Policing the cap would also result in higher administration issues within the Premier League itself. A ‘live’ cap would be a necessity to make sure each club was monitored constantly and punished immediately. And what punishment to administer?
One form of ‘punishment’ popular amongst America organisations is the Luxury Tax. What this does is to monitor if teams breach the cap. Any monies found to be paid to a player over the limit agreed at the start of the season will be ‘taxed’ at 22%. This money will then be taken by the governing body. This is for a first offence and increases to 30% for teams that have breached three times, and so on.
One benefit of this punishment is that it puts money back into the game. This money can be distributed through various grass-roots schemes and charitable aspects as is the case in baseball. The flaw of it seems obvious to anyone. Clubs like Manchester City and Chelsea could easily afford the Luxury Tax and would probably be able to consume any additional costs, although the ascending scale of tax might make it only a short term solution.
At the other end of the severity scale we can go back to the NRL. The Melbourne Storm rugby league team have been stripped of two titles for salary cap breaches. Many teams have been deducted points. Would the Premier League have the courage to dock points from a team, particularly if the breach was discovered towards the end of a season, perhaps costing a top four spot, or causing relegation? I can’t help but feel the bigger clubs would also apply pressure to minimise any potential punishment.
To implement the cap just in the Premier League would rightly cause the top players to seek moves elsewhere. Previously Spain was somewhat of a tax haven (taxing at only 24%). However, this has now changed to 47%, bringing it closer to the UK’s 50%. So a player being capped at ‘only’ £50,000 a week (and thus still falling into the 50% tax bracket) would see a move to Spain or Italy as more appealing. But if the cap was implemented in other countries, which from a competitive standpoint might not be a bad thing (Spain has seen three league winners in the past ten years and Italy: four) then players would face the same wage regulations wherever they went.
And this appears to be close to the overall solution. It’s not only English teams swimming in debt. Of the 20 teams commencing this season’s La Liga competition six of them are in administration. The combined debt of Spanish clubs stands at around £3billion. Even Barcelona, with all their dominance owes £350million and together with Real Madrid total almost £1billion of the combined Spanish debt.
With such debts burdening clubs of this size and stature something has to be done. Football has gone past the level of ‘the rich man’s playground’ and is seriously in danger of collapsing into itself. The FFP are a good start but more needs to be done and I believe a salary cap would be an important step in clubs becoming self-sufficient. After all player wages are the biggest drain on a team’s economy. Of course, there would be other issues to consider; the discrepancy of various exchange rates, the maximum and minimum caps available and also whether things like the Luxury Tax would need to be established.
Football is the biggest sport in the world and, at the top end is capable of generating hundreds of millions of pounds for its clubs. This would mean they could comfortably pay a player a fantastic wage. The likes of Rooney could still earn £50,000 a week and pursue all his endorsements as well, making him a very rich man. But in this age of austerity football needs to pull itself back into the real world because, like the global economy in general, it simply cannot continue the way it is.
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