Does Europe now have a salary cap at the club level (unlike USA's salary cap at league level)?

Discussion in 'UEFA and Europe' started by pc4th, Jun 26, 2010.

  1. pc4th

    pc4th New Member

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    http://www.uefa.com/uefa/footballfirst/protectingthegame/financialfairplay/news/newsid=1494481.html

    UEFA will be using a fair market value test to prevent rich owners from gaming the system.

    http://www.telegraph.co.uk/sport/fo...ncial-fair-play-rules-set-to-be-approved.html

    http://www.independent.co.uk/sport/...to-pass-financial-fair-play-test-1983602.html

    Introductionary period:

    The financial fair play is a salary cap at the club level in which each club can't spend more than it makes. In essence, it is a salary cap that is tailored to each individual club. Granted, this rule will only affect those clubs who have European aspirations. For many leagues, this will affect about half the teams in the league.

    An example of American league level salary cap is MLS where each team have $2.55 mil to spend players. Or NFL league level salary cap where each team have $127 million to spend on players. NHL where teams can spend at most $65 million and NBA where teams can spend at most $75 million, though a $1:1 luxury tax is allowed for teams who want to exceed the cap.


  2. Cirdan

    Cirdan Member

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    It's pretty different from a salary cap.

    First, it doesn't specifically cap salarys, it caps (almost) all expenses. And it isn't even really a cap, it just forbids methods to finance running expenses that are deemed dangerous - mainly debts and investors.

    Then, the American salary cap is a measure to even the playing field between the club. UEFAs fair play is not, it's done primarily to prevent clubs from giving in to pressure from fans and media and overspend (like Portsmouth did and like Milans fans try to pressure their club into), and as an added bonus, to preserve the status quo and prevent upstarts from entering the playing field of the traditional football powers.
  3. SportBoy333

    SportBoy333 Member

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    Whatever it takes to make the English teams develop their own players instead of relying heavily on foreigners. Benetiz didnt develop a single young player at Liverpool.
  4. pc4th

    pc4th New Member

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    You're right. It's not a salary cap since it doesn't cap salary. It's a "spending" cap since it caps spending.

    And only apply to teams who want to play in UEFA tournaments and need a UEFA license.


  5. guignol

    guignol Moderator Staff Member

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    it doesn't even "cap" expenses. at most it simply caps debt.

    it doesn't prevent "upstarts" from coming in to invest their own money, only from using the leverage of that money to build a financial house of cards and spend hundreds of millions for free.
  6. pc4th

    pc4th New Member

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    Links? UEFA clearly stated that expense can't be higher than revenue. That's a cap on expense.

    http://www.uefa.com/uefa/footballfirst/protectingthegame/financialfairplay/news/newsid=1494481.html

    It caps spending. A team can't spend more than it makes.

    upstarts can spend money on stadium, academy etc....

    But they can't game the system like buying $10 mil skybox ....UEFA will test for market value of revenue and expense transaction.

    Here's UEFA Club Licensing and Financial Fair Play Regulations

    Read it for yourself. I skimmed through it and it does state that UEFA will test for fair market value so teams can't cheat the system. And the word break-even appears numerous time.

    http://en.uefa.com/MultimediaFiles/Download/uefaorg/Clublicensing/01/50/09/12/1500912_DOWNLOAD.pdf




  7. guignol

    guignol Moderator Staff Member

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    and to you debt is what exactly*?

    if they said no one spends more than 100M€ no matter what revenues are that would be capping spending. but if you generate 300M€ you can spend that.

    sure that's a simplification, but if you can't discriminate between expense and expenditure don't start giving us lectures on public accountancy, mister madoff.

    *"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." (micawber's principle)
  8. Cirdan

    Cirdan Member

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    It doesn't cap debts. You are allowed to have debts, you are allowed to make new debts, as long as they are for certain "good" investments (infrastructure [stadium], youth development) and there's no limit at all regarding the amount of debt, so where would be the cap? And investments from the owner fall under the same category as debts, and thus it certainly prevents upstarts from investing their own money as they wish - ManCity or Chelsea will not be possible under the new rules.

    If you ask me, it doesn't really cap anything. It regulates spending, but there's no real cap.
  9. Duck Manson

    Duck Manson Member+

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    It prevents clubs from running in the red. You can have as much debt as you want as long as you can run a steady ship. Arsenal is a good example, with huge debt, they run a hefty profit and would be allowed to participate in European Competition. Liverpool on the other hand would not be allowed into Europe.
  10. "Eisenfuß" Eilts

    "Eisenfuß" Eilts Member

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    First "victim" is Real Mallorca, so Villareal plays Euro league instead of them.

    source
  11. Dahin84

    Dahin84 New Member

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    I believe that European teams should have spending cap so they stop these crazy expensive transfers. Football became big business instead of it being a sport.
  12. Duck Manson

    Duck Manson Member+

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    A €70m cap on salaries across Europe would be golden.
  13. guignol

    guignol Moderator Staff Member

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    i actually feel 70M€ would be too high. how many clubs today do or can lay out that much in salary? 8? 10? OL has the highest wage budget in france at 60M€ and already feel the need to lean down regardless of any imposed cap.

    and if a salary cap were to have a real effect on international competition it would need to allow at lot more clubs than OL to get onto that "level" playing field. it would have to give clubs outside the top 2-4 clubs in the top 5 leagues a fighting chance.
  14. goliath74

    goliath74 Member

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    We could have a similar effect by simply forcing clubs to field a few players that they developed through their youth systems. Say, a club would be required to field 3 such players at all times.
  15. guignol

    guignol Moderator Staff Member

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    i like this for three reasons: 1) a lot easier to implement from a legal standpoint 2) a positive rather than negative measure and 3) my club turns out rakes and rakes of young players.
  16. Duck Manson

    Duck Manson Member+

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    I think it's too high as well. €30m would probably be better. But it would be a step in the right direction.

    The big clubs would have to sell half their players, who would then sign with 'lesser teams', who would then have their revenue increased because of the jump in player talent and marketability. I think many many teams would end up in that €60-70m range that are not close to it today. It's easier to sell your club to a sponsor if you have some exciting talents.

    The real question is what the teams would do with their income. There would have to be some serious revenue sharing. Maybe have a soft €30m cap and a hard €60m cap. For every Euro over €30m the team would pay a Euro for Euro penalty, that would then be distributed among the teams under the soft cap. Kind of like the NBA has today. Would be interesting.
  17. Duck Manson

    Duck Manson Member+

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    I'm all for it. But it wouldn't really change anything. The big clubs have so much money they could send three idiots out there and compensate with buying Ronaldo, Kaka, Benzema, Alonso, etc. I don't think it's right that teams have to play a guy they wouldn't normally play because of where he was playing in his teenage years. A salary cap would spread the talent around. Which is what we all want, no? If we had a €30m cap we could potentially have 50 teams good enough to win the Champions League. How awesome would that be.

    There could be a side rule that players from their own youth systems didn't count against the cap. That should force teams into developing their own players.
  18. pc4th

    pc4th New Member

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    It is not a salary cap since it does not cap a player salary. However,

    Is it a spending cap? Since it limits how much a club can spend? And since it prevents clubs from overspending?



    Anyhow,

    http://www.guardian.co.uk/football/2010/aug/26/michel-platini-champions-league
    The Uefa president is adamant that clubs who fail to meet new financial fair play laws will be removed from Europe


    http://www.uefa.com/uefa/footballfirst/protectingthegame/financialfairplay/news/newsid=1520059.html

    Financial fair play crucial for football's future
    UEFA.com: Friday 27 August 2010, 8.11CET







    ---------------------------------------------------------------------------

    The best article about UEFA financial fair play is this one (must read if you want to understand UEFA financial fair play better).
    http://swissramble.blogspot.com/2010/05/uefa-say-fair-play-to-arsenal.html





    And this analysis explains why UEFA financial fair play is desirable to most football clubs owners. Inter lost €509 million in the last 3 years.
    http://swissramble.blogspot.com/2010/08/price-of-inters-success.html

    [​IMG]

    Excerpt:








    [​IMG]


    Inter spending is slowing (in fact, Inter is making a profit from player transfer 09/10 and 10/11 season)
    [​IMG]
  19. laasan

    laasan Member

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    the drawback of course is that you'd also delude the quality of the teams, meaning a decrease in football quality on display. which in turn would result in lower incomes for the clubs.
  20. Duck Manson

    Duck Manson Member+

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    I don't believe that would happen. The big teams would still have the best players. Just not every damn one of them like you see in La Liga with Real Madrid and Barca. You really think EPL would drop in revenue if some of the smaller teams got some of the big teams players? I actually think it would make for a more fun and competitive league and instead of everyone being a United fan maybe it could be a bit more spread around.
  21. guignol

    guignol Moderator Staff Member

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    meaning chelsea and arsenal will no longer be drubbing the bottom of the table 6-0?

    meaning people wouldn't have to take out a second mortgage for their season ticket?

    DEAR GOD LET IT BE SO!
  22. pc4th

    pc4th New Member

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    The Big Spenders Turn Frugal

    As the transfer window closes on English football's transfer scene, there's little action to see

    Jonathan Clegg
    WSJ September 1, 2010


  23. pc4th

    pc4th New Member

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    http://www.bloomberg.com/news/2010-...ys-29-decline-in-player-trading-is-good-.html
    Platini Says 29 Percent Drop in Player Trading Is `Good' News

  24. HoodyV

    HoodyV New Member

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    How do salary caps effect the sport in Europe? What do you think MLS needs to become better? Just time? Better coaching staff? Or is European blood just simply better? What gives European football the edge over MLS?
  25. 96Squig

    96Squig Member

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    The fact that we put the majority of our sports ressources, be they manpower, talent, time or money, into football, whereas in the US it is shared by a lot of other sports. Hockey, Cricket, Rugby, skiing or athletics are popular in various countries in Europe, but football is popular almost everywhere. I don't think the MLS can do much by itself to change that in the mid term, it would need massive screw ups by the other leagues or even more immigration to the US to fundamentally change that.

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