Salary caps are a relatively new phenomenon. Before the introduction of free agency in the 1980s, many leagues, most notably Major League Baseball, operated under the “reserve clause,” which prohibited players from negotiating with other teams, even after the conclusion of a contract. Players challenge this clause in the 1970s, and owners offered many of the same arguments then that they do today about salary caps:
"...owners of sports teams developed the argument that, whatever the consequences of the reserve clause on players' salaries, it was needed to preserve competitive balance. Owners argued that free agency would allow the richest teams to acquire a disproportionate share of the playing talent in the league. Competitive balance would be destroyed, driving weaker franchises out of business."