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Anonymous
Works differently for different sports.
The NFL has like a hard cap, meaning you have a hard dollar number that you can't pass. Other leagues, notably baseball, have a "luxury tax:, meaning for every dollar you pay over a certain amount, you get "taxed" and have to pay a percentage.
Anyway, salary caps gety really complicated in all the leagues. Teams split up players contracts in different ways to charge it against the cap more in one year and less in another. You can give players some money that doesn't get charged to a cap the same way as the rest (called a signing bonus). And players renegotiate their contracts all the time, just to help with the cap.
In a nutshell, salary caps and revenue sharing help to keep all teams more competitive in a fixed league...but if European soccer leagues have relegation, doesn't that render all that stuff moot? If you can't compete, tough luck in the lower bracket sucker!
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