Football seeks a cure for record spending

Summer spending by Paris St. Germain has reignited the debate on introducing a salary cap for major clubs.

It was meant to be one of the tools to force Europe’s football giants into economic responsibility. But the Financial Fair Play rules, introduced by UEFA in 2011, are now under fire from experts and managers. The reason is the summer transfer window and, in particular, Paris St. Germain’s enormous purchases. They signed Neymar from Barcelona for 222 million euros and will pay another 180 million next year for Kylian Mbappé. Another tool that could help curb million-euro spending is the introduction of a salary cap. For context, there are currently 20 “elite” clubs in Europe that can afford to spend more than 100 million euros per year on player wages. “A salary cap is part of a broader discussion on how the authorities can respond to the current transfer system,” sports analyst and football agent Jozef Tokos told the Economic Daily.

Activity of the new UEFA chief
The idea has also been considered this summer by UEFA’s new president, Slovenian Aleksander Čeferin, and has been pursued for several years by the European Club Association. Its director, former German international Karl-Heinz Rummenigge, confirmed this to Kicker magazine. “We held several meetings in Brussels with the previous UEFA president about this option. Michel Platini wanted a salary cap similar to the one in North American sports. But it was always rejected by the European Union,” Rummenigge said.

According to him, the Neymar and Mbappé transfers – along with other costly deals – could sway European politicians to change their minds. It is worth remembering that Financial Fair Play was introduced because petrodollars from Arab (Manchester City) and Qatari (Paris St. Germain) sheikhs had begun flowing into football. From the moment they arrived, the clubs did not hesitate to go into debt and regularly ended the year with losses exceeding 100 million euros. Today they must break even, but they have found ways to quickly boost their revenues. “UEFA now has to identify the loopholes that allow clubs to bypass Financial Fair Play and set the rules so that fair competition is not threatened,” Tokos said.

NHL unlikely to be the model
The main motivation for changes in transfer policy is the rapidly growing gap between the richest clubs and the rest of the teams in Europe’s leagues. “In the future, we must seriously consider limiting clubs’ wage spending. If we succeed, it will be a historic change,” UEFA president Aleksander Čeferin said.

For comparison, the NHL’s salary cap for the new season is set at 75 million dollars. If such a cap applied to every football club in Europe, teams like Barcelona or Manchester United would have to part with their biggest stars – or Messi and Pogba would have to agree to massive pay cuts. “I would not compare this cap to the NHL. You can’t limit an individual player’s salary, as it clashes with competition law and would be a legal problem,” Tokos said. According to him, a more realistic approach would be to allow clubs to spend only a certain percentage of their annual turnover on player wages. “Something similar exists in England’s third and fourth tiers, where the limit is 55 and 60 percent of income,” Tokos explained. Besides a salary cap, there are other ways to curb big clubs’ spending – for example, limiting the number of transfers or reducing squad sizes.