But they have in a sense. It's just that they were implemented when Germany had just one dominant team. That team still has an advantage in the long run. Bayern Munich are by far the most successful team in the Bundesliga and without doubt the biggest. Borussia Dortmund are enjoying a period of strength, but look what it's getting them going forward. Their top players are being signed by clubs which can offer salaries and longterm competitive prospects which they can't match. Meanwhile, Bayern continue to be at the top end of football revenues and it's very much a matter of when rather than if they will return to the summit of the league. The fact that they are somewhat alone in that respect in German football means that there will be a broader number of teams competing for titles, especially when Munich has periods of transition or poor performance. However, barring gross mismanagment, they will always rise again. Where this has greater implications is in leagues like the Premiership and La Liga, where a glass ceiling of sorts is already established. Since the inception of the Premiership, not a single team has won the title without either already having ample sources of revenue or having a benefactor fund a winning team. Even Blackburn Rovers were heavily bankrolled by Jack Walker, for the time and place where their EPL title was won. Future PSGs and Man Cities be scuppered before they start which in itself is not a bad thing. Having a source of indefinite revenue to buy titles benefits nobody outside the club in question, while placing the financial responsibility of such actions on the clubs can put them at risk themselves, if the owner gets bored and walks away with the source of the prior subsidies. The trouble with this approach though, is that while it prevents the uncompetitive bankrolling of clubs (assuming the rules are robust enough to prevent work-arounds) it also limits the capacity for genuine investment. UEFA have tried to get around that by not punishing investment on facilities and youth development, but that will only get a club so far. Unless your club pioneers vast improvements in training and development, state-of-the-art facilities and academies will probably just get you on par with what the big guns already have in that department. So what do we end up with? The Champions League is already structured to pander to the big clubs. The extention of entry slots to non-champions from the strongest leagues was a result of UEFA's fear of G14 and a breakaway Supeleague. The threat of a Real Madrid or AC Milan never again gracing the competition was enough to make UEFA placate such teams by making entry more achievable. Then came demands based on the theory that the UCL was sold on the names of Madrid, Milan, Barca and Man Utd and that they should be rewarded accordingly with a bigger slice of the pie. Voila... "The Market Pool". A system by which a team's prize-money contains a percentage based on their country's TV revenue. As a result, Man Utd made more than Barcelona in prize-money in the seasons they met in the final, despite Barca winning both meetings. So as it stands, Man Utd, Real Madrid, Barcelona and Bayern Munich et al, will have their exceptionally high revenues locked in. They will continue to get richer as their stronger financial standing locks them into perpetual UCL qualification, allowing the gap in income to increase further from the teams that have no chance of making that competition. Wow - that was long (sorry!) - perhaps I should rework this into a blog entry...
Exactly. Had FFP been applied to every team in the mid-1990s, MLS would not have been able to grow as it has. Remember, MLS reportedly lost $350m in the first five years of its existence, but a lot of that money wasn't only spent on salaries, it was spent to pull a league together. You mention PSG, and to me the surprise isn't that someone is now plowing huge amounts of money into PSG, it's that it hasn't happened sooner. Arsène Wenger once said, "PSG is the only club in the world which is based in an area of 10 million inhabitants and doesn't have any competition (from a rival club)," adding, "What needs to be done is to get a group of investors around the table to provide the club with some financial muscle." http://swissramble.blogspot.com/ Now someone is making that investment, but the team was bought for a comparatively modest sum and it's sitting smack in the middle of a huge market. Personally, I think it makes sense. If Milan and Manchester can support two mega clubs, I suspect Paris can support one. Here's the key: FFP isn't a parity rule, it's a solvency rule. It's trying to curb financial losses booked by many clubs now that may imperil some of them. But given that, it makes it hard to ignore the fact that a handful of clubs have huge financial resources that makes a Rangers-like collapse far less likely and spending these resources is really the only way for them to compete wih some of the club that attained this mega club status before them. Really, which club has more cause for concern, PSG or Real Zaragoza (a small club with reportedly over EUR 33m in debt that lost over EUR 15m? according to the Swiss Rambler)? Finally, we need to remember that MLS itself is going to be playing catch - up with the rest of the clubs in the world's biggest leagues for some time yet. If owners want to put more money in to do that -- to make the product more attractive to investors and sponsers and grow the value of the league -- I'm not sure why that's such a bad thing. So far, MLS has been rather prudent IMO, and I don't see why that won't continue.
Brilliant point. And it's why folks need to define their terms before using them and assuming everybody else is using the same definition. "Salary Cap" has a long history of use in the United States with a well understood meaning. However, the usage of the term "Salary Cap" in the FFP discussions is not the same as commonly used in the United States.
Right on the mark. I've mentioned a couple times in the pro/rel threads that the single greatest advantage MLS has (IMHO) is the ability to pick its owners and its markets. Much of the parity battle is won or lost at the outset. If a league has teams in reasonably sized markets with well capitalized owners, it's much easier for them to agree to revenue sharing and other rules that keep everyone competitive. But look at France, or any other country for that matter. PSG sits smack in the middle of a metro area with over 11 million people. (Wenger said ten in the quote above, but it's now 11). Arles Avignon's revenues are a fraction of of the three big cubs, but they also are in a metro area of 290,000. About 77% of their total revenue comes from shared TV, but their match day revenue is about EUR 2m. How can you possibly "equalize" their opportunity? You might as well say you want a Nobel prize winning physicist and someone reading at an 8th grade level to be equally competitive financially -- unless the Nobel winner is willing to fund the other guy's every act, they start at such different levels it's not possible. Hank Steinbrenner once remarked, "At some point if you don’t want to worry about teams in minor markets, don’t put teams in minor markets or don’t leave teams in minor markets.” For the most part, though Steinbrenner may disagree, that's exactly what U.S. leagues have done. Again, parity starts with the criteria for admission. So UEFA isn't really interested in parity when it pushes FFP, IMO. They are simply trying to inject some financial stability into their system, but in the process I think they remove the only path a club has to grow to where it really can compete with the big boys -- huge injections of money from the owner. The net result may be even less competitive leagues, and those with cash lock in those advantages.
two points i'd make over and over: pro/rel exists because euro countries don't have enough permanently 'major league' markets; ffp will enshrine the existing pecking order among clubs by embedding it into an explicit formula for how clubs are operated.
You cannot equalize opportunity, but you certainly don't need a rule to prevent ways to equalize it. If the concern is a team increasing spending due to rich benefactors, then limit spending increases from year to year (i.e. no wage increases above XYZ amount/percentage/what have you in one season). If the concern is a team spending to the point of administration, then limit debt to a certain percentage of revenue (i.e. no debt higher than 100% of revenue from the previous year). There are many ways to deal with this in ways that do not unfairly stack the deck against lower teams.
Except for white knights like Abramovich, that pecking order is already enshrined.* *That's not ENTIRELY true. Take Reading...their catchment area has grown, and they've grown as a club. Few European countries have cities that have boomed in the last century, where that situation is pretty normal in the US. I'll bet half of the top 10 metro areas weren't in the top 10 a century ago.
i agree. it's just that some of the reaction to ffp seems to be that it'll create a more even playing field. if anything, it turns what already existed into an official formula for how things are to be done.
Again, I agree. Let's look at PSG again. Swiss Rambler says that QSI acquired the club for €100m -- about $125m at the current rate of exchange. Potentially, that's a bargain. Forget ManU or Real Madrid that occupy the rare air at the top of the mountain and consider that Forbes values Chelsea, which used a similar model of injecting cash, at $761m, and Arsenal at $1.29 billion (stadium included). If PSG, through this spending, can in the next ten years really create a mega club worth $750m - $1 billion that can provide content and an audience for their media holdings, they'll look very smart indeed. And how about MLS, which reportedly burned through $350 million as it struggled to gain a foothold. That amounted to about $35 million a team. What are the operating rights and a slice of SUM worth these days? If the expansion fees and the recent sale of part of SUM are accurate, its now well north of that. Montreal paid $40m to get in, and the sale of 25% of SUM to Providence Equity Partners suggests SUM itself is worth about $500m - $600m. AEG, the Hunts and the Krafts didn't get where they are by being dumb. Now, when you look within MLS, it makes sense to try and keep the league competitive because it should allow everyone to improve the value of the team they operate. But they are also all in big markets with deep pocketed owners -- Boston, Chicago, Washington, even Kansas City or Portland. But it would be foolish for MLS to limit spending to what, say, Harrisburg could afford. The economics of that market are completely different from even the smallest MLS outpost. Fortunately, unlike many European countries, MLS has a lot of big markets to consider. And by keeping its teams in large markets, venue sharing and parity rules are far more palatable. Which is why I think we need to be careful about importing ideas and systems wholesale. Again, FFP isn't about parity IMO, but I'm not sure even an equalized hard cap would work in most European leagues. Are they going to tear down the bigger French clubs and make them slash tens of millions of Euros from their budgets so that everyone has a hard cap at roughly the mean payroll -- EUR 30 - 35m? How does Marseilles or Lyon cut $70m in payroll? And even if they did, that's still three times what Avignon is spending. The demographics are just too different, and the systems have to reflect those demographics IMO.
the problem i would consider for psg is that ligue 1 never garnered the interest and the revenue of the other top leagues. frankly, it still isn't as developed as those leagues. that might put a cap on psg's upside. in terms of unusual ownership/financing situations, another interesting case is malaga with al-thani's hot/cold attitude. interestingly, ffp appears on the scene as a possible excuse for not pursuing greater investments, of which the owner would seem to be more than capable. rumors swirl that the real causes of the hitch in the financial plan are of an entirely different, merely 'personal' nature. http://edition.cnn.com/2012/08/22/sport/football/malaga-cazorla-al-thani-football/index.html ""Malaga Club de Futbol has begun an internal restructuring process to adapt to financial fair play standards, with the intention of guaranteeing self-sufficiency and sustainability," Malaga said in an online statement." but again the question is: why should a rich owner like al-thani be hindered by ffp from investing in his soccer franchise, when enforced parity isn't the object anyway? 100% agree.
Yep. And, again, how do you make a hard cap work even if you want to? If the Swiss Rambler's numbers are accurate, total revenue in Ligue 1 last year was EUR 1.058 billion -- or EUR 52.9m per club on average. Fair enough, if you set the payroll cap at 60% of that, you get a max payroll of EUR 31.7m per club. That's 70 odd million less than the big clubs are currently spending, and more than the total revenue of seven others. It won't work.
I believe the last time I researched it, I found that the United States had 51 CSA/MSAs with 1 million or more population. Canada has 6. I also found that Europe (or maybe just the subset of the European Union, I forget) had 49. EDIT - noticed a typo. I meant 51 and not 21 U.S. markets
The big difference between American sports leagues and leagues overseas is revenue sharing (and in some cases expense sharing). What some mistakenly refer to as communism or socialism. (In fact, mercantilism would be far more accurate, but I digress). Most leagues overseas don't have league-wide television contracts, and those that do don't split the revenues equally. And then there's the continental championship overlays. If Manchester United and Chelsea got to keep enough UCL money to cover their costs, then the rest of the payout went into a common fund that all 20 EPL teams split amongst them, you'd have riots in the streets. It's how most NCAA conferences handle bowl money. The Royals revenues don't match the Yankees. Bucks don't bring in what the Lakers do. My Hurricanes can't match the Maple Leafs. But the gaps in those three cases are miniscule compared to what you find in most division one soccer leagues. Edit: Damn autocorrect.
France is actually pretty good -- from the Swiss Rambler: "The distribution model for French TV money is relatively equitable with 50% allocated as an equal share, while the remainder is distributed based on league performance 30% (25% for the current season, 5% for the last five seasons) and the number of times a team is broadcast 20% (over the last five seasons)." http://swissramble.blogspot.com/search/label/Paris Saint-Germain The EUR 518.4 million of TV revenue distributed last season represented about 49% of Ligue 1 revenues (if my math is right). But even if TV was divided into 20 equal shares of EUR 25.9m, it would be very though to come up with a cap number because match day and commercial revenues are vastly different. Seven clubs make EUR 11m or less from commercial sponsorships and match day revenue clubs, which puts them well behind the big clubs (EUR 74m for Marseilles, 63m for Lyon and 56m for PSG). The difference is the data you indicate in your earlier post -- while Europe has plenty of cities with metro populations over 1m or more, those markets are sprinkled over a lot of leagues. France has Paris, three urban areas from 1m - 2m people (Marseilles, Lyon and Lille) and three of 900k - 1m. It's much tougher to make that work.
Here's a thread/list of metro areas in the U.S./Canada (plus others with NASL/USL Pro teams) https://www.bigsoccer.com/community/threads/list-of-metropolitan-areas.1935375/ Just the list Code: Rk Current Metropolitan Area 2011 Census change 1 D1 1996 New York 22,214,083 0.58% NFL MLB NBA NHL MLS 2 D1 1996 Los Angeles 18,081,569 1.14% MLB NBA NHL MLS 3 D1 1998 Chicago 9,729,825 0.45% NFL MLB NBA NHL MLS 4 D1 1996 Washington-Baltimore 8,718,083 1.69% NFL MLB NBA NHL MLS 5 D1 1996 Boston 7,601,061 0.56% NFL MLB NBA NHL MLS 6 D1 2008 San Jose (Bay Area) 7,563,460 1.27% NFL MLB NBA NHL MLS 7 D1 1996 Dallas-Fort Worth 6,887,383 2.32% NFL MLB NBA NHL MLS 8 D1 2010 Philadelphia 6,562,287 0.44% NFL MLB NBA NHL MLS 9 D1 2006 Houston 6,191,434 2.31% NFL MLB NBA MLS 10 D2 2011 Atlanta 5,712,148 1.67% NFL MLB NBA 11 D2 2006 Miami-Ft Lauderdale 5,670,125 1.90% NFL MLB NBA NHL 12 D1 2007 Toronto 5,583,064 CFL MLB NBA NHL MLS 13 Detroit (U.S. only) 5,207,434 -0.22% NFL MLB NBA NHL 14 D1 2009 Seattle 4,269,349 1.67% NFL MLB MLS 15 Phoenix 4,262,236 1.65% NFL MLB NBA NHL 16 D1 2012 Montreal 3,824,221 CFL NHL MLS 17 D2 1995 Minneapolis-St. Paul 3,655,558 1.10% NFL MLB NBA NHL 18 D1 1996 Denver 3,157,520 2.16% NFL MLB NBA NHL MLS 19 San Diego (U.S. only) 3,140,069 1.45% NFL MLB 20 St. Louis 2,882,932 0.16% NFL MLB NHL 21 Cleveland 2,871,084 -0.38% NFL MLB NBA 22 D3 2011 Orlando 2,861,296 1.53% NBA 23 D2 2010 Tampa (Bay Area) 2,824,724 1.49% NFL MLB NHL 24 Sacramento 2,489,230 1.12% NBA 25 D2 2004 San Juan 2,478,905 26 D3 2008 Pittsburgh 2,450,281 0.12% NFL MLB NHL 27 D3 2004 Charlotte 2,442,564 1.66% NFL NBA 28 D1 2011 Vancouver 2,313,328 CFL NHL MLS 29 D1 2011 Portland 2,262,605 1.64% NBA MLS 30 D2 2012 San Antonio 2,194,927 2.45% NBA 31 Cincinnati 2,179,965 0.36% NFL MLB 32 D1 1996 Kansas City 2,122,908 0.86% NFL MLB MLS 33 Indianapolis 2,103,574 1.10% NFL NBA 34 D1 1996 Columbus 2,093,185 1.07% NHL MLS 35 Las Vegas 2,013,326 0.91% 36 Austin 1,826,636 3.84% 37 D2 2007 Raleigh-Durham 1,795,750 2.64% NHL 38 D1 2005 Salt Lake City 1,776,528 1.81% NBA MLS 39 Milwaukee 1,757,604 0.36% NFL MLB NBA 40 Nashville 1,698,651 1.66% NFL NHL 41 Virginia Beach 1,679,894 0.49% 42 Greensboro Triad 1,602,693 0.85% 43 Louisville 1,440,607 0.92% 44 Jacksonville, FL 1,360,251 1.09% NFL 45 Oklahoma City 1,348,333 1.96% NBA 46 Hartford 1,331,406 0.04% 47 Grand Rapids 1,328,440 0.52% 48 Memphis 1,325,605 0.72% NBA 49 Greenville SC 1,281,394 1.14% 50 D3 2006 Richmond 1,269,380 0.88% 51 New Orleans 1,238,228 1.92% NFL NBA 52 Ottawa 1,235,324 NHL 53 Calgary 1,214,839 CFL NHL 54 Buffalo (U.S. only) 1,213,871 -0.16% NFL NHL 55 Birmingham 1,212,800 0.36% 56 Albany 1,168,120 -0.03% 57 D2 2010 Edmonton 1,159,869 CFL NHL 58 D3 2011 Rochester 1,150,469 0.07% 59 Fresno 1,095,829 1.34% 60 D3 2011 Dayton 1,075,683 0.26% 61 Knoxville 1,063,354 0.78% 62 Tulsa 998,438 1.01% 63 Tuscon 989,569 0.95% 64 Honolulu 963,607 1.09% El Paso (U.S. only) 820,970 2.54% Winnipeg 730,105 CFL NHL D3 2004 Harrisburg, PA 687,222 0.61% D3 2010 Charleston, SC 682,121 2.64% D3 2011 Wilmington, NC 369,685 2.03% D3 2011 St. George, Antigua U.S./Mexico cross-border metro areas Tijuana - San Diego 5,009,170 El Paso - Juarez 2,461,538 Reynosa - McAllen 1,700,000
Agreed on the mercantilism as opposed to socialism and I hear that all the time as well. As for the bolded part - did you mean 'riots' in the streets? Or am I missing something?
CRAZY SPENDING in the Championship. Living way beyond their means. No wonder 20 out of 24 clubs voted for financial fair play for the Championship.
And the sanest number in that list is Leeds United - a team with recent history with financial disaster.
To me, it illustrates the danger of having such financial disparity between divisions linked by promotion and relegation. Sure, Swansea spent nearly £6 million more than they made, but they made the playoffs and were promoted. And the prize of promotion is that the EPL will hand those clubs at least £40 million, and perhaps considerably more, to say nothing of their own gate receipts and commercial revenue. Leeds spent just under half of their revenue on wages, but they missed the promotion playoffs by only 3 points that year. You can make an argument that by being responsible, they may have cost the club millions of pounds by losing out on the chance to get back to the Premiership. Teams with good clubs that think they have a realistic chance to get into the promotion race are currently incentivized to spend heavily. It's a dangerous cocktail. But FFP tips too far the other way IMO; it will just ensure that Leeds has a great advantage over clubs like Swansea with much lower turnover.
Because every club shouldn't have to have the same level of "investment" in order to compete. I put "investment" in quotation marks because in this example the money put in will never be recouped. It's more like a donation. Not every club has the sort of deep-pocketed sugar daddy that Malaga (or Chelsea or Man City or PSG now) does, and so clubs that don't want to be left behind have to spend money they don't have just to keep up. The difference between this and enforced parity is that we're talking about those clubs competing with Malaga, not Madrid. The thinking behind FFP is the same principle as doping. One should not have to engage in potentially harmful behavior just because others do.
I don't know, Scott. I'm not sure Holiday's point is invalid. FFP - in the short term - promises financial sanity at the club level. But as each club has its own level, you end up reinforcing the current haves and haves not. Teams at the bottom literally have no way up other than the less than once a lifetime development of a superstar player that can help them win above their station or be sold for tons of money. FFP, as I read it, is a long term recipe for disaster (for the current system). Maybe not as spectacularly bad as the current lack of financial controls, but worse in the slow strangling Kansas City Royals death march. FIFA/UEFA and company are avoiding the harsh reality. The only real sane way to apply financial sanity and preserve any semblance of competition is to do it in an American way where most revenues and expenses are shared and player costs are set within a specific range. The main reason that this won't work in Europe is that it breaks down with pro/rel. It only works in a closed system. To be honest, as I think as I type, FFP may be hastening the eventuality of a European SuperLeague. A decade of FFP, the teams that make the UCL will basically be locked in. As the stratification of competition in domestic first divisions deepens, the only real competition for the top teams in UEFA will be each other.