Its safe to say that the majority of supporters across Europe are quietly jealous of some of the wages paid to footballers. The ability to earn in a week what the average worker earns in years could be seen as outrageous. 

The more money that corporations and foreign owners invest in the game, the more players could demand, but what solutions are there to this problem and, more to the point, does a solution actually exist? Or are we too far down the road to ruin to find a way back?

Although the percentage of a club’s turnover spent on wages is, bar Germany, pretty much the same across the five biggest leagues in Europe, the fact that the total income earned by clubs in the Premier League is considerably higher in comparison to the other top leagues means the 64 percent figure converts to a higher amount being spent on wages, with Chelsea being the forerunners spending 132 million pounds in 2006-07 alone. 

There is, of course, the belief that the more money that is being spent on wages, the more some clubs will want to increase their revenue in other areas, like ticket prices and merchandise, in order to contribute towards the payments to players.

The modern game appears to be slowly losing touch with the traditional view that football is a working class sport and should be affordable to everyone, with one clubs ticket prices reaching 94 pounds for a game, the idea of affordable football looks to be moving away from the working class supporter for some clubs and more towards the wealthier followers and corporate businessmen.

Is there a solution?

For quite a few years now there have been endless debates between fans, remedies offered by clubs and high profile meetings amongst governing body officials to find a solution.

However, we don’t seem to be any closer to solving the problem, with wages continuing to escalate as we try and search for a solution.

One idea that has been offered around for some time now is a wage cap, something that has been implemented in other sports across the globe, as well as volunteraly by some lower league clubs, but is yet to be applied to football in Europe on a widespread basis.

Basically a salary cap is, for most sports, a roof or a maximum amount a club is allowed to spend on wages for players and backroom staff over the course of a year. This can be as a ‘hard’ cap set limit or as a ‘soft’ cap percentage of income figure.

The hope of introducing a salary cap is that, amongst other reasons, players wont be dictated by money when choosing where they want to play, richer clubs won’t be able to entice them with considerably higher wages, and it should also stop the stock piling of top quality players by clubs with wealth.

This could also lead to poorer clubs having a better chance to increase the quality of their squad and, ultimately, a better income without the risk of bankruptcy in trying to maintain the high wage demands.

There is also the idea it helps to create a more even playing field for all the teams in the league so that it is not dominated by a few, becoming predictable and boring with the same teams winning every year.

Some might say, more importantly, with the inability to pay for many high wage earning players at one time, clubs could have to look towards developing young home grown players instead, helping to keep the wage bill down.

Is a salary cap the answer?

Now to some, a salary cap of any form may seem like the most sensible and obvious thing to do, especially as it appears to have worked in most sports in other countries.

But with a little more information on the restrictions that would exist with the proposed salary cap in European football, we can see that it is not as straightforward as we first thought or hoped.

There are two main options for the type of salary cap that could be imposed on football; one is called a ‘soft’ cap, based on a percentage of a clubs annual income, the other is called a ‘hard’ cap, which is a blanket fixed amount across every team and league, regardless of profit.

There is the option for an individual cap, which would mean no player is allowed to earn more than a set amount, say 50,000 pounds, but this goes against certain European employment and competition laws.

Unfortunately, it would be very difficult to impose any of these systems when you take in to consideration some of these factors:

The success of a salary cap in most North American sports, for example, can be down to the fact that all the respective governing bodies consist of one league with no competition from rivals, so there is no desire for a player to move to another league within their chosen sport, that has no salary cap. 

The NBA, NFL and MLB all consist of one league with a set amount of teams and no promotion or relegation, whereas with European football you have, amongst others, The Premier league, La Liga, Serie A, and the Bundesliga, all made up of different divisions and all competing for the best players in order to improve the quality of the league, with the hope of better profits.

With the freedom of transfers between the competing leagues in Europe, if one league, let’s say the Premier League, imposed a salary cap it would leave the option for players wanting to earn more money to move to a different league, which could lead to a decline in the quality of the league implementing the salary cap and furthermore a loss of league earnings.

Hard Salary Cap

The first problem might be at what limit do you set the cap?

Set it too high and the cap will have no affect and serve no purpose as the majority of teams would never get near the set limit, too low and the bigger clubs would severely suffer and lose a lot of players, possibly leading to financial ruin.

There is of course the question; is it fair to penalize the more successful clubs who have run their businesses properly?

If a hard cap was introduced across Europe, different tax rates and systems would mean players from different countries would take home a greater or lesser amount compared to their counterparts (Flat tax and Progressive tax systems for example).

Although most countries and their top flight leagues operate with the euro as their currency, there are still some who don’t, notably England and the Pound, so ever changing exchange rates and currency fluctuations would make it difficult to maintain a fair and consistent system.

You would also have to take into consideration things like the cost of living from country to country; 100,000 euro’s can be better spent in one country compared to another using the same currency.

If a hard salary cap system was applied dependant on the position of the league, for instance, division four would have a lower cap than division one, when a top-tier club is relegated, their wage expenditure could be considerably greater than the cap for the lower division they had been relegated in to.

Soft Salary Cap

With so many clubs earning vastly different incomes, if the soft cap was imposed, it may not alter the divide between the rich and poor clubs that some people hope it might do.

If one club earns one hundred million pounds in a year and another club earns fifteen million, with the salary cap set at sixty percent, the amount spent on wages would still be considerably different.

If the salary cap is that of a percentage of a clubs profit and turnover then a club can simply increase this by any means necessary, for example increasing the cost of ticket prices and merchandising, in turn leading to a greater percentage being allowed to be spent on wages.

The poorer teams would find it difficult to attract a better quality of player, without the ability to spend the money they don’t have on the wages required or demanded by better quality players and instead needing to bring in average players to stay within the salary cap.

Also a newly promoted team wouldn’t be able to utilise the money earned from TV rights gained from entering the premier league as the money isn’t shown on the balance sheet until the next season.

A soft cap would simply keep the top teams at the top but at the same time minimising the chance for smaller teams to join them.

There is of course the possibility of loop holes to the rule, which is evident in other sports, with bonuses being paid to players instead of a higher basic wage, or sponsors contributing towards a player’s salary instead of the club footing the whole amount of the wage paid to the player.

Do we even need salary caps?

Some would argue that the money paid to players is from revenue generated from the sport itself and there really is not any need to implement any form of cap.

There is also the amount of tax paid by the players, which is beneficial to the country they play in and can be seen as giving money back to the supporters indirectly.

Another view could be the moral issue of limiting how much someone can earn in their career, at the end of the day its a job and maybe they deserve to have the same rules as any worker in the European working union. 

What other solutions are there to explore?

Something that is currently being used in Major League Baseball is a luxury tax whilst using a hard salary cap.

If a club spends above the maximum percentage allowed annually for wages, then they would be taxed dependant on the amount they go over the limit in place and the money would be distributed back in to the sport.

However, some would argue that this wouldn’t stop the continuous gap between rich and poor clubs, with richer clubs still being able to afford the tax if and when imposed, which was apparently still evident in the MLB league a few years ago.

Another possible idea could be to set a wage limit for all new signings and an increase in salary with the more years a player is with the club, but as stated before, and probably with many possible ideas to solve the problem, loopholes could be exposed with bonuses and outside investment.

Maybe we really need to sit down all the different governing bodies from all the leagues from across Europe, pull apart the entire structure of football and start again with a completely new system, learn from our mistakes, evolve new ideas, look at other sports and take the positives and try to adapt them to suit the modern game of global football.

The way forward could be to try and take the money out of the game as much as possible:

∙Abolish transfer fees altogether.

∙A limit each club is allowed to spend on transfers each season.

∙League standings should account for pride and not pounds.

∙Money should be distributed evenly across the teams and not based on league position.

∙Some form of Hard Salary Cap including a luxury tax with severe penalties, like fifteen point deductions if exceeded, so richer clubs cannot consistently break the percentage.

These are of course, not solutions to a possible problem, although answers can sometimes stem from extreme ideas.          

Whatever happens with the rules in the future and no matter how much we try to eliminate the money element in football, we will always find it very difficult to eliminate the greed that will always be involved with the sport and with human nature in general.