The Case For a Salary Cap in European Soccer

On August 27, the English Football League (EFL) expelled Bury Football Club from the English Professional Soccer Divisions, making it the first club to be restricted from the premier tier of English soccer since 1992.

On August 27, the English Football League (EFL) expelled Bury Football Club from the English Professional Soccer Divisions, making it the first club to be restricted from the premier tier of English soccer since 1992. The club closed down due to financial mishandling by the owner and the board of the club, ending its 134-year history. The club’s financial problems, such as the inability to pay wages and pensions, resulted in its expulsion from the EFL. In the recent decade, the soccer community has seen multiple lower-division teams face similar financial troubles such as Italy’s Parma Football Club (F.C.), England’s Bolton Wanderers F.C., Scotland's Rangers F.C., and England’s Leeds United. These clubs are a part of the immense list of low-tier squads that have faced bankruptcy. Teams in the lower tiers of soccer face the constant danger of such regulations and executive actions from their respective national associations, and a solution must be found to help them compete on a level playing field with the sport’s rich, historic clubs.

In 1994, the National Football League (NFL) conjured the hard salary cap, which limited the total amount of wages a team could pay for a team. Since then, a phenomenal “84 percent” of NFL teams have finished with “at least the top six best records” of the competition, and 12 different teams have ended with the best record in the league since then. On the other hand, out of 20 teams—which change every season due to promotions and relegations—only six clubs out of the 49 that have competed in the Premier League have won. The NFL’s limitations on how much each team can spend on its players was a major step towards implementing a level playing field for its teams, which is something that has yet to be replicated in major European soccer leagues.

The commercial side of soccer is a meritocracy where success brings in an abundance of revenue, while struggling teams are not rewarded. Such a system has driven clubs both high and low in European soccer, where commercial goliaths and underdogs have been created. For example, by placing in the top four in the English Premier League, teams qualify for the Union of European Football Associations (UEFA) Champions League and are rewarded with more exposure and additional revenue from broadcasting rights. Furthermore, as a byproduct of success, revenue increases from merchandise and ticket sales. Unlike the National Basketball Association (NBA) or NFL, European Soccer leagues do not have drafts where lower placing teams have a better shot at landing top prospects. For the purchasing of players, rather than waiting for contacts to expire, transfer fees are paid out to clubs to terminate contracts with their players; as a result, teams with more financial backing are able to create better rosters. For example, over the summer, Eden Hazard, the face of Chelsea F.C.’s recent success, moved for 90 million pound sterlings, to Real Madrid C.F., a team which over decades has purchased top talent from around the world. For teams like Real Madrid C.F, success has continued with star acquisitions, while lower placing teams have creeped towards relegation.

For teams that have their star players stripped from them, they simply do not have the financial capabilities for youth training facilities to harvest players with potential. Such clubs cannot competitively sell or buy young players with the much larger clubs who have phenomenal talent coming through the youth academies every year. Without salary caps, clubs can acquire players by providing them enormous wages, as they do to global superstars. As clubs become commercially stronger, they can acquire players to compete in their respective leagues. The dominance of mega-clubs in soccer has raised questions about how competitive their leagues are, as the financial failures of the minor clubs have drawn further attention to this issue.

A hard salary cap in soccer would prevent teams from having such power to pull players from other clubs, and poor clubs would have much larger opportunities to achieve glory, just like in the NFL and other American sports. It may be time for European soccer to approach sports in an American way, but it would raise multiple questions in the process. For example, placing a sudden salary cap on current European soccer would send many rich clubs into spirals, as their payroll would greatly exceed the payroll limit. How could soccer’s governing bodies gradually implement the salary cap so that teams may adapt? Who would regulate such salary caps? What should the salary limit be set at?

There are many questions that need to be addressed about the salary cap before it is implemented in European soccer. Although it may be unrealistic at the moment, the salary cap could be a solution for soccer leagues to become much more competitive and for lower-tiered teams to have an equal opportunity to achieve glory.

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