Football Finance: Salary caps the future?

I love Goooooollllllllddddd (not David)

In June 2003, Roman Abramovich took control of Chelsea Football Club and took the football world to a whole new level. With the unrivaled financial muscle that was made available to spend in the transfer market, Chelsea became a dominant force linked to transfers with jaw-dropping sums.

Never before had football seen anything like what was to develop from the summer of 2003. In the summer of 2002, Manchester United signed Rio Ferdinand from Leeds United for an English record in the fee of £30million, and along with the signing of Ricardo for £1.5million, their total spending for the summer was £31.5million. In the summer of 2003, Chelsea’s total spending came to over £100million, following the new era under Abramovich. Since then, football has spiralled out of control. Billionaires from around the world have taken control at many English and European clubs, transfer records have been smased with the likes of Ronaldo costing Real Madrid £80million and players like Wayne Rooney on wages of £250,000 a week. Football has rapidly changed from a sport to a business.

A lot of column inches in this country are taken up by reports of players not renewing contracts due to disagreements about wages, it seems now everyone wants to be the highest paid at their club. Player power is at an all time high as some players are prepared not to play and pick up a pay-cheque in order to wait for their contract to expire so they can pick up a lucrative contract elsewhere. Is this a lack of loyalty? Of course it is. There is no, or little, loyalty in the game anymore. Players are more interested in their bank balance than returning the same love and dedication that their current club’s fans show them.

Football professionals in England seem to forget they are role models to the future generation of the sport. Players who think they know loyalty should be brought back down to Earth and take a look at Joseba Etxeberria. Etxeberria, the man who signed for Athletic Bilbao as a 17 year old, retired after 15 years service to the club, and signed a one-year contract extension where he would play his final season for free as a gesture of appreciation to the fans that showed him their appreciation.

even Savage is laughing all the way to the bank...

Etxeberria is a prime example of loyalty, and unfortunately, I can’t see that happening in the English game. With all these record-breaking transfers and wage packets, players have become hypnotised. Players have been mislead into the understanding of the philosophy of football. They have forgotten the sole reason why they worked so hard for a career in the sport – because they loved to play the game. This has become a problem which has evolved ever since the big money transfers and huge wage packets that clubs are offering players. A problem which is extremely close to being unrepairable, unless the governing bodies of the world introduce a solution that can restore the damage.

The FA already run a voluntary salary cap in League One and League Two, where clubs in those divisions are limited to spending no more than 60% of their income on players’ salaries. Maybe now is the time to introduce a ‘don’t spend more than you earn’ attitude into the Premier League. This would be a great benefit, as without these caps, there is a risk that teams will overspend in an attempt to be triumphant now at the expense of long-term stability.

Just look at what happened to Leeds United and Portsmouth. Could the FA impose a points penalty to clubs for over-spending on players’ wages? A fair thought, but an idea which doesn’t seem realistic to introduce until a way is found in cutting players’ salaries to an amount where the league can still remain competitive. The trouble is this league now attracts the world’s biggest fat-cats who treat this sport like a game of Football Manager.

UEFA are introducing a ‘Financial Fair Play Rule’, in 2012, where clubs will not be allowed to spend more than they earn on transfers and wages. If clubs are found to have breached this rule by the 2014-2015 season, they could be excluded from European competitions. This is a step in the right direction. This is a positive step in developing youth infrastructure, and taking off the pressure on big salaries and transfers. Perhaps the FA could implement a similar rule where clubs could face a ‘three-strikes and your out’ policy, starting with a fine, a points penalty, and ultimately relegation. The trouble is that the Premier League now attracts the fat cats in the world who treat the Premiership like a game of real-life Football Manager. Football is not a sport anymore, it’s a business. Until these rules, or some similar, can be put into practice quickly, the game of football that we all love will continue to spiral down a black hole.

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  1. Dave G says:

    Footballers are getting on my nerves to be honest-far too much money and don’t give much back to society. Salary caps are a good thing but won’t mean that footballers don’t stop getting paid way too much

  2. david martin says:

    Save our game : wage caps and reform to save soccer
    With the growing crises in football – strikes in Spain, tax disputes in Italy, massive debts and clubs going into administration in England, not to mention the on-going annoyance of knowing that it has become virtually impossible for a club without enormous funds or billionaire backing to win the Premiership, it is time for real reform, going well beyond what is proposed by Michel Platini. To save our game and return it to the fans I propose (Europe wide at least):
    • A first team squad of 26 to be named at the start of the season.
    • Wages for this squad to be limited to £10 million, plus a bonus related to average home gate (e.g. an average gate of 20,000 would give a 20% bonus so could spend £12 million). This would put fans (rather than sponsors and billionaire owners) back at the heart of the game.
    • Transfers limited to the same amount in any year plus any money made from selling players.
    • TV money divided equally between all the clubs.
    Plus non-financial reforms:
    • 13 of the 26 squad players must be eligible to play for the national team.
    • 6 players must be local; i.e. born within 50 km (31 miles) of the ground (or rather in a “catchment area” around the ground equivalent to the area of a circle 100km in diameter).
    These wage limits are by no means poverty wages – most teams could pay players an average of over half a million per year – but it would create a much more level playing field to replace the ridiculous discrepancy in spending that exists now (wage bills of 174 million at Chelsea, 133 and 132 million at Man City and Man Utd, but 13m at Blackpool*). The reforms would push clubs to look after fans – and if they had spare cash due to the much lower wage bills they could make ground improvements + reduce ticket prices. The national and local eligibility rules would still allow a full team (plus 2 subs) of foreign players, but for long term success clubs would know that they had to develop national players and give local kids a chance. And it would get back to the old formula of success being built on loyal and passionate fans, players who want to play for a team rather than for a financial corporation, and traditions of good coaching and management. The profiteers and financiers have ruined countries and lives, and now they’re coming after our game. Let’s stop them.
    *Deloitte Annual Review of Football Finances June 2011, and Guardian Inside Sport Special Report on Premier League Finances 19/05/2011

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