ABSTRACT
The NBA (National Basketball Association) introduced the concept of a salary cap in 1984, a year that coincided with the beginning of its ascent to become a major American sport. As genuine stars such as Larry Bird and Magic JOHNSON began to gain national exposure, the league tried to ensure that the entire NBA benefited. The league’s commissioner, David Stern, is credited with the salary cap initiative. While the maximum salaries were meager in early years, by 1998 the NBA cap was set at 51.8 per cent of the league’s “defined gross revenues.” This was determined as $26.9m (£16.5m) per twelve-man team, or an average of over $2m per player per year.
