not outside of NY or BOS.

Do you mean profitable or successful manner. Many teams are deciding to be profitable, but then the can't be successful.

Like the LA Clippers, believe it or not, one of the most profitable franchises in the NBA...

Do you mean profitable or successful manner. Many teams are deciding to be profitable, but then the can't be successful.

It's a business, so profitable. If you don't have the finances to also be successful against other teams, then you probably not the right owner for the team.

This is not as easy as you make it sound. Imagine if you are the Devil Rays or something and this scenario hits. Eveyone knows an expansion team can't be great in its first few years (save the Marlins who basically emptied the bank). Their first season they averaged about 30k fans per game, but didn't win much. The next season, they are down to 19k/game and they can't go out and spend anything. Now you're competing in a division with 2 teams that spend 120M without blinking, one of whom can spend 180M. Also you have the O's who can probably hit 80M+. How are you supposed to get good players to go there if you can't pay them what other teams can? If the DRays were going to try and stay profitable, they'd probably have about a 30M limit or so.

Salary caps aren't created to induce socialism, they are to help competitive balance so there's a sport. If there were no cap and we instituted a survival of the fittest capitalistic approach, there would be about 10-15 teams left in MLB...which if you look at competitiveness, that's what we have. A fun product? Not really. Will fans keep going back when the same teams win every year? Probably not outside of NY or BOS.


This is a perfect example of what I'm talking about. If the D-Rays don't have the resources to compete on a financial level with Boston, NY, or even Baltimore, why handicap the other teams to make things easier for the D-Rays? They knew the landscape when they decided to enter the league. It's been said already that profitability and success are not necessarily complementary. Why try to force the issue by implementing salary caps?

I am a huge fan of how the soccer leagues are run in Europe. If you can't compete at the major league level, either financially or athletically, you are demoted to a lower level. Your competition, as an average, has the same resources available as you do.

This is a perfect example of what I'm talking about. If the D-Rays don't have the resources to compete on a financial level with Boston, NY, or even Baltimore, why handicap the other teams to make things easier for the D-Rays? They knew the landscape when they decided to enter the league. It's been said already that profitability and success are not necessarily complementary. Why try to force the issue by implementing salary caps?

I am a huge fan of how the soccer leagues are run in Europe. If you can't compete at the major league level, either financially or athletically, you are demoted to a lower level. Your competition, as an average, has the same resources available as you do.

Well, then we'd have about 15-20 MLB teams or so. Would that be a fun product to watch? The point of sports is that they are supposed to be entertaining. You are paying for entertainment, not watching Microsoft-like teams push everyone else out. I don't think sports were really meant to be capitalistic.

It's a business, so profitable. If you don't have the finances to also be successful against other teams, then you probably not the right owner for the team.

What would it take for a baseball team like Milwaukee or KC to be able to consistently challenge the Yankees? It would take an owner willing to throw away $50million - $100million a year for a number of years. Then just maybe they will have enough talent on the team to make a run for the title, and just maybe the team's success will bring in enough fans to sustain that level of spending. In some of the smaller markets, there probably aren't enough fans to sustain those salaries. Even if there were enough fans, can an owner only be the "right owner for the team" if he is willing throw away that much money and hope to break even 10 or 15 years later?

Well, then we'd have about 15-20 MLB teams or so. Would that be a fun product to watch? The point of sports is that they are supposed to be entertaining. You are paying for entertainment, not watching Microsoft-like teams push everyone else out. I don't think sports were really meant to be capitalistic.

Sure, I think it would be entertaining. I don't know that many people that get excited over a Tampa Bay/Kansas City game compared to a Boston/New York or a Dodgers/Giants game. Why dumb down the overall experience, instead of putting out the best product possible. More teams doesn't always equate to a more entertaining product.

Plus, if pro sports survived the past 100 or so years, why is it all of a sudden they can't make it without a salary cap?

Plus, if pro sports survived the past 100 or so years, why is it all of a sudden they can't make it without a salary cap?

Free agency.

Free agency.

This goes back to my original point. It's not the employee's problem that they ask for more money. If the owner pays that much, but doesn't have the business plan to support it, that is in no way the employee's fault. Because Team A doesn't have the resources to spend as much as Team B, why put a limit on what an employee can make for any team?

This goes back to my original point. It's not the employee's problem that they ask for more money. If the owner pays that much, but doesn't have the business plan to support it, that is in no way the employee's fault. Because Team A doesn't have the resources to spend as much as Team B, why put a limit on what an employee can make for any team?

There is no limit on what an employee can make for any team. The limit is on how much a team can spend as a whole. This limit is good for the sport in that it keeps player salary demands more reasonable, and concordantly it keeps ticket prices from spiraling out of control. It also keeps competition around. If MLB drops to 10 teams, the national fan base will drop and those 10 teams will find themselves unable to stay viable.

When there is league-wide competitive balance in a league (or even the perception thereof), it is good for the league's national appeal. More appeal means more fans means more money.

When there is league-wide competitive balance in a league (or even the perception thereof), it is good for the league's national appeal. More appeal means more fans means more money.

it's a chicken and an egg thing then. If there is more money, then there should be enough money that a salary cap isn't needed. But to create an impression of balance, then a salary cap is needed, so no team can spend more than any other team.

For the 87 millionth time, the sports business is very different. You can't have a league where you keep throwing away teams left and right any time there is financial trouble. The league would be a joke.

But many teams have situations where you lose $10M as a team if you keep your payroll. But you lose $7M less if you sign a player for $5M more because he helps you win. So, you use less even when writing a $7M check.

Do you mean profitable or successful manner. Many teams are deciding to be profitable, but then they can't be successful.
The Kansas City Royals turned a small profit last year. They also won 50-something games. See, it can be done. But then you damn teams to rankings based on finances with brief bubbles where teams like the Twins and the A's can win for a short while and then they have to spin off their Mulders and Hudsons for unproven youngsters to richer teams, etc.

I can't believe I keep seeing these threads from time to time. How many times does it have to be explained. It seems like every time, it's just a large market fan who loves to think their team has "a divine right" or something to be better than everyone else because they live in godforsaken New York or some other large city. Congrats, you enjoy bullying others. The rest of us don't like to be as much of assholes and think that beating a team at their best, when everyone else is on a level field is much better than beating little crippled teams like Tampa and Milwaukee.

SI

The best example of how a sport works entirely in a capitalistic system is no longer as popular. That would be boxing, where anyone can go pro and market themselves for the market price. As they get better, the price goes up as more people are willing to buy pay-per-view, see them in person, etc.

League sports are different. The leagues in themselves are monopolies or at least an oligopoly. They are a group of teams that only play against eachother and don't welcome competition from outside of the league. A team from another, less powerful, league cannot challenge a team from the higher league in a meaningful way. So, within the league, there is a salary structure. Because we are breaking the open market anyway, we need to have a way to keep salaries in check.

The goal for the league is for the team to make money, but a secondary goal for a team has to be for other teams to make money for competitive balance. If the Red Wings make all of the money in the league, and everyone else is losing money, there will be no challengers to the Red Wings if the other teams go out of business. Even if they stay in business, their level of players would be so bad that nobody would watch. Eventually the Wings fans would get bored with all of the winning, and they would stop caring.

So, while I totally believe in the open market and the new economic theory, I don't think you can apply it to sports until there is a semblance of a real economic market in sports.

it's a chicken and an egg thing then. If there is more money, then there should be enough money that a salary cap isn't needed. But to create an impression of balance, then a salary cap is needed, so no team can spend more than any other team.
No.

You are focusing only on the economics of the franchises, not the economics of the sanctioning league. It is in the league's best interest to put forth a competitive product. Salary cap helps achieve this. It also helps make it viable for more teams to enter the market which is generally good for the league.

Also, you are ignoring the aspect that the basis of a sport is to compete. The basis of business is to reduce/avoid/eliminate competition. Without competition, there is no sport.

No.

You are focusing only on the economics of the franchises, not the economics of the sanctioning league. It is in the league's best interest to put forth a competitive product. Salary cap helps achieve this. It also helps make it viable for more teams to enter the market which is generally good for the league.

Also, you are ignoring the aspect that the basis of a sport is to compete. The basis of business is to reduce/avoid/eliminate competition. Without competition, there is no sport.

I agree that the basis of sports is to compete. But nowhere does it say the competition has to be at the same level you are. The business aspects of pro sports changes this dynamic. You can't focus solely on the competition aspects (which owners, pre-cap seemed to do, and ignored the financial ramifications)

Imagine if they put something in place for the Olympics. All of a sudden it is decided to put a limit on what a county's IOC could spend for preparation for the Olympic Games, to give Jamaica a better chance at bobsled gold, because they don't have the resources of a US or Germany for bobsledding. To me, that is the same effect as a salary cap.

I agree that the basis of sports is to compete. But nowhere does it say the competition has to be at the same level you are. The business aspects of pro sports changes this dynamic. You can't focus solely on the competition aspects (which owners, pre-cap seemed to do, and ignored the financial ramifications)
"You can't focus solely on the competition aspects (which owners, pre-cap seemed to do, and ignored the financial ramifications)"


Here's your answer. If they are ignoring the financial ramifications, then it isn't really capitalist, is it? Congratulations on arguing yourself to the other side of the circle.


Imagine if they put something in place for the Olympics. All of a sudden it is decided to put a limit on what a county's IOC could spend for preparation for the Olympic Games, to give Jamaica a better chance at bobsled gold, because they don't have the resources of a US or Germany for bobsledding. To me, that is the same effect as a salary cap.
And this relates to league sports how?

"You can't focus solely on the competition aspects (which owners, pre-cap seemed to do, and ignored the financial ramifications)"


Here's your answer. If they are ignoring the financial ramifications, then it isn't really capitalist, is it? Congratulations on arguing yourself to the other side of the circle.


Hmm.. maybe I'm not reading something that is there...

I'm saying that the owners are in this situation becuase they are NOT following the laws of capitalism. They were, for the most part, equating spending lots of money to athletic competitive success and economic success. They are not related. One does not necessarily lead to the other.

As for how it relates to sports leagues, the structure is very similar. You have the IOC as the main governing body (MLB, NFL, NHL) and the countries are the "franchises".

Hmm.. maybe I'm not reading something that is there...

I'm saying that the owners are in this situation becuase they are NOT following the laws of capitalism. They were, for the most part, equating spending lots of money to athletic competitive success and economic success. They are not related. One does not necessarily lead to the other.

Okay, I think I understand your point. Since spending money does not equal success, implementing a salary cap (equalizing spending) doesn't make things more competitive (equalizing success). Is that it in a nutshell?


As for how it relates to sports leagues, the structure is very similar. You have the IOC as the main governing body (MLB, NFL, NHL) and the countries are the "franchises".
Well, the structure is not very similar. The countries don't hire their athletes on the free market. The selection is purely performance driven. Win the qualifier, get to compete. Granted, this isn't the case for team sports such as basketball and baseball. However, I don't believe the players are hired, but are instead invited. Also, the pool of playes is limited to country of origin. That isn't the case in professional sports. As far as I'm aware, the individual olympic committees don't get a cut of the revenues. I believe they are funded through donations, although I am only guessing on that. Furthermore, the "franchises" aren't competeing directly against other "franchises". If the USA gets more gold medals than China, the US Olympic Committee doesn't get any different compensation than if they get one less than China.

There are just too many wholes to consider it a valid comparison.

I'm saying that the owners are in this situation becuase they are NOT following the laws of capitalism. They were, for the most part, equating spending lots of money to athletic competitive success and economic success. They are not related. One does not necessarily lead to the other.

Of course they are not following the "laws of capitalism", they are in a closed system. Capitalism only works where you have a perfectly competitive system, and this happens only when the number of competitors is allowed to grow to the maximum that the market will allow.

As for how it relates to sports leagues, the structure is very similar. You have the IOC as the main governing body (MLB, NFL, NHL) and the countries are the "franchises".

Drop the analogy, you can't make it work. No financial model, no paid athletes, no revenue from the fans.

Okay, I think I understand your point. Since spending money does not equal success, implementing a salary cap (equalizing spending) doesn't make things more competitive (equalizing success). Is that it in a nutshell?

If that is the point, it is still invalid. The amount of money you have to spend doesn't guarantee your final position in the standings, but it plays a large role. Equalizing spending does make things more competitive. The only way it wouldn't is if you set the cap above what the richest team is willing to pay. Any time you cut the amount that a team can spend, you cut their talent. Add in the revenue sharing that usually accompanies a salary cap and you've got very similar payrolls on each team. Once you have similar payrolls, success is determined by the scouts, the coaches, and players living up to their potential.

How is this discussion even necessary in a forum dedicated to Front Office Football where finances and a salary cap are key components?

Shhh BrianD. I was setting him up. :wink:

Shhh BrianD. I was setting him up. :wink:

D'oh!

Drop the analogy, you can't make it work. No financial model, no paid athletes, no revenue from the fans.

This is the crystallized part of why I'm against salary caps. The two are analagous, except for the financial pieces that you mention.

People want the sports leagues to function like the Olympics, where the competition is all that matters. But in professional sports leagues, there are two inseperable components, the financial piece and the athletic piece. They are tied to each other. You can't have one without the other in professional sports. So why put a limit on one piece (financial, with a salary cap) and say it will make the entertainment more competitive, and ignore the other piece. Once a salary cap system stabilizes out, then you will still have athletic imbalances, which make one team better than the other (example, the current Patriots). What is the solution then? If you want to have competition, you've already affected the financial piece, next is the athletic piece. Do you implement a "speed cap" for a baseball pitching rotation, where the 5 starters can't have a combined top pitching speed over 375 MPH? Or a "height cap" in basketball, where the average height of your roster can't be over 6' 4"? Or a "weight cap" in football, where your starting offensive line can't be more than 1350 pounds?

I know I won't change anyone's minds, but to me, in professional sports, financial ability and athletic ability are inextricably linked, and a salary cap is a self-defeating mechanism.

The Olympic comparison fails because there's no free agency market for players. Expertise is a function of population and interest in the particular sport.

There are many countries with tiny populations and GNPs nowhere near America's that compete successfully in some sports. Liechtenstein has quite a few skiing medals.

Equalizing spending makes no sense without equalizing revenue. That's why the NFL model works.

Now, we're about to go through another round of negotiations in the NFL, because the salary cap expires in 2007. The big issue is whether the newer forms of revenue - luxury suites and naming rights - will be shared and added to what's used to calculate the cap.

If the owners are smart, they'll be willing to do this. If they get greedy and choose to dig in for a fight, the entire cap system could be in jeopardy.

This isn't socialism because the value of the top franchises (in the NHL, it's where there's interest, like the Detroit area; in the NFL, it's where the stadium is newest and fanciest) is dependent on having quality opponents in other cities.

With salary cap (teams performance level)

3,4,4,7,5,6,4,7,5,5

With no salary cap (teams performance level)

1,10,9,4,5,5,2,9,7,3

So, with a salary cap the patriots would be a 7 and the Cardinals would be a 3. without you'd have Pats = 10 and Cards = 1. A salary cap isn't intended to make every team even. It is intended to bring the level of competition closer. Of COURSE some teams are going to be better. The question is HOW MUCH BETTER?

I know I won't change anyone's minds, but to me, in professional sports, financial ability and athletic ability are inextricably linked, and a salary cap is a self-defeating mechanism.

How long you give the NFL?

How long you give the NFL?

umm... Where did I say the NFL is going to go under?

surely a league employing a self defeating mechanism is toast.

With salary cap (teams performance level)

3,4,4,7,5,6,4,7,5,5

With no salary cap (teams performance level)

1,10,9,4,5,5,2,9,7,3

So, with a salary cap the patriots would be a 7 and the Cardinals would be a 3. without you'd have Pats = 10 and Cards = 1. A salary cap isn't intended to make every team even. It is intended to bring the level of competition closer. Of COURSE some teams are going to be better. The question is HOW MUCH BETTER?


Thanks for vaidating my point about the link between athletic ability and financial ability of franchises.

If teams are still going to be better than others, then why place a limit on the financial piece, if you don't also place a limit on the athletic piece? If an even playing field for all teams is what you are after, shouldn't all teams be a 5?

surely a league employing a self defeating mechanism is toast.

I meant "self defeating" in the terms of it (salary cap) evening the playing field over the long term.

People want the sports leagues to function like the Olympics, where the competition is all that matters. But in professional sports leagues, there are two inseperable components, the financial piece and the athletic piece. They are tied to each other. You can't have one without the other in professional sports. So why put a limit on one piece (financial, with a salary cap) and say it will make the entertainment more competitive, and ignore the other piece. Once a salary cap system stabilizes out, then you will still have athletic imbalances, which make one team better than the other (example, the current Patriots). What is the solution then? If you want to have competition, you've already affected the financial piece, next is the athletic piece. Do you implement a "speed cap" for a baseball pitching rotation, where the 5 starters can't have a combined top pitching speed over 375 MPH? Or a "height cap" in basketball, where the average height of your roster can't be over 6' 4"? Or a "weight cap" in football, where your starting offensive line can't be more than 1350 pounds?

You very nearly answered your own question. When you implement a salary cap, the financials are equal among all teams. What does this leave? Competition in a level playing field. Teams no longer win because they have the most money, they win because the have the most talent.

A major difference here is that the salary cap is not judicially or legislatively imposed on the NFL. This is the league policing its franchises in the same way that McDonald's tells two stores in the same town that they can't charge wildly different prices for a quarter-pounder. This is NOT price controls in the sense that gas prices or wage controls were in the 1970's or 1950's respectively.

There's a difference between equal opportunity and equal achievement. One is a noble goal, the other is socialism.

I meant "self defeating" in the terms of it (salary cap) evening the playing field over the long term.

Clearly a cap does this in a general sense. If you are after absolute "5's" across the board it has been invented yet.

I'd much prefer the evaluation and manipulation of talent to determine the winner as opposed to my market size dominating that determination.

If teams are still going to be better than others, then why place a limit on the financial piece, if you don't also place a limit on the athletic piece? If an even playing field for all teams is what you are after, shouldn't all teams be a 5?

Nope. All teams can afford a 7, but that doesn't mean all teams will perform at a 7. Nobody wants all teams to be equal. We just want them to have an equal chance to compete. How well they perform given that chance is what makes the sport worth watching.

Thanks for vaidating my point about the link between athletic ability and financial ability of franchises.
I never said that there wasn't a link between the financial resources a team has and the athletic talent they are able to attract. They are linked which is why leagues implement a salary cap. That's been the point this whole time.


If teams are still going to be better than others, then why place a limit on the financial piece, if you don't also place a limit on the athletic piece? If an even playing field for all teams is what you are after, shouldn't all teams be a 5?
If there is a link between athletic ability and financial ability, as you said, wouldn't limiting the financial peice also limit the athletic piece? Duh.

And the goal isn't necessarily for all teams to perform at a "5" level. The goal is to keep a few teams from performing at a "20" level and others from performing at a "1" level. Increased competition, not necessarily level competition.

(let me preface this by saying that I haven't read any of the responses to the original post...I've just been reading way too much about these arguments, and if I read anymore, my head might explode...so maybe someone else has already made my point)

Okay...I think the biggest thing most people don't realize is that the teams that spend the most aren't the ones crying for a cap. If anything, it takes away their advantage. I'm a Ranger fan, and surely I'd like to keep buying the best players and watching their careers turn to shit once they put on the red white & blue (:)). And if you read any quotes by Rangers owner Jim Dolan saying "we need a cap," he is saying "We" as in the owners...not the Rangers. They have stuck together and they realize a cap is necessary for the good of the sport.

On to the teams who need the cap. They need it to stop the Rangers, Red Wings, Avalanche, etc. from being able to overpay for above average players, just because they can. If the money isn't there from the rich teams, then they can come back and accept offers from the Nashvilles, Tampas, Floridas of the league who need these types of players. If a cap is in place, we won't have 3rd line defensemen on Detroit who would be 1st line d-men on other teams. It would go far in making sure a team like Tampa Bay can win the Cup and it wouldn't be considered a fluke.

When there is league-wide competitive balance in a league (or even the perception thereof), it is good for the league's national appeal. More appeal means more fans means more money.

This point puts the answer in a nutshell. A salary cap works well in sport existing in a capitalist society because it generates additional revenue through increasing fan interest. A salary cap and capitalism are not opposite sides of a coin. They are tightly intertwined.

Ok, here's my little diatribe on salary caps:

If we are such a capitalistic society, then why do our sports teams want to integrate socialistic financial practices?

IMHO, player's salaries being out of control isn't the player's fault, it's the owners who pay them those salaries. Sure a player can ask for a ton of $$$, but it's the team who decides to sign them for that $$$, negotiate, or tell the player to take a hike. If the owners can't control their spending, I don't see why the players should have a hard limit put on them. I don't buy for a minute the BS about a team not being able to compete on a financial level. If that owner doesn't have the business plan to support a major league team, he needs to sell to someone who does. It isn't a right to own a major sports franchise, it is a business. If you can't run the business in a profitable manner, then you shouldn't be in that business. If another team has more money to spend than you do, then that's just the way it is in business.

I've never understood this deal about having all of the teams having to have a level financial playing field. It doesn't happen in any other industry, so why is sports different?

I was really hoping for "Screw you guys...I'm going home"

The best way to look at this is different divisions within the same company. I used the HP example in another thread, but I won't bore everyone again with that ;) The gist is that some divisions within a company are not as profitable as others but the company keeps them around (even at the expense of others) to hold onto market share. Having competitive franchises in Chicago, LA, Dallas, Phoenix, NY, Philly, Toronto and other cities are great for the NHL. Even if that means that one team (or division in the analogy) ends up making slightly less money.

Now, I don't think that everything should be set completely equal - that would be unfair to the Bostons, Torontos, Detroits and NYs. But I do think that some minimum solvency level needs to be provided by the league through sharing revenue to ensure each team has the opportunity to compete with good management. And the only real way to get that result in a consistent manner is some kind of revenue sharing plan with a salary cap.

The best way to look at this is different divisions within the same company. I used the HP example in another thread, but I won't bore everyone again with that ;) The gist is that some divisions within a company are not as profitable as others but the company keeps them around (even at the expense of others) to hold onto market share. Having competitive franchises in Chicago, LA, Dallas, Phoenix, NY, Philly, Toronto and other cities are great for the NHL. Even if that means that one team (or division in the analogy) ends up making slightly less money.

Now, I don't think that everything should be set completely equal - that would be unfair to the Bostons, Torontos, Detroits and NYs. But I do think that some minimum solvency level needs to be provided by the league through sharing revenue to ensure each team has the opportunity to compete with good management. And the only real way to get that result in a consistent manner is some kind of revenue sharing plan with a salary cap.

But sometimes the companies do get rid of the other divisions when they need to. GM got rid of Oldsmobile.

But sometimes the companies do get rid of the other divisions when they need to. GM got rid of Oldsmobile.
But that isn't analagous. The NFL wants competition, not market share, among it's franchises. GM shuttered Olds because the car business is zero sum and Olds and Buick were fighting for the same people. Football franchises are spread out enough that fans don't have to choose between two teams to go see (or watch, or buy jerseys from, etc.). If the NFL decided that New York only had 65,000 NFL fans, this analogy holds and we could expect them to move/remove one of the teams.