Vote: What do You Think of Platini’s Calls for a European Salary Cap?

By: Laurie | July 16th, 2008

Several interesting proposals are coming from Michel Platini, President of UEFA. Platini met last weekend with a group of European Union ministers to discuss several EU laws he feels are detrimental to football. One of the things he would like to implement is a salary cap on UEFA clubs.

What Platini is proposing wouldn’t be the strict dollar (or pound/Euro) cap that they have in MLS in the United States. (The MLS salary cap this year is approximately $2.3 million per team, total, regardless of the club’s individual circumstances.) Instead it would be a percentage-of-income cap, where the amount a given team can spend on salaries would be limited to a certain percentage of the team’s income.

Platini didn’t give a specific percentage, but the numbers being thrown out are anywhere from 50-70% of income — that’s the amount that would be available for salaries. And it wouldn’t be enforced unilaterally by UEFA — it would require the teams to buy in beforehand.

Several leagues, like the German Bundesliga and the French Ligues, already have similar laws in place. I’m not sure of the Bundesliga details, but French teams are required to operate in the black. (This is just one of several reasons that French players tend to leave Ligue 1 for the EPL in search of higher salaries.)

The big positive that would come from a rule like this would be that it would help ensure solvency and financial stability. The amount spent on salaries would have to have some relationship to the amount of money coming in. Clubs couldn’t break the bank to bring in or keep star players. Borrowing to bring in high-salaried players in hopes of a payout somewhere down the road would become a lot harder, which would make a high-profile crash-and-burn like the Leeds United fiasco more unlikely.

I think the hope is also that a rule like this would level the playing field among teams, at least a little bit. Owners like Chelsea’s Roman Abramovich wouldn’t be able to pay the salaries of dozens of star players with money from his own pocket, which might leave some of these star players available for other clubs.

Of course, the rule could also help preserve the status quo. Because the salary cap would be a percentage of income and not a set dollar amount, it would continue to be easier for rich teams to afford the best players, which would, of course, help them to stay rich. Champions League revenue alone could pay for a lot of high salaries — revenue that, obviously, only the Champions League teams would get. This would theoretically make it easier to make Champions League the following year.

This rule would also make it harder for a rich owner to come in and invest heavily in a club in hopes of moving them up quickly, the way the German team Hoffenheim has done. You may remember Hoffenheim as the newly-promoted Bundesliga club from a town of 3200 that has the backing of a rich software mogul. Take away the mogul’s money and the club probably wouldn’t be anywhere close to the top rung of German football. If the salary cap rule had been in place in the past couple of years, chances are that he wouldn’t have been able to make the necessary personnel changes to make it happen.

So what are the chances that we’ll see a salary cap in UEFA any time soon? Probably not good. Limiting the money that individual business owners can spend on their businesses in Europe would face some serious legal hurdles. And even if UEFA managed to jump those hurdles and get the laws changed, they’d still have to get the support for the rule from the clubs.

In short, an intriguing idea. But don’t hold your breath.

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Laurie

Martin, We thought that one deserved a separate post. Perhaps for when Chris gets back from vacation, because as an Italy fan this is a hot-button issue for him.
martin

You haven't mentioned the under 18 transfer proposal which is a very good one, as much as I hate to admit it coming from Platini. The salary cap isn't going to happen, and even if it did its a bad idea doing it as a percentage. Why not have a set value that can be reviewed in the close season? But banning under-18 transfers is one of the most sensible things I've heard from Platini's mouth.
joejoejoe

ursus arctos - Good points above. I think Platini is less concerned with seeing his own proposals come to pass then keeping popular with fans so he can avoid scrutiny from fans and member FAs over the massive profits UEFA sees in Champions League and in Euro tourneys.

I think Arsenal has 58 players under contract between the first team and reserves. That's ridiculous. I think UEFA could institute roster limits without running afoul of EU law. Cap the number of pro contracts totals at 44 and that is 14 quality prospects that are spread around Europe.
frem

the thing with chelsea is even though they have alot of debt(as do manU and real madrid) they are still one of the richest clubs in the world, including actual revenue. So its not like chelsea will actually need to make too much losses.
I highly doubt the a salary cap of that level with increase parity since basicly chelsea/arsenal/liverpool/manU are much richer then any1 else in english football. ManCity would be screwed though.
Salary caps would also mean that some clubs will find it harder to retain certain players because the old guard doesnt want to lower then own rates.
This could only work is lets say the max money a player could make per week is 100,000 euros and the appearance fee should be capped as well. The clean shit/goal bonus should be capped but at a point quite high so that they have a large incentive to perform. This way certain players earning top money would not see a point to go to another club.
ursus arctos

An individual transfer fee may well be higher than the annual salary a club pays any given player, but in the overall context of the club, salaries are now the significantly higher expense in virtually all cases.

Salaries for the Premier League as a whole topped the 1 billion pounds sterling mark for the first time ever this season, and Chelsea's bill alone was over 110 million pounds. That would be a massive transfer fee bill for a single season, even for them.

Some data from the Deloitte report via World Soccer here:http://www.worldsoccer.com/new...

Of course, a cap on transfer fees would require the same changes to EU law as any kind of salary cap. And a limit on transfer fees could end up bankrupting the many clubs that survive in the current system by developing talent and then selling it on to "bigger" clubs.
ben

Correct me if I'm wrong, but I always understood that the big money in European soccer went to transfer fees, not player salaries. While a big name player can be transferred to a club like Chelsea for $50M or more, that doesn't mean that player will make anywhere near that kind of money (unlike American sports). So, to make UEFA more competitive, there really ought to be a cap on transfer fees, or some other way for smaller clubs to be able to sign and keep top talent.
elle

I really don't see this working out. If they really wanted to do something, they should just set a cap to the amount that clubs are allowed to pay players (ex. 5 million a year). Then at least we know it wouldn't be money pulling the big players to the big clubs.
But, somehow I doubt the players would be too happy about that either.
ursus arctos

poach, not pouch.

Platini cannot repeal Bosman, nor can he impose a minimum age requirement (even if he was able to get a sporting exemption); what he has proposed is doable with that pre-condition.

What would really help, however, is a more equitable distribution of Champions League revenues, which is a subject that he is afraid to touch because of the constant spectre of a SuperLeague breakaway.

To go back to Phil's original point, the proposal is that wages be a percentage of "turnover" ("revenues" to an American). Phil is absolutely right that a profit based plan wouldn't work at all.
Cerberus

I honestly see no possible method by which it wouldn't very strictly enforce the status quo of who is a rich team and who is a poor team and make it easier for a "rich club" to pouch talent on the cheap. A mandatory age or a repeal of Bosman would go a lot farther for parity.

Or heck even a law that would prevent the massive pouching of talent that happens whenever a not-so-big team has a really impressive run in the CL. That would at least allow a newcomer the chance to do it twice in a row and thereby win their country more chances, experience, and money.
McTalian

Are all Frenchmen communists? Just kidding. I think the percentage-based salary cap doesn't do much toward improving parity, which IMO is the top reason for instituting a salary cap. I suppose such a cap could limit finacial disasters as noted above. Don't think it's gonna fly, though.
ursus arctos

Platini (and especially his staff) is much more savvy about the realities of EU law than his predecessors (or Blatter). That's why he's pitching this as part of his initiative to have the EU recognise a "sporting exception" to the rules on freedom of movement similar to those that they have already adopted in the "cultural" sphere (i.e., the exemption that allows France to require locally-produced content on television, radio and in cinemas).

If UEFA and the other federations are successful in getting the EU to recognise such an exemption, it would in fact be possible for something like this to work. Even though the EU have rejected the concept of the sporting exemption before, it could be that limitations of this kind that can be spun as "levelling the playing field" could be more palatable to the new EU countries, who tend to suffer from competition with their wealthier rivals. Those votes could prove to be very useful (and it is worth seeing UEFA's support of the Poland/Ukraine bid for Euro 2012 in this context).

It will be very interesting to see how this plays out.
joejoejoe

This is another proposal (like 6+5) that has no chance of passing muster with the EU and EC. Football is a business like manufacturing cars or making clocks. People like Blatter and Platini can't simply make special sports rules because sports has a different place in culture. Under the law, the business of sport is no different than the business of making widgets.

A better way to check the growth of superclubs is to limit the number of players that can be under contract at any given time, limit the number of player loans, and eliminate transfers of players under age 18. Those are footballing rules related to competition and roster size that would prevent big teams from stockpiling talent.
Phil McThomas

It's great to see some consideration of a salary cap, but I think the current proposal is badly flawed and may make things worse rather than better.

One side note: Check your definitions because in US, 'income' means the same thing as 'revenue'. Profit, or net income, is what is left after expenses.

I'm not sure how you can limit salary as a percentage of net income (profit), as many clubs make a loss or or a tiny profit.

The flaw, in my mind, is the item you mentioned - that the model virtually guarantees that the rich clubs will remain at the top of the league forever more.

A flat cap for all teams would introduce a much greater level of partiy.