European Football... Its Time for a Salary Cap—Part Two

John HoumesSenior Analyst IMay 18, 2008

As I've been watching the Premier League archives recently, I've grown frustrated. Don't get me wrong. I love watching great matches from the '90s and earlier this decade. What frustrates me is that I don't see anything new.

The archived matches are either Man U destroying some team by six goals; two clubs playing that are no longer in the top flight; or two of the Big Four battling it out. While these matches are interesting, the repetition gets old.

I would love to be watching archives and say, "Oh, yeah. This was the season that Portsmouth and Tottenham battled it out for the title," or "this was the match where West Ham put Chelsea out of a Champions League spot."

Unfortunately, unless there are some changes, it doesn't look like we will ever be able to say these words.

In part one of this article, I called for a salary cap to be implemented in European football to topple the daunting empires that rich clubs have in their domestic leagues. This would make the leagues more exciting, as other teams would be in the title race more consistently and there would be a wider variety of clubs represented in the European tournaments.

There would still be dynasties in the domestic leagues, but it would look more like the Champions League. In the past ten years, no club has lifted the European Cup more than three times and seven different clubs have claimed the title.

Compare that statistic to five different champions in Serie A, four different champions in La Liga, and only three different champions in the EPL in the past 10 seasons.

A salary cap would diversify the domestic league champions. This second instalment of the salary cap articles will focus on the general implementation for a salary cap:

Hard salary ceiling: I believe a limit should be put on the maximum clubs can spend on players. It would be great to see it standardized for each domestic league, so that each club is limited in the amount it could spend on players.

It should be low enough that some bigger teams would have to really scale back their spending, but high enough so that some smaller clubs who just don't make the big money wouldn't be able to spend that much anyway.

UEFA institutes the cap: If the European governing body started the cap for European play, it would force the domestic leagues and governing bodies to think about implementing a cap as well. If they didn't, it would force clubs to have a higher-paid domestic squad, and a lower-paid European squad to meet UEFA salary standards.

For instance, a team like Chelsea might have to keep a few of their higher-paid players off their European squad to meet UEFA's cap, but those players could play in the domestic league.

Obviously, it would be easier for the domestic governing bodies, like England's Football Association, to partner with UEFA on the salary cap from the beginning, but if that didn't happen, this would be a way to force the domestic leagues to follow UEFA's lead. No one is going to want to have "two squads."

Having UEFA involved would keep all the players from leaving one domestic league to go to another, because the cap would be standardized throughout Europe.

Ease into it: UEFA and the domestic leagues should make the salary cap standardized after three years, but require that teams cut their spending each season until it is implemented. This would keep teams from radically having to shift their payroll in a matter of months. For instance, this season clubs could spend up to 200 percent of the salary cap, next season they could spend 150 percent of the limit, 125 percent the year after, then they'd have to meet the cap in the fourth season.

The Euro, the Pound and Taxes: Complaints have been voiced against a salary cap because of the difference in currencies. It really wouldn't be difficult to set a standard each season. If the cap was set at 50 million Euros, then EPL teams could spend up to 39,812,731 Pounds according to today's exchange rate. UEFA would also have to look at taxation in each country and account for clubs like AS Monaco, who play in a low-taxed principality.

Complaints may rise that this is starting to get too complicated, but if there are a group of guys who are smart enough to figure out the UEFA coefficient, then I don't see why a team of mathematicians couldn't construct a system for this.

Relegation and lower leagues: If UEFA could implement a salary cap for each domestic league's top flight teams, they could then suggest a certain percentage drop off to the domestic governing body for each descending league.

Just as an example, UEFA could set a 50 million pound spending limit for the Premier League. Then the FA could allow 60 percent of that for the Football League Championship, 40 percent for Football League One… etc.

If a team were to be relegated, they would be able to keep their previous season's salary for one year. It makes no sense to make a relegated club scramble over the summer to cut their costs, when they might return to their previous league through promotion the next season.

If, however, the club was not promoted back after one season, then they would be forced to meet the new salary cap for the coming season.

Consider this some of the basics of what a European football salary cap could look like. In the third article, we'll examine some possible regulations for players and clubs.