Salary management, in a nutshell, is limits a league puts on teams regarding how much they can pay their athletes. Salary management ideas have been around since the early 1980's. These ideas have been greatly disputed between players, owners, and league officials. While some believe salary caps or other methods of salary management are effective, others claim that these methods are useless and unnecessary.
Before 1984, there was no such thing as a salary cap or any form of salary management system. Today, every major sport has some version of a salary management plan. There are three different branches of salary caps: hard salary caps, soft salary caps, and luxury taxes. Hard salary caps have the strictest regulations. This specific type is not in use today, as it was in the past. Hard caps have no loopholes in the system, and in no way can the system be exploited. On the other hand, soft salary caps have circumstances where the cap can bend. For example, in the National Basketball Association (NBA), "the soft salary cap allows a team to sign a replacement for an injured player at up to fifty percent of the injured player's salary without this additional salary counting against the cap"(Staudohar 5). This becomes very useful when a team has a star player who becomes injured. Last, and the most forgiving form, is the luxury tax. This form of the salary cap means that teams may go over the salary cap, but have to pay a large tax on every dollar they spend over the cap. This form is officially used in baseball by large teams from New York and Los Angeles, as well as other large city teams (Staudohar 8). .
Two sports presently have salary caps set that have no circumstances for different teams or players. These sports are baseball and hockey. Gary Bethman, Commissioner of the National Hockey League, offered an idea to the NBA commissioner concerning the leagues salary cap (Staudohar 4).
