Transfer fee and salary caps edge closer
Manchester City’s failed 100 million euros plus bid for AC Milan’s Kaka now begs the question: should there be a limit on the amount of money a club can pay for a player or should there be a salary cap?
Some of Europe’s top soccer clubs and the game’s European governing body UEFA seem to think so, with the news that they have started talks on curbing the amount of money that can be spent on player transfers or wages.
Sources familiar with the discussions have told Reuters that the European Club Association (ECA) — which represents the continent’s leading clubs such as Manchester United, Real Madrid and AC Milan — has proposed clubs should only be allowed to spend around 51 percent of their revenue on transfers or salaries.
Under the ECA proposal, revenue would be determined as money received only from ticket sales, sponsorship, merchandise and television income. It would not include any financial investment by owners or major shareholders.
Any money from shareholders, or billionaire owners, would be invested into the infrastructure of the club, such as building or renovating the stadium or investing in youth development such as an academy, the sources said.
But, there are concerns that smaller clubs who cannot accumulate large revenues from ticket and television sales may suffer from the ECA proposal.
The English Premier League, bankrolled by these wealthy businessmen, is likely to oppose such a move which would in effect take away a lot of the incentive for these rich owners to invest in a club.
On the plus side, those in favour of the ECA plan say it would also prevent disputes over who owns a player, such as the so-called “Tevez affair”, from happening again.
In November, EU sports ministers mulled the possibility of a pan-European financial regulator for sport, much to the anger of FIFA, UEFA and the Premier League.
Is this latest proposal a step in that direction? More importantly is it a step in the right direction?
PHOTO: AC Milan’s Kaka salutes supporters at the end of their Serie A match at home to Fiorentina, Jan. 17, 2009. REUTERS/Alessandro Garofalo