Friday, March 06, 2009

Salary and player restrictions: new balls please

 Salary caps and restrictions on player transfers have been in the news a lot recently. Michel Platini has said he is keen to limit the amount that clubs can spend on player transfers and wages, and FIFA has sent a report stating that its ‘6+5’ proposal is compliant with European law to the European Commission for analysis – the report will be one of the main topics of discussion at a 17 March meeting between the Commission and European Sports Ministers, as World Sports Law Report unveiled earlier this month.

The underlying principle behind these moves concerns protecting the integrity of sport. In any other business, you work towards the goal of eliminating competitors, however sport doesn’t work like that. Despite what Arsenal fans might tell you, a football fan doesn’t want to watch his team win every game in every season for evermore. Competitors must put up some sort of a fight for sport to remain interesting, or for fans to keep paying to watch it. Sport rightly argues that its circumstances are unique, which forms the basis of its argument that it should be afforded certain exemptions from European law to allow it to preserve that competitive element.

However, football is also unique from other sports. A salary cap is able to operate in US sports effectively because it is a closed market – other countries do not (yet) offer any meaningful competition in American football, basketball and baseball. A salary cap is also able to operate in both rugby codes because countries that play both codes have similar economic status (this is a simplistic analysis – there is an argument that south sea island nations have suffered poaching of players for many years and the salary cap does not prevent this).

As football operates in a variety of economic markets and the wealth of clubs varies dramatically, a salary cap would need to be global and would be difficult to enforce. Likewise, it is unproven as to whether the ‘6+5’ proposal will effectively encourage players to develop their own talent, as the ‘6’ refers to players qualified to play for the national team in the country in which the club is based (if you are over 18 and have been living in the UK for the last five years – or three years if you are married to a Brit – you qualify as a ‘British Citizen’. This principle allowed Lesley Vainikolo to play for England at rugby union, even though he was born in Tonga). The ‘6+5’ proposal also does not include substitutes, which would allow clubs to replace three of the six ‘qualified’ players shortly after the final whistle anyway.

As football is unique, it needs unique methods to reinforce the integrity of the game. As both the ‘6+5’ proposal and the salary cap are based around the same principle – that something must be done to encourage clubs to invest in youth and to limit club spending on wages in order to reinforce the competitive balance in football – then why not tackle both at once?

If sport does have the autonomy to make its own rules, as FIFA claims, then FIFA should grasp the nettle and come up with a bold rule. Why not limit player wages during the first two years of a professional contract (for example, to €400,000 per year) when playing for the starting 11 of a club? That would encourage clubs to develop their own players at a younger age and bring them through the system, rather than sign new players on extortionate wages. Player transfers could still operate, as long as players were prepared to accept a pay cut in order to move clubs. It would also encourage player loyalty in the eyes of the fan, as players would not be able to chase ever-higher wages and would be rewarded for loyalty, as they could be paid whatever amount their club deems fit following two years of service. It would also have less of an effect on smaller clubs than any salary cap based on a percentage of revenue.

While there are no doubt faults with this system, I think it has as much - if not more - merit than any of the proposals designed to protect the integrity of football put forward so far.

Andy Brown


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