Salary Caps and Luxury Taxes: Insights from Professional Team Sports (Gehaltsobergrenzen und Luxussteuern: Erkenntnisse aus dem professionellen Mannschaftssport)

Abstract

The regulation of executive pay currently is a topic widely discussed in politics and the media. In this contribution we analyze a sector with a long tradition of pay regulation: professional team sports. We provide an analysis of the most important regulatory practices and their consequences on the labor markets of professional athletes, teams’ financial situation, and sports competition. Further we sketch how similar practices could look in the context of executive pay regulation.