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Competition in sports has intensified, not only in play but at the negotiating table. From the influx of private capital to more complex sponsorship arrangements, the dynamics of team ownership and player compensation are evolving rapidly, and leagues should adapt pragmatically and creatively.
Consider salary caps. Recent revelations about undisclosed financial arrangements between players and entities connected to team ownership have exposed tension. Are these creative attempts to circumvent salary caps or are they signs that the economics of modern sports have outgrown the rules meant to contain them? Salary caps were designed to preserve competitive balance, but they’re only as effective as the system’s ability to track and manage the flow of money. Increasingly, that flow is moving through channels the caps were never designed to address.
This raises a larger question: How do you approach contract negotiations with players if they stand to earn more from external sources than from their teams? Endorsements have long played a role, but they’re evolving into something more complex. Instead of traditional shoe deals or commercials, companies and investors can now align incentives to attract players to specific teams. What once seemed like isolated marketing plays are emerging as informal recruiting tools. Fans, businesses, and even civic leaders may step in to pay athletes directly, especially when they consider the economic benefits of having a superstar in their city. College sports have already moved in this direction through name, image, and likeness (NIL) deals—at least where boosters and local companies can help with recruitment. If similar dynamics take hold in professional leagues, the salary cap becomes less of a guardrail and more of a formality.
At the same time, the dynamics of team ownership have shifted. Leagues are increasingly defined by how they are owned and how revenues are shared, opening the door to treating players as partners rather than employees. A new generation of “challenger” leagues, such as women’s basketball’s Unrivaled, is reimagining the fundamentals of ownership and compensation, experimenting with equity-sharing models that directly align athlete incentives with league success.
Faced with this new reality, leagues may need to consider whether equity may be a useful tool in player negotiations. Equity offers both financial upside and long-term incentives. A player who owns part of a franchise has a reason to care about its health, its valuation, and even the enforcement of league-wide rules. Offering players a stake shouldn’t be treated as generosity on the part of owners. It could be approached as a strategy to channel power back inside the system.
The shift could take several forms. Leagues might allow players to negotiate minority stakes as part of contracts, tying earnings more closely to official frameworks. Unions could pool ownership shares collectively, distributing benefits across players while reducing disparities between superstars and role players. Or equity could be paired with governance rights, such as seats on boards or advisory committees, so ownership isn’t just symbolic. Whatever the structure, shared ownership could be a way to counterbalance the disruption external money can bring.
At the same time, however, owners should be careful to think through potential challenges. Guardrails would need to be established to prevent conflicts of interest in decision-making. Contingency plans, for example, would need to be developed for players who move to other teams. Leagues should also consider how alternative forms of compensation, especially equity, may interact with existing salary cap systems. Since most caps treat all forms of player compensation as cap-relevant, leagues may need to revisit how these rules are defined and administered in ways that maintain competitive balance.
Redefining compensation to future-proof leagues
Ownership isn’t the only lever available to leagues, and it may be useful to expand the definition of compensation. Contracts tied to media rights growth or streaming metrics could help both players and leagues benefit directly from a sport’s expanding reach. Even brand partnerships could be restructured so that deals flow through leagues rather than around them, capturing value that might otherwise distort competitive balance.
These ideas aren’t about elevating athletes for their own sake. They’re survival strategies. If leagues fail to create sanctioned pathways for this money and influence, athletes will find workarounds. And once the system loses its relevance, it becomes more difficult to pull momentum back inside.
Competitive balance, already fragile, could collapse if certain markets use their wealth and influence to attract stars regardless of salary cap rules. The long-standing relationship between players and ownership may flip, with athletes opting out of constraints that once governed their movement and compensation. NIL deals in college sports provide a glimpse into a future that’s fragmented, locally driven, and resistant to centralized control. What looks like a loophole today could soon become the standard operating model for how athletes move, negotiate, and earn.
Leagues face a choice: Adapt or risk losing control
The next decade will test whether leagues can adapt fast enough. Leagues can try to reinforce boundaries to keep outside money at bay or expand compensation models proactively.
None of these choices will be easy. Owners risk giving up control, unions risk internal fractures, and regulators may raise questions about fairness and compliance. But the cost of doing nothing is higher. Players are no longer just employees. They’re global brands, entrepreneurs, and power brokers. Leagues can continue to evolve—and compete—by carefully considering their responses to these changes and adjusting their business models accordingly.
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