Football’s financial ecosystem is so unique compared to the rest of the business world that we no longer raise an eyebrow when a club forks out £100 million on a transfer for a new player or £100,000 a week on wages for a star. Those are preposterous numbers, but ones that are considered par for the course at the elite-level of the sport.
The problem is that football’s financial foundations are built on mountains of debt, and while that doesn’t seem to matter to anyone – even the most in-debt clubs can circumnavigate financial fair play rules – there could be a time when even the biggest teams in the world are operating on borrowed time as well as borrowed money.
One possible solution would be the implementation of a salary cap, and that’s an idea that UEFA president Aleksander Ceferin is firmly behind.
“In the future we have to seriously think about a salary cap,” he said.
“It’s not about the owners, it’s about the value of the competition, because if five clubs will always win then it doesn’t make sense any more.
“But it has to be a collective agreement – every league and UEFA. Because if we do it and the other leagues don’t, then it doesn’t make sense.”
FIFA head honcho Gianni Infantino has also described a salary cap as ‘necessary’, while Ceferin claims that many clubs within the game would welcome a limit on their spending.
“Surprisingly, everyone agrees. Big clubs, small clubs, state-owned clubs, billionaire-owned clubs, everybody agrees.”
Quite how true that is remains to be seen, but UEFA has the power to implement a salary cap on European clubs – that would be much more preferable, and achieve something of a level playing field, than domestic financial fair play rules, which continue to be ritually abused by clubs like Barcelona.
The Catalan giants have been fined £700,000 for their FFP breaches in Spain, but will trouser some £20 million in prize money if, as expected, they wrap up the La Liga title. That’s an opportunity cost if ever there was one….
What is a Salary Cap?
There is some misconception as to what a salary cap actually is.
It’s highly unlikely that an equal system would be introduced, i.e. where all clubs have the same amount to spend on transfers and wages. The big clubs simply wouldn’t sign off on that.
More likely is a system in which teams can spend a certain percentage of their revenues on transfers and player salaries. UEFA, as of 2024, are introducing an update to their financial sustainability rules, and that will cap a club to spending 70% of their annual revenue on their playing squad.
But critics of that kind of salary cap argue that the big clubs still have a major advantage. For example, Manchester United’s annual revenue in 2021/22 was £610 million, so their salary cap would be around £425 million under UEFA’s proposals. But a side like Brentford, whose annual revenue was £140 million for the same period, would have a salary cap of around £98 million – approximately five times less than United.
So while the goalposts would be moved, the outcome would no doubt remain the same. The rich would get richer and horde the best players, while those lower down the food chain would have to scrap to find any competitive advantage they can find.
Which Football Leagues Have a Salary Cap?
At the time of writing, only one major European league – Spain’s La Liga – has implemented a salary cap.
They are the originators of the 70% system that will later be adopted by UEFA for their own FFP rules, so quite simply Spanish clubs can only spend 70% of their annual income on player wages.
That was the main reason behind Barcelona being forced to get rid of Lionel Messi in 2021 – they simply could not account for his astronomical wages after La Liga chiefs imposed a tighter salary cap on the Catalan club.
There was a move to implement a salary cap in League One and Two in England, but that was taken off the table after the Professional Footballers’ Association deemed it to be ‘unlawful and unenforceable’.
There have, at times, been talks within the Premier League about introducing a salary cap, but the big clubs wield so much power that’s unlikely to happen prior to UEFA’s 70% rule as of the 2024/25 season.
So Salary Caps Actually Work?
In American sports, where a ‘hard’ salary cap dictates exactly how much each team can spend on player salaries, there’s an amazing trend for different winners each season.
In the past decade, there’s been seven different Super Bowl winners, four different NBA champions and nine unique MLS Cup victors, which suggests that – from the view of an armchair fan wanting unpredictability – the hard salary cap is a success.
But it’s hard to see how a softer salary cap can work in football, given the huge disparity in revenues between the big clubs and the rest.
And so the beautiful game’s yearly battle between the haves and the have nots will continue….