Football Evolution: Assessing the Creation of Salary Caps
Before the adoption of the Bosman Ruling (which allowed players to move for free after their contracts expired), players did not have the option of changing clubs for “free”. It is also important to consider the Financial Fair Play (FFP) Rule, which was introduced by UEFA to make sure clubs do not overspend (spend more money than they make each season), to the Video Assistant Referee (VAR) and more recent, the tussle between Manchester City and UEFA (although the issue is going to be decided by the Court of Arbitration for Sports).
These, amongst many other evolutions, have shaped the world of football (both on and off the pitch). Interestingly, football clubs have found a way of evolving with these rules and creations.
The main reason behind this piece however is to discuss whether or not introducing a “salary cap” would be the way to go in terms of improving the finances of clubs and the entire football ecosystem.
Salary caps evolved out of the need to ensure parity between all the clubs in a league system. Usually, the player associations and the league management come to an agreement or a rule which places a limit on the amount of money that a team can spend on a player’s salary. It generally prevents teams from signing multitudes of high paid stars to prevent their rivals from wining
In light of the COVID-19 pandemic and its economic impact on football management, there have been fresh calls for the introduction of salary caps in football, with FIFA President, Gianni Infantino becoming the latest person to clamour for its introduction.
Although FFP was introduced to improve club finances, it has not entirely served its purpose, according to many writers and opinionists. FFP was created to make sure clubs do not spend more than they earn. For example, if a European club makes 60 million pounds, the expenses (especially transfers) of that club must not exceed that amount, or they would face certain sanctions (for some clubs, it would be suspension from European competitions if found guilty by UEFA.
A few years ago, AC Milan was found culpable of being in breach of FFP rules, therefore missing out on European football the following season). Currently, Manchester City faces the prospect of not playing European football (although the club has appealed to CAS, presented its case and is currently awaiting judgment). However, that is not the focus of this article.
Would a salary cap then rectify the failings of the FFP rule?
Arguments for the Salary Cap
To start with, a salary cap, just like that which is used in the Major League Soccer (MLS) and National Football League (NFL) in the USA, would most likely go a long way in levelling the massive gulf in quality between top European clubs and “other clubs”. For example, teams like Manchester City, Paris Saint Germain, Juventus, etc, have been able to buy some of the best players in the world, with an expansive transfer and wage budget.
Also, top clubs have the opportunity of poaching some of the best players from other clubs, splashing the cash and providing tempting wages to these players, leaving the smaller clubs stranded. There have been top clubs who have gone on to sign from rival clubs in a bid to strengthen themselves (the top clubs) and weaken their rivals. Interestingly, this ends up being a cycle, as the other clubs then go to lower leagues to also sign their best players.
A good example is Brighton going on to sign French striker, Neil Maupay from Brentford, and West Ham signing Hull City striker, Jared Bowen in January. In the case of the latter, Jared Bowen’s signing left Hull City in the lurch, as they were unable to sign a replacement for the striker – which has seen them struggle for form and currently battling relegation (also note that Bowen was the club’s top scorer before he was signed).
With a salary cap, clubs will focus more on the development of players, promoting homegrown talent and looking inwards into their academies, it would create an equal playing field for clubs that naturally would be limited by finances to compete with top clubs. This has always been the beauty of European football with underdog stories such as Leicester City and the youthful Ajax who went on to win competitions through sheer work and not buying their way to trophies.
A further argument would be the fact that a salary cap makes it feasible (and probable) that clubs would be able to have enough finances to make sure they do not run into administration. The issue of Bury FC remains fresh in the memories of many, as the club ran into financial issues and ended up winding up. The argument for asides having a level playing field also makes a view of proper financial policies for clubs, in a bid to sustain them.
The recent developments in Barcelona is also another valuable example. This is because Barcelona has over the years spent heavily in the transfer market and have found it a bit difficult to offset their wage bill, as several players are on high wages – Coutinho has to bear the brunt of this.
Arguments Against the Salary Cap
Can salary caps work in European football? The plain answer is no. A salary cap cannot work in football.
To begin with, the European system of football has existed for a long time, without salary caps. Thus, the introduction of a salary cap can simply not happen overnight. European law itself does not favour salary caps and as such, it would have to be a voluntary sacrifice made by player associations across board. This would have to be done in each league across Europe because a situation in which the English Premier League implements a Salary cap and the Spanish “La Liga” does not would see players opt to play for clubs in the latter league due to higher salaries.
Furthermore, it will only work in a level playing field sport with equal financial might and pull, like the MLS or the NBA in the USA. In Europe however, a salary cap will be extremely difficult as clubs earn differently in terms of income from ticket sales to TV rights.
The Premier League earns higher than the Dutch Eredivise and even within their leagues, there are disparities between clubs due to income generated. Also, the structure of these leagues which have a promotion and relegation system as opposed to playoffs would mean teams have to be adequately strengthened against their fellow contenders, the small difference, a few more amount of pounds can make in persuading a player to join your club.
Ultimately, the goal of sports is competition and advantage over the competitor, it is what drives a club to be better than another from the financial outlays for profit generation to the sheer amount players are signed. This is particularly necessary for clubs in continental competition such as the Champions League, that even in an unbalanced league like the French Ligue 1, clubs still have something to play for. Putting a cap on salary will no doubt doom football and may even lead to the creation of the rumoured European Super League amongst the elite clubs.
Moreover, as a player, performance and value go significantly together. It is the reason a player like Cristiano Ronaldo left Real Madrid to earn more money (and feel valued) at Juventus. The life of a football player is short and can be significantly limited by untimely injuries hence the reason for proper remuneration. Players sell more jerseys for clubs, generating income, so why should they not be adequately compensated?
The control of cost in football is already regulated by the FFP rules and for the sake of competition, there cannot be parity between teams, the MLS is a clear example. The COVID-19 pandemic may have significantly reduced income for clubs and forced player to take pay cuts but it is only temporary. Football may have evolved from the Bosman ruling to Goal-line technology and Video Assistant Referee but a salary cap is not the next step in its evolution.
In conclusion, the creation of a salary cap might end up just being a theory, as a lot of considerations would have to be put in place for it to run smoothly and efficiently. Thus, rather than creating a salary cap, it would be more advisable to make the FFP work more smoothly than it already is.
Eribake Ayomide Oloruntoba is a 500 level student of the Faculty of Law, University of Lagos. He has researched and written various articles as regards Sports Law, most of which have been published on a number of platforms. He has interests in sports law, arbitration, insurance law and research. During his free time, he loves watching football, reading, watching movies and writing.