Does the English Premier League Need a Salary Cap?

Dusan LucicCorrespondent IIAugust 15, 2012

Although talks were held about introducing a salary cap in the English Premier League in 2011, the managers couldn't come up to a conclusion.

What does a salary-cap system even mean?

Well, it basically means that each club has a money limit when it comes to spending on players.

Such systems have already been introduced in some American leagues, such as the NBA and NFL, and they have helped the smaller teams, making the leagues more competitive. But the truth is, those leagues don't have a real competitor in the market, and most world-class players end up in the NBA or NFL.

MLS is another league in which a salary cap system is used. Nevertheless, MLS clubs have found a way to spend more than they are officially allowed. Michael Gardner explains how they do it here.

However, the situation in European football is completely different.

Italian Serie A, Spanish La Liga, German Bundesliga, English Premier League and French Ligue 1 are all strong presences in the world-football market and are equally attractive to top players.

If EPL does introduce the salary cap system—and I doubt they will—English clubs could be set for a massive exodus of quality players from the league. After all, you can't expect a player to stay in England if a foreign club offers to treble his wages.

The consensus that a salary-cap system would break the dominance of big clubs is simply wrong. Even if the offered salary is the same, most world-class players will still pick Manchester United, Manchester City, Chelsea etc. over West Ham United or Swansea. The smaller clubs might improve, but it would take years and years for them to seriously challenge for the trophy.

However, introducing this system would be a giant leap towards cleaning the huge debts of EPL clubs, which collectively recorded a loss of £361 million in 2010-11 (via The Guardian).

Only eight of 20 clubs recorded a profit last year, while Manchester City amassed a £197 million loss—reportedly the greatest loss in the history of football.

Most of those debts are generated by colossal wage bills—the Premier League clubs have spent almost £1.6 billion on wage bills alone last year.

This worrying trend of ridiculously paid players is likely to continue unless something is done. The UEFA Financial Fair Play rule is the first step, but more needs to be done to ensure the survival of heavily indebted clubs.

A salary-cap system combined with the Financial Fair Play rule could revolutionise world football, but the system has to be introduced globally, and not on separate leagues.

What do you think? Should the English Premier League introduce a salary cap?


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