European Football... Its Time for a Salary Cap—Part 3

John HoumesSenior Analyst IMay 24, 2008

We can quit holding our breath (not really) now that Manchester City's Asian tour is over and the European season has largely come to a close.

Our eyes now turn to summer transfers, where the market promises to be footloose and fancy free. Kaka, Ronaldinho, Frank Lampard, Didier Drogba, Cristiano Ronaldo, Thierry Henry and Samuel Eto'o are all names surrounded by transfer speculation. Ronaldinho, Ronaldo, Kaka and Henry are among the top six highest paid football players in the world, according to Forbes.

When the curtain is raised again on the European stage in August, many superstars will have resettled in new countries with a new signer on their paychecks. We could see any one of them surpass David Beckham (pictured above) to become the highest paid footballer in the world.

In the midst of the conjectures and theories about summer moves, I'd like to continue the discussion around the Bleacher Report water cooler about the need for a salary cap in European football.

A salary cap in European football would have the following benefits:

1) Talented players would be more evenly distributed between clubs

2) Smaller clubs that have lurked in the middle of the pack for years might now have a chance to become title contenders

3) As other teams jump into the title race, their worldwide popularity would grow, increasing revenue for those clubs and their leagues

4) Fans could end up paying a little less for tickets to matches

5) The beautiful game might become a little less about money

In the first article on the need for a salary cap in European football, statistics on the English Premier League and the salary-capped NFL were compared. A possible general structure and implementation plan for a salary cap was discussed in the second article. This installment will focus on some possible salary cap rules that would affect the transfer market and player's movement between clubs.

Marquee Player – One to two players per club would be chosen as a marquee player to have an unlimited salary exempt from the cap.

This would force players who might transfer to consider if they want to win a championship or if they want to make more money. A solid player might have to take a significant pay cut to play for Manchester United with Ronaldo and Rooney possibly being the marquee players. But a star player could also go to a club like Tottenham or West Ham and make some good money by being their marquee player.

In American leagues with salary caps, often a seasoned star player will take a pay cut to play with a championship contender so he can get his shot at winning the before his career ends.

In Europe, it seems that a player can both get a pay raise and move to a championship club. Having a marquee player clause would help spread out the talent pool throughout Europe.

It might force players like Carlos Tevez and Michel Ballack to choose between more money and a chance at championship glory.

Guaranteed Player Contract – In some leagues in the US, a team can opt out of a player's contract and not pay his salary by cutting him. European footballers are going to throw a big enough fuss if a salary cap were instituted, so I think guaranteeing their contract is a good idea.

Players would be guaranteed to get paid the money their contract stipulates, even if they are injured, unless they retire.

Bonuses – Bonuses would fall under the salary cap as well. Proposed bonuses in player's contract would fall under "likely to be earned" or "not likely to be earned".

For instance, if Didier Drogba were to sign with AC Milan this summer, contract stipulations might look like this:

Bonuses likely to be earned: 
10 goals scored (€20,000).
20 goals (additional €50,000).

Bonuses not likely to be earned:
40 goals (additional €100,000)

The €70,000 from the likely to be earned category would count towards the clubs current year salary cap, but the not likely to be earned would not.

If Drogba did score 40 goals, then the additional €100,000 would be counted against next year's salary cap for Milan. If he were to miss the twenty-goal mark, then Milan would get an additional €50,000 of spending in next year's salary cap.

Transfer Fees – Regarding the payments made from club to club for transfers, I don't see why a team couldn't buy a player from another team for a high amount, but not count the transfer fee towards the salary cap.

But any amount the player receives in the process of the transfer would count towards the salary cap of the club who paid it.

If an agent received a fee from the club who the player is transferring to, the club would have to count a percentage of that fee (maybe 50%) towards their salary cap, especially if the player is going to get some of that money from the agent. But this would be tricky as the agent could then transfer money to the player according to the agent/player contract (suggestions welcome on this).

The club who is selling the player would not have to count any payments received towards anything. It could just go into their bank.

Sticking with the hypothetical Drogba to AC Milan scenario, this is how these clauses might play out:

Drogba gets €30million from Milan (counts towards Milan's salary cap). Milan pays his agent €3 million (€1.5million counts towards cap) and Chelsea €10 million (not counted towards Milan's cap) in transfer fees. Drogba's new contract with Milan states that he is guaranteed to be their marquee player for three years.

These rules on transfers would still give big clubs an advantage in being able to purchase great players from other teams. It would still balance out as the players might not want to transfer to a big club if they can't be the marquee player or if the team's salary is already near the cap.

Footballers are obviously going to be frustrated if their salaries are cut due to a cap, but I believe a salary cap in Europe will better the beautiful game now and continue to ensure quality leagues for years to come.


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