Hard Cap, Soft Cap and Salary Floor
A salary cap can be defined as a "hard" cap or a "soft" cap. A hard cap represents a maximum amount that may not be exceeded for any reason. Contracts which cause a team to violate a hard cap are subject to major sanctions, including the stripping of championships won while breaching salary cap rules, and voiding violating contracts. Hard caps are designed so that penalties deter breaking the cap, but there are numerous examples of clubs who occasionally and/or systematically cheat the cap.
A soft cap represents an amount which may be exceeded in limited circumstances, but otherwise exceeding the cap will trigger a penalty which is known in advance. Typically these penalties are financial in nature; the luxury tax is a common penalty used by leagues.
A salary floor is a minimum amount that must be spent on the team as a whole; this is separate from the minimum salary for each player. Some leagues, in particular the NFL, require teams to meet the salary floor every year, which helps prevent teams from using the salary cap to minimize costs.
Read more about this topic: Salary Cap
Famous quotes containing the words hard, soft, cap, salary and/or floor:
“Let not the tie be mercenary, though the service is measured in money. Make yourself necessary to somebody. Do not make life hard to any.”
—Ralph Waldo Emerson (1803–1882)
“half-way up the hill, I see the Past
Lying beneath me with its sounds and sights,—
A city in the twilight dim and vast,
With smoking roofs, soft bells, and gleaming lights,—
And hear above me on the autumnal blast
The cataract of Death far thundering from the heights.”
—Henry Wadsworth Longfellow (1809–1882)
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—Victor Hugo (1802–1885)
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—John Dos Passos (1896–1970)
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—Andrew Holleran (b. 1943)