Salary caps do seem to make for parity in the sports leagues that use them. Your medium size market team has a legitimate chance of winning a championship at some point in your life. The trade-off is that you never get to see the best players in the world playing for a championship. You see one or two of the best players on each team, and whatever other players the team could afford under the cap.
I wouldn't want there to be a salary cap on the company designing my next laptop.
If you could guarantee that you and your colleague's salaries represented 50% of the revenue that the company collects, you would be in a much better place than many companies without a cap. If you and your colleague's could guarantee minimum salaries that can't be changed, you'd be in a good place. If you could guarantee working hours and conditions, you'd be in a good place.
Now, are there downsides? Absolutely! But those are the tradeoffs of union labor.
Now don't get me wrong, I still watch sports every now and then. But I don't take it seriously like I did when I was a kid and didn't understand the grim realities of professional sports. It's fun to occasionally see peak human physical performance.
They also don't have the secondary effect of making the teams competitive.
Take a look at World Series Champions (MLB -- no salary cap) [1]; everybody memes that the Yankees win all the time but they haven't won since 2009 and before that 2000. There have also been 16 different winners in the past 23 years.
Take a look at Superbowl Champions (NFL -- has salary cap) [2]; 14 different winners in the past 23 years.
Take a look at Stanley Cup Champions (NHL -- has salary cap) [3]; 13 different winners in the past 23 years.
Only the league without a salary cap has the most different winners.
[1]: https://en.wikipedia.org/wiki/List_of_World_Series_champions
[2]: https://en.wikipedia.org/wiki/List_of_Super_Bowl_champions#S...
[3]: https://en.wikipedia.org/wiki/List_of_Stanley_Cup_champions#...
https://www.fueledbysports.com/mlb-payrolls/
I think the salary cap does make it possible for any teams to be more competitive. The teams with the most wins since 2000 are the Yankees, Dodgers, Cardinals, Red Sox, and Braves. Three of those teams are the three biggest spenders in the league year after year. I think we can say with high confidence these three teams will have a better record over the next 20 years than the Pittsburgh Pirates or Detroit Tigers.
The salary cap doesn't mean that there is more parity, but overall it decouples the size of the city and the "luck" pretty well. The Chiefs are the best team in the NFL now - despite the fact they have a small market and an owner with little resources outside of owning the team.
They will be hard to catch up with because other teams aren't allowed to get ahead. That said, I think fans are more accepting of that because the reason is they drafted an exceptional player, rather than the Yankees who are hard to catch up with because they can continually spend on new players.
Whatever the richest team in the league pay in salaries, half this value must be donated to the poorest team. Same for the second richest and the second poorest and so on.
Richest means the biggest payroll after the players are subscribed.
This could create a balance, since you can't spend too much without consideration the +50% penality. And the teams paying these values should consider it an investment in the quality of the league, which will increase overall returns.
The money collected from that doesn't all go to the other teams, but a meaningful chunk of it does.
You'd also be restricting the capabilities of the talent themselves, since they're naturally going to have conflicting ideas and in a company with no competition, there's little incentive to try multiple approaches.
Labor is guaranteed a percentage of revenue by the league. Caps are normalized against the total percentage. Salaries past minimums are estimates.
So, not quite socialist but closer than the European model.
