Difference between hard cap and soft cap

Discussion in 'The Business of Hockey' started by Chileiceman, Feb 1, 2005.

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  1. Chileiceman

    Chileiceman Registered User

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    Pardon my ignorance, but can someone explain what the difference between a hard cap and a soft cap is.
    :dunno:
     
  2. mudcrutch79

    mudcrutch79 Registered User

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    A hard cap is one that you absolutely cannot go over, and a soft cap is one that you can get around, whether through exemptions or through paying a tax.
     
  3. Hire Sather

    Hire Sather Don't punt seasons

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    NFL- Hard
    NBA- Soft
     
  4. Ar-too

    Ar-too Zealous Scrub

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    The NFL currently has a hard cap. They've got a set amount they are allowed to spend on players and they cannot go over it without penalty - fines, lost draft picks, etc.

    The NBA has a soft cap. You cannot go over it to sign someone else's players for any money other than whatever 'cap exemptions' you have. For instance, the Lakers used salary cap exemptions to sign Karl Malone and Gary Payton last year. You can go over the cap as far as you want to sign your own players as long as you own their "Larry Bird" rights, meaning you've had said player a certain number of years, etc.
     
  5. Jaded-Fan

    Jaded-Fan Registered User

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    That is a bit simplistic, there are ways 'around' a hard cap too. But what is nice about it is that through restructured salaries, bonuses, etc, a team can 'go for it' for a year, two, maybe three, and pay the piper down the road. I like the idea of that system as it creates the most financially equal playing field among the sports and yet allows some leeway to overspend if you think that you are close to a championship . . . but you pay for it eventually.

    No system is entirely equal btw, there are always ways outside fo the cap to spend extra funds. Scouting, facilities, players can get more advertising income in LA or NY . . . etc, etc . . . . but it is by far the most equitable among the sports in the NFL.
     
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