American Sports like the NBA have led the way in levelling the playing field for their teams. Sean Curtin investigates if such a system could ever work in the Premier League.
The average Premier League weekly wage now stands somewhere around the £31,000-a-week mark. That means that in the last number of years, wages have exceeded 70% of revenue.
If that figure doesn’t worry you, it should. Most analysts would agree any figure above 70% is alarming. It’s at this point professional sports teams generally require some external funding. This funding typically comes from the owners or via loans but there’s a couple of problems with that, the chief of which being football club owners have a terrible habit of acting irresponsibly.
To expect all owners to manage the financial well-being of the club and intervene when necessary is a pipe dream.
Another problem with this is UEFA’s Financial Fair Play (FFP). Thanks to FFP, it is harder, though not impossible for owners to pump cash into their clubs through back channels. An example of how a club might do this is Manchester City.
Their stadium naming rights deal with Etihad Airways caused a UEFA investigation. The deal was huge, around £35-40 million a year for ten years. Yet the airline is only a third of the size of British Airways and has never made a profit since its launch in 2010. Oh and did we mention the Airline’s Chairman is the half-brother of Manchester City’s owner Sheik Mansour.
Deals like this are unfair, unsustainable and harder than ever to get away with thanks to FFP. We know a wages-to-revenue ratio of above 70% is unsustainable. Could a salary cap be the answer?
Salary caps have been in effect in the NBA since 1984. The NBA employs what is known as a ‘soft cap’ whereas the NFL uses a ‘hard cap’. The difference between the two being that a soft cap allows for some wiggle room to pay extra to certain players, the hard cap does not allow for this.
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