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Why UEFA leagues should steer clear of wage caps

Saturday 2nd June 2018

If sport is a microcosm of life why do American competitions embrace socialism while football in Europe is ruthlessly capitalist? There’s no promotion or relegation in the NBA, NFL, NHL, and MLB. On the business side, owners act in concert for the good of all. Players have the few remaining labour unions with any power in the United States.

By comparison, there are no footballers’ associations in the UEFA landscape that can exert influence on their leagues. European clubs regularly feud. Look at Real Madrid and Barcelona. Or Bayern Munich and every other Bundesliga club. As well, there is promotion and relegation. European football is ruthlessly Darwinian.

The trick is that US sport is not socialist; it’s corporatist.

The big fish in Europe will feed on the minnows, feasting on their most promising players and coaches. The EU is a free market economy even if there is a tangled jungle of rules. Clubs go up and down. Players move with remarkable freedom.

In the US, the top teams in every league except the NFL have annexed or established smaller clubs, turning them into minor-league affiliates where they can develop their talent in the same manner an automobile maker will buy up parts manufacturers and other subsidiaries to control its overhead. Players? Teams are constantly looking to "lock" players into a contract [until they no longer want him].

The NFL uses college teams as its talent pool. The NCAA’s fiercely protected amateur status and four-year eligibility limits provide the NFL with a perpetual stream of trained, experienced workers at virtually no cost. European clubs invest millions in developing players from a young age in academies, or purchase them from other clubs who have.

When young players join professional teams in the United States, there is one final obstacle that keeps most at the franchise’s mercy for the formative years of their career, if not longer: proscribed wage limits. Every league in the United States has some protocol to control labour costs, including Major League Soccer. They take on two basic forms.

Salary cap

  • Wage ceilings and, in some cases, floors on a team’s annual player wage budget [NFL, NBA, NHL, MLS]
  • Minimum annual wages for players [NFL, NBA, NHL, MLS]
  • Maximum annual wages for players [NBA, NHL, and in all cases save three exceptions per team in MLS]
  • Contract limits [NBA 4/5 years, NHL 7/8 years; the NFL almost never guarantees contracts]
  • Relief from bad guaranteed contracts for franchises [varies from league to league]

Luxury Tax

  • Major League Baseball
  • Wage floors for teams
  • No upper limits on individual or team salaries
  • When the collectively bargained threshold is exceeded, teams pay a tax on overage
  • When teams repeatedly exceed the threshold, tax rate rises incrementally
  • Teams can reset tax rate by staying under the threshold for one season
  • NBA assesses a tax as part of the penalty for exceeding cap during the season.

European leagues have begun mooting the possibility of instituting salary caps, too. For the owners, who pay out exorbitant fees and wages for players, it makes sense. For fans, it absolutely does not.

The reason is simple. When spending is limited, so is the talent. American sports leagues advertise parity as a level playing field for every team. Fans in every market big or small, have a chance to celebrate a title. It’s false advertising.

If parity meant teams rotated their league’s championship evenly, fans would have ‘a chance’ to celebrate once every three decades or so. And what would the celebration be? “Huzzah, it’s our turn?” Might as well pass out participation ribbons every year and be done with it.

Happily, parity doesn’t mean that. The NHL was the last league to install a salary cap/luxury tax in the United States, beginning with the 2005/06 season. If we count the ongoing Stanley Cup Finals, which guarantee a new champion, whether it’s the Washington Capitals or brand, spanking new Vegas Golden Knights, there will be eight different winners over the 13-year span.

Meanwhile, the NBA is about to begin year four of Golden State v Cleveland, Steph v LeBron. The league has had seven champions since 2006, but if there is parity, how can the same two teams battle for the NBA title four times in succession?  

The NFL is a little more diverse, with nine Super Bowl winners, in part because New England keeps losing to different teams.

Baseball has put forth eight World Series winners in the 12 seasons they’ve completed. The St Louis Cardinals and Boston Red Sox have each won it twice. The San Francisco had an odd dynasty from 2010-14, winning in the even years. Additionally, the Detroit Tigers and Texas Rangers each lost two; the Philadelphia Phillies and Kansas City Royals won and lost one apiece; the Cardinals lost in a third trip. If you go back to 2005, the defending champion Houston Astros also have two appearances.

Admittedly, salary caps seem to spread the glory more than UEFA competitions. Nevertheless, there is a serious problem with the system. It functions through roster turnover. When a team wins a title, the players who did well want a raise. The salary cap forbids the team from paying them all. Rivals seeking players who know how to win will. Teams don’t get rid of the Marouane Fellainis and Dejan Lovrens whose arses fans would love to see hit by the door on the way out. Instead, they lose the Mo Salahs and Romelu Lukakus that everyone wishes would stay.

Beyond that, when talent is artificially regulated, giving no team a sizeable advantage, championships are won by management, not the athletes. The players must play the games, but the real moves already took place in the boardroom. Whether consciously or not, we all understand this. It's why fantasy leagues and Football Manager are so popular.

The NBA has been very smart with its salary cap, allowing several exceptions to the rules. Smaller rosters also mean less moving parts and more impact from elite players. With fewer salaries to pay and comparable revenues to other sports, teams have greater choice. Super-teams like the Warriors, with Steph Curry, Klay Thompson, Kevin Durant, and Draymond Green, can be assembled or an owner can pay a max salary to one player, like LeBron James, and let him carry an otherwise mediocre roster like Thanos waging an Infinity War against the West Coast Avengers.

Of course, the NBA’s Thanos has lost two of three series, unlike the Marvel Universe version who rolled over Earth’s Mightiest Heroes at the first asking. Wait, you have seen the movie by now, haven’t you? Oops, sorry. To be fair, the one time King James did run riot over the Warriors, he ruined their 73-9 best-season-ever, which was like snuffing out half the souls in the Bay Area. Oh, yeah. Sorry again.

The point is that European football clubs must keep as many as 40 players on the books. With a salary cap, none could ever afford to build teams like Real Madrid, Barcelona, Bayern, Manchester City and Paris Saint-Germain all do. There would be no more BBC, no MSN, no Rob-bery. Competitions would be more level. Except level is a synonym for flat. Wouldn’t you rather climb a mountain than walk across a flat plain? Wouldn’t you relish the chance to topple a big club? We all want a thrill, and killing giants is never boring until you've killed them all.

Martin Palazzotto

The former editor of World Football Columns, Martin authored the short story collection strange bOUnce. He appeared in several other blogs which no longer exist. Old, he likes to bring out defunct. If outdated sport and pop-cultural references intrude on his meanderings for It's Round and It's White, don't be alarmed. He's harmless.

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