EPL 'needs wage cap'

[Achtung]

http://news.bbc.co.uk/sport2/hi/football/3478725.stm

A Government report is urging the Premier League to consider introducing a wage cap.

Some very interesting points made in this report, and it will be interesting to see where things go from here. That gap between the haves and have-nots is definitely growing, and hopefully something can be done about it.

[Alan_V]

Not in the article I read. It has been suggested that a salary cap be experimented with in the lower divisions. If successful, a cap in the EPL would be studied. It's widely felt that if a cap were instituted, there would be a mass exodus of talented players looking to ply their trade in countries where a cap does not exist. That would leave the top division a shadow of it's former self.

[bostonsoccermdl]

unless it was demanded from UEFA, it wouldnt work (although I agree it should help in theory.)


for one, unless all competitve leagues agreed, which they wont, the best players would leave the EPL to play in teh Budesliga or La Liga, Serie A, etc.

Champions league complicates everything also..

[sinner78]

Any league which starts a wage cap would see all the best players walk out as has already been stated....If the premiership started a wage cap then your henry's ,van nistelrooy's,etc.. would be off to spain like a shot.

[Clan]

Originally posted by sinner_ronald_monk
Any league which starts a wage cap would see all the best players walk out as has already been stated....If the premiership started a wage cap then your henry's ,van nistelrooy's,etc.. would be off to spain like a shot.

...and who could blame them really?

Not to mention the harm it would do us in European club football as we came up against teams that would soon be vastly superior, gaining in strength each and every year whilsy ours stagnated.

Stupid idea for one league only to do it.

[655321]

Terrible, terrible idea...not to mention it will NEVER happen.

[Red Devil 106]

Yeah, this is a very tricky thing. Would they consider having those players walk away and have attendence drop as a matter of principle? Probably not. But hey, it would be nice to see someone else win for a change besides Manchester or Arsenal. And monk is right: unless it's worldwide, all the good players are gone... probably all off to Real Madrid or something.

[Matt Clark]

But hey, it would be nice to see someone else win for a change besides Manchester or Arsenal.

Which is a more or less totally separate issue from the impact of money on the competitive balance of a league. As Chelsea's soon-to-be-confirmed trophyless season will prove yet again.

A salary cap can only work if UEFA instigates it across the continent. Which it can't because it would contravene about a zillion EU regulations ... entire offices in Brussles and Strasbourg would literally melt at the very mention of the idea.

So in the absence of that basic prerequisite, only an absolute cretin would seek to impose such a measure unilaterally. Which does not, it has to be admitted, put it beyond the present UK government, but let's not consider it all that great a threat.

[sendorange]

A wage cap wouldn't come from the government, it would have to be something a majority of the Premiership clubs agree to.

I heard one wage cap being considered was going to be based on a percentage of each club's turnover, say 70%. Not sure how that would work though.

I suppose something has to be done to stop the Peter Ridsdale's of this world destroying clubs for their own vain glory.

[DigitalTron]

Before everyone goes ballistic about this, realize that the salary cap being suggested is quite different than the one in place in American sports. It is a percentage of total revenue.

As an example, right now, Arsenal are over the 60% mark for a salary cap, but might be below the 70% mark suggested earlier. Manchester United, Liverpool, Newcastle, and most others are below even the 60% mark being suggested. Obviously, Leeds is way out of whack, but most clubs are not. What this sort of salary cap would manage wouldn't be the Van Nistelrooy's and Henry's, but the Robbie Fowler's when he was at Leeds.

IMHO, it's not a bad idea. The real trick is managing it when a team gets relegated, because while everyone in England and most people who follow the Premiership love the concept of relegation/promotion, it is a financial nightmare. The FA needs to implement an automatic salary re-adjustment for the players if a team gets relegated. Let the clubs manage their own salary increases when they get promoted, but mandate a decrease upon relegation. This makes the players fight to avoid relegation, and it allows the club to survive the financial disaster that is relegation. I'm in the minority, and I recognize that, but I'd prefer to see league's stabilized by the elimination of pro/rel. Realizing that this is extremely unlikely, there needs to be some FA imposed solution to the relegation financial implications. Otherwise, teams are always going to be dancing around administration, which is a horrible thing for the fans, the club, and the players.

-Digital

[Matt Clark]

The answer to the growing financial disparity between the top flight and lower divisions is not a salary cap but a more equitable distribution of the revenue generated by the game. But that ship sailed when the FA caved in to the big clubs and allowed the formation of the Premier League.

You cannot force clubs to be financiall responsible by artificial means such as a salary cap. If you allow market economics in sport then only the market can sort out the irregularities. As Leeds fans are finding out now, there's nothing like complete melt-down to bring about some financial realism in football club boardrooms.

[RichardL]

Originally posted by DigitalTron
The real trick is managing it when a team gets relegated, because while everyone in England and most people who follow the Premiership love the concept of relegation/promotion, it is a financial nightmare. The FA needs to implement an automatic salary re-adjustment for the players if a team gets relegated.

but I'd prefer to see league's stabilized by the elimination of pro/rel.


The problem isn't pro/rel itself, it's the massive discrepency in TV revenues.

Take the 10 clubs who were relegated last season and compare their average crowds this year and last

West Ham 30.787 -10,6%
Sunderland 26.304 -33,7%
WBA 24.445 -8,6%

Sheff Weds 22,521 +10.8%
Brighton 6,231 -6.3%
Grimsby 4,587 -19.3%

Huddersfield 9,779 +2.9%
Mansfield 4,924 +0.9%
Northampton 4,854 -6.8%
Cheltenham 4,118 -11.9%

On average, each relegated club has seen their crowds fall by 8.3%. Not ideal, but not exactly the doomsday scenario it's being presented as (in contrast the average rise for the 12 promoted clubs is 19.7%).


When you look at just the drop in TV revenues though the gap from premier to Div 1 is something like -98% (for other divisions the gap is not particularly significant). It's eased a bit by parachute payments but it leaves clubs with the awkward choice of running at a big loss for for a season in a gambe to come straight back up, or restructuring and taking the real risk of having an uncompetitive team.

As has been said, the solution is to redistribute the TV money, if not equally, then in a way that prevents such yawning chasms in revenue between the divisions. Sadly, until the premiership chairmen can start to see beyond their own short term gain, and the FA can get their act together and represent the needs of the whole game in the country, rather than their own elite little club, nothing will change.

[chriswalk27]

I agree with you Richard and think maybe just a touch more of the TV money should be sent to the 1st division but what I would really like to see is some games get shown over in the states. I would love to see 2 or 3 Division 1 games every week along with the Premiership games they already show on Fox Sports World. Have ESPN show it over bowling or women's college basketball for all I care but someone in this country needs to step up and show some 1st division games.




Chris Walker

[nicephoras]

Originally posted by Matt Clark
Which is a more or less totally separate issue from the impact of money on the competitive balance of a league. As Chelsea's soon-to-be-confirmed trophyless season will prove yet again.

Oh ye of little faith! :) If we beat Arsenal this weekend, we'll be 3 points back; we're also still in the CL, and the Stuttgart draw looks a lot less fearsome now that they have started this year with a resounding thud. For about 9 new players brought in, this certainly isn't bad for the first year. Now, if we can just get Duff and Crespo healthy again.............

Originally posted by Matt Clark
A salary cap can only work if UEFA instigates it across the continent. Which it can't because it would contravene about a zillion EU regulations ... entire offices in Brussles and Strasbourg would literally melt at the very mention of the idea.

No kidding. I would have thought that the Bosman ruling would stop any such stupid ideas. Under the EU's right to work laws, you'd have a better chance of making hunting humans legal, so long as the prey were paid competitively.

Originally posted by Matt Clark
So in the absence of that basic prerequisite, only an absolute cretin would seek to impose such a measure unilaterally. Which does not, it has to be admitted, put it beyond the present UK government, but let's not consider it all that great a threat.

No worries Matt. Once Blair finally manages to toady up to Bush enough, we'll just make England the 51st state and unilaterally impose a salary cap on you. Because our current administration would be that dumb.

[denver_mugwamp]

Originally posted by DigitalTron
Before everyone goes ballistic about this, realize that the salary cap being suggested is quite different than the one in place in American sports. It is a percentage of total revenue.


Um, Digital, the salary caps in place for the NBA and NFL are based on a percentage of revenue. They go up or down depending on the total income of the league, including TV. The concept has managed to keep labor peace while making sure that everybody makes money. Quite an accomplishment if you ask me. That said, I don't think the EPL is within two or three lightyears of adopting anything of the sort. It boggles the mind to think abut how you would define total income. Does it include the lower divisions? How about Champions League, FA Cup, and UEFA Cup revenue? Many questions. No answers.

[Emile]

Wouldn't a redirection of TV money also have the effect of sending players to Spain? It seems to me any attempt to create more fiscal parity within the Premiership structure is going to have some effect on top wages. But, England has always paid less than Italy and Spain, and still managed a high level of play, so better revenue-sharing or a salary cap would not be the end of the world, IMO.

A cap based on team revenue would encourage clubs to really sell their product (which could be good or bad I suppose), and its always possible, if unlikely, that increased parity would lead to higher receipts and therefore higher wages across the board. However, I would not want to see European offices literally melt, as it could potentially burn 100's of Flemish bureaucrats to death.

[Matt Clark]

The amount of redistribution required to make the 72 clubs of the Football League secure enough to regain control of their own future would have a minimal impact on the average Premiership club's ability to pay top whack for world class stars. It might, however, restrict the average Premiership club's ability to pay the likes of Seth Johnson nearly forty grand a week.

Which, in the grand scheme of things, can only be a good thing.

Compared to the truly swingeing effects a unilateral salary cap would have on the entire league, this is nothing.

An FA with the balls to take some of the largely unwarranted riches of the Premier League and send it down the ladder a bit is the most sensible way forward.

[denver_mugwamp]

There's been some misconceptions here about a salary cap. Let me compare with what happened in the US:
#1 Having a salary cap means that players salaries will go down immediately. When the salary caps were negotiated, the percentage of money going to the players was kept the same. So if 65% of revenue goes to salaries, that might not change. (I dunno how to figure it for EPL clubs where 120% of revenues goes to salaries. This might have to be adjusted.) There might not necessarily be a sudden outflux of talent.
#2 Over time, salaries go down under a salary cap system. Wrongo again. As more money came into the leagues, mostly from TV, the average salaries have continued to go up.
#3 There will be no stars paid huge salaries under a salary cap. Nope. Players like Peyton Manning and Shaquille O'Neil are still getting top dollar. A club has to decide how to divide up the money, and if they choose to hire a few big stars, then they still can. Of course they have to scrimp a bit on the supporting cast.
#4 There will be no "big clubs" with a salary cap. All clubs will be about equal. Didn't work out that way. It turns out that players, especially those towards the end of the careers, are often willing to earn less money in order to have a chance at a championship. So the aging superstars tend to clump together at certain clubs.

Of course, nothing above means that there will ever be anything closely resembling a salary cap in the EPL. But I thought I'd set some things straight.

[RichardL]

Originally posted by denver_mugwamp
There's been some misconceptions here about a salary cap. Let me compare with what happened in the US:
#1 Having a salary cap means that players salaries will go down immediately. When the salary caps were negotiated, the percentage of money going to the players was kept the same. So if 65% of revenue goes to salaries, that might not change. (I dunno how to figure it for EPL clubs where 120% of revenues goes to salaries. This might have to be adjusted.) There might not necessarily be a sudden outflux of talent.
#2 Over time, salaries go down under a salary cap system. Wrongo again. As more money came into the leagues, mostly from TV, the average salaries have continued to go up.
#3 There will be no stars paid huge salaries under a salary cap. Nope. Players like Peyton Manning and Shaquille O'Neil are still getting top dollar. A club has to decide how to divide up the money, and if they choose to hire a few big stars, then they still can. Of course they have to scrimp a bit on the supporting cast.
#4 There will be no "big clubs" with a salary cap. All clubs will be about equal. Didn't work out that way. It turns out that players, especially those towards the end of the careers, are often willing to earn less money in order to have a chance at a championship. So the aging superstars tend to clump together at certain clubs.

Of course, nothing above means that there will ever be anything closely resembling a salary cap in the EPL. But I thought I'd set some things straight.
The thing you haven't factored in is that in the NBA the top starts are limited to playing in the NBA. There's no rival league offering more money to lure players away. Also, as all of the clubs are competing under the same restrictions, the impact of those restrictions isn't going to be as keenly felt as it would if Man Utd suddenly had to budget as if they were Tottenham, and were consequently only able to field a team as good as Tottenham's. Yes, nationally the league would be more competitive, but internationally the premiership's best would, within a few years, be on a par with Belgium.

I put it to you, if the NFL was split into two, with one half having salary caps etc, and the other being a free market, and the superbowl each year was between the best of those two leagues, how many years would you give it before the superbowl completely ceased to be a meaningful contest? That is the situation the premiership would face if a salary cap was brought in.


A reduction in TV revenue for premiership teams wouldn't have that much of an impact (if phased in) as even a TV deal reduced by 20% would still compare favourably to those offered overseas. That cash dished out to the football league would make Div 1 (+Divs 2 & 3) a lot more competitive.

[United20]

Originally posted by RichardL
Yes, nationally the league would be more competitive, but internationally the premiership's best would, within a few years, be on a par with Belgium.

Some fine points made RichardL. But, another factor is that Belgium does not have TV or endorsement revenues like the EPL which would still put the their at a higher level to acquire top-flight players. The pounds coming in will ultimately determine how much the league can afford which does not seem to be declining anytime soon.