What are salary caps?

• A. A ceiling on how much each team can spend on player salaries, set as a percentage of league revenues.
• B. A floor on minimum team spending.
• C. A cap on total league payroll.
• D. A restriction on the number of players a team can sign.

Answer: (C)

A salary cap sets a maximum on what teams can spend on player salaries in a season. It’s typically described as a cap on the total league payroll, meaning there is a league-wide limit that constrains how much all teams together can pay in salaries, which helps keep competition more balanced. This isn’t about forcing a minimum spend, nor about limiting the number of players, and it isn’t universally defined as a percentage of revenues (that can occur in some systems but isn’t the standard definition).