Abstract

Salary caps are widely used in professional sports as a mechanism for improving competitive balance in a league.  Some commercially important sports leagues such as soccer’s English Premier League are considering their introduction. To guide the decisions of policy-makers in such organizations, information on the effectiveness of salary caps is essential. This paper assesses the impact of the salary cap introduced in rugby league’s European Super league on the competitiveness of the league. Using three measures of competitive balance; share of championships won, the five-club concentration ratio and the Herfindahl-Hirshman index, we find tentative evidence that the salary cap did improve competitive balance after it was introduced.

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