During a discussion with my colleague Richard Martin, we discussed the issue of salary caps and their effect on sports. Salary caps, to me, have a negative effect on sports. With a salary cap, all teams are equal and any given year, any team can win. That's fine for sportsmanship, but is it good for sports?
I used to watch basketball and I stopped when Michael Jordan left. Why? Because I couldn't rally for any given team. The Jordan-era Bulls had Pippen, Jordan, Rodman, and Phiil Jackson. I just loved watching the team play, I wasn't watching to see a particular player. Today, I don't watch basketball because... well, after the Bulls dynasty ended, there was little interest on my part. The league started to focus more on individuals than teams.
Same goes for hockey and football. It isn't so much about the teams as it is about the individual players. Dynasties have disappeared. Teams can't win back-to-back championships, and I contend that it's not that good for sports. Dynasties creates legions of fans, equality doesn't.
If we look at soccer, you have dynasties which stand the test of time: Manchester United, Real Madrid, AC Milan, Brazil, Germany, etc. Those are the teams that create the quasi-religious fever surrounding the sport. Those are the teams that make the World Cup the second biggest sports even in the world.
Dynasties are like black holes: they attract people to them. Many people will be attracted by a dynasty because of the caliber of the players, the fluid play, the nonstop wins. Many others will be attracted because they want to see the dynasty brought to its knees, they want to see the minnow knock down the giant, they want to hate the team that wins all the time. That's good, it makes the weaker teams work that much harder.
However, when all teams are equal, when it's a coin toss from one year to the next, the sport loses some of its luster and some of its magic. It becomes ho-hum.
And so it is in business: businesses work because there are superstar companies and there are jobber companies. There are superstar salespeople and there are run-of-the-mill salespeople. If you try to rein in stellar companies, to try to bring them down to the level of lesser-performing ones, you destroy initiative, innovation, and ultimately, leadership. Just look at what happened to Microsoft. They were ahead of the game on many fronts, not always because of their clean business tactics. They were brought down by the DOJ and today... well, they still make decent products but where is the buzz? Where is the innovation? Where are the rabid fans?
In a company where you reduce compensation for the best performers in order to level the playing field and salaries, the best performers will either stop putting in the efforts or they will leave to go to another company which better appreciates their value. They'll take their dynasty to a better playground.
Dynasties set the standard, they pave the way. As the ad used to say: "We're #2 so we work harder." That's what dynasties do.
Until they are toppled and replaced by another.