European clubs move towards the salary cap – and clear the legalities en route

by Christophe Jost

For years, each and every time the discussion has addressed the subject of a salary cap, that such system would be totally illegal under EU law and thus the discussions were pretty much dead on arrival or rather dead before the discussions have even arrived..

Indeed now that League One and League Two have each agreed to proceed with a salary cap the PFA have come out against it saying ‘it could be unlawful and unenforceable’.

This unlawfulness has been accepted as fact – a restriction of the right to self-determination, free choice of job and antitrust regulations, much like some of the reasons why the  Bosman ruling decided that players were free to move as they wanted once their contract had run out.

And I must admit, I have been of the same opinion, yet I always wondered how in the US, the NFL, NHL and the NBA were able to enact a salary cap considering that the US is, theoretically, the example in terms of liberalisation and free markets. Which, by the way, is far from the truth, but this is another subject.

Anyway, as said, no discussion could be had as it was quashed from the beginning.

However during the pandemic lockdown in Germany, two studies were mandated to once and for all get a serious opinion as to the legality of a salary cap in football.

This was part of a set of “reflections” held at the highest level of football in Germany. By highest, I mean stratospheric compared to the at best mole-hill levels that we see in terms of reflections and strategy at the FA.

The studies were mandated by the president of the DFB (the German equivalent of FA) Ethics Committee Mr Opperman. It must be said that he has been a member of the German Parliament since 2005 and is now its vice-president.

Seeing that German football was in dire straits with tens of clubs nearing bankruptcy, he decided to ask for help from the minister in the German parliament in charge of the economy and the minister in charge of European affairs to study the problem and deliver their conclusions.

So we are not talking of some legal outfit wanting to get some kind of publicity or trying a stunt. This is a serious initiative resulting in two independent assessments about the legality of a salary cap in football.

And you may be interested in knowing that the studies came out recently and all VALIDATED the legality of a salary cap.

Yep. They truly did. Under EU law. In no uncertain terms.

As was pointed out, some professions do already have to live with salary caps in some countries, like doctors, lawyers, etc. So this is not something outlandish and impossible.  Besides other leagues have already enforced salary caps as we have noted: the NFF, NBA, and NHL in the US for example.

The rationale behind the salary cap being introduced is

• It compensates for the loss of equal opportunity in European football,
• It accentuates the competition,
• It would stop the massive growth of debt seen at club level by cancelling the inflation war we are witnessing on a European level,
• And, last but not least, it would be of a very important interest to the national association and to the general public

So here you have it, delivered in no uncertain terms : a salary cap is legal, and would be of general interest.

Now in terms of how to do it, the recommended way is that of going through the umbrella organisation, in this case UEFA, and not through passing a law – which is how England, and other non-EU nations would be brought into the regulations.

Indeed working via a law at national level when addressing a European issue is generally not a solution. It would create a problem for the country enacting such law, if vested interests worked to block it. So a global solution has to be found at the UEFA level.

One solution, which has been proposed by Mr Ceferin, the UEFA president, would be a ‘luxury tax.’  In this any club spending more the the cap would have to pay a tax equivalent to the amount above the salary cap.  This amount would go in a solidarity fund to be shared among the clubs not spending all the salary cap.

Both reports agree in no uncertain terms on the fact that a salary cap would augment the uncertainty of games, thus be a plus for the paying customer.  And I guess we cannot fault them on that.

Come to think of it, maybe UEFA ought to add a games cap for referees….no more then twice the same team in the course of a season…..this would make it harder for some English teams to win the league or qualify for European football, which in turn means they’d be less fit when playing in Europe, thus levelling the playing field as well…

Hmmm maybe it would be better if you just disregarded this last paragraph, this is total science fiction!

The very interesting thing about what is happening now, is that Mr Oppermann, now in possession of these studies, will present them in Brussels this autumn. If Ms Verstagen, in charge of competition at the EU Commission level, were to get behind it, the traction would have a chance to get things moving. In which case the PL may have no other solution but abide by the new rules.

I can understand individual players not being happy with seeing their potential earnings possibly curtailed. Then again, what good is a big salary if the league sees clubs go bust and end up unable to sustain its business model economically?

So in England, it sure looks like football’s business model is being assailed from external forces and internal forces. This is going to be very interesting to watch develop.

One thing is sure: Untold Arsenal will keep you posted about what the UK press at large does not tell you!

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