UEFA to Propose Soft Salary Caps with Luxury Tax for Clubs Breaching the Cap

[mazhar13]

Tweet

— Twitter API (@user) date

This is going to get very interesting. The NBA already has something like this where contract renewals/extensions can allow teams to go past the salary cap with a luxury tax enforced after passing a certain limit above the cap. The cap, however, does prevent teams from signing new players into their team if their salaries would make them breach the cap. I doubt that UEFA will necessarily go that far; I think they'll use the cap to get a luxury tax out of teams that breach it but still allow them to breach it with no issues.

What do you all think? If this is formalised and passed afterwards, this will be a huge, huge change in football.

 

[Dr. Dwayne]

UEFAs executive have approached the state sponsored trough.

 

[TrustInOle]

So break your salary cap and Uefa are okay with it as long as they are paid to it seems? Class.

 

[adexkola]

I will still seize power and have the heads of Agnelli and co placed on a pike

 

[RedDevil@84]

So. You can do whatever you want, as long as we get paid.

 

[Random Task]

Tweet

— Twitter API (@user) date

This is going to get very interesting. The NBA already has something like this where contract renewals/extensions can allow teams to go past the salary cap with a luxury tax enforced after passing a certain limit above the cap. The cap, however, does prevent teams from signing new players into their team if their salaries would make them breach the cap. I doubt that UEFA will necessarily go that far; I think they'll use the cap to get a luxury tax out of teams that breach it but still allow them to breach it with no issues.

What do you all think? If this is formalised and passed afterwards, this will be a huge, huge change in football.

Rendering the soft cap completely useless. Either go with a hard cap that limits salaries to be within reach of all clubs, not just the rich ones, or don't bother changing anything.

The current proposal for the soft cap is laughable. It's a shame as I've always liked the idea of a salary cap in football. It's only way to level the playing field.

 

[Powderfinger]

Total joke of a proposal.

As long as City and PSG can generate more "revenue" from dodgy deals with state-owned enterprises, this does nothing.

The only way to truly reign in spending at the top and create a more level playing field is by having a hard salary/player expenditures limit that applies to all clubs in European competition regardless of revenue. Set it very high so it doesn't change that much in terms of total money being spent on wages and fees across the game, but just low enough that you get about 6-7 clubs around the same level (PSG, City, United, Madrid, Barca, Bayern, Chelsea probably) and then another group of clubs (Liverpool, Juventus, Arsenal, Spurs, Atletico etc) that can't stretch to that level financially but aren't miles and miles off. That's a formula for really good competition.

 

[Skills]

Salary caps are a fantastic way of moving more money into the pockets of owners and ownership groups.

Glazers/FSG and co, are all laughing to the bank

 

[Skills]

Total joke of a proposal.

As long as City and PSG can generate more "revenue" from dodgy deals with state-owned enterprises, this does nothing.

The only way to truly reign in spending at the top and create a more level playing field is by having a hard salary/player expenditures limit that applies to all clubs in European competition regardless of revenue. Set it very high so it doesn't change that much in terms of total money being spent on wages and fees across the game, but just low enough that you get about 6-7 clubs around the same level (PSG, City, United, Madrid, Barca, Bayern, Chelsea probably) and then another group of clubs (Liverpool, Juventus, Arsenal, Spurs, Atletico etc) that can't stretch to that level financially but aren't miles and miles off. That's a formula for really good competition.

If we accept that PSG and City already do some heavy creative accounting to meet the rules. What will stop them just paying players, and even owners of other clubs under the table to do deals?

 

[mazhar13]

So. You can do whatever you want, as long as we get paid.

The first bit of the article did state that the money will be put into a pool and be redistributed. Let's see how much of the luxury tax actually gets distributed.

Rendering the soft cap completely useless. Either go with a hard cap that limits salaries to be within reach of all clubs, not just the rich ones, or don't bother changing anything.

The current proposal for the soft cap is laughable. It's a shame as I've always liked the idea of a salary cap in football. It's only way to level the playing field.

They'd have to ensure that the members would be willing to accept the proposal. If they would go with a harder cap, then a good number of clubs would likely reject it, especially those that aren't massive but still have large wage bills (e.g. Shakhtar Donetsk, Besiktas, etc.).

 

[BeforeKeanetherewasRobson]

A luxury tax is irrelevant for clubs like PSG or City.

 

[Kentonio]

Salary caps are a fantastic way of moving more money into the pockets of owners and ownership groups.

Glazers/FSG and co, are all laughing to the bank

That might be true if lots of clubs were making huge revenues to start with, but in most cases the owners are the ones paying substantial amounts in the first place.

 

[adexkola]

So break your salary cap and Uefa are okay with it as long as they are paid to it seems? Class.

Depends on what the money is used for.

But also, if the tax is punitive enough, it can discourage excessive spending.

You can also allow for youth player compensation to not count against the cap. So many things you can do.

 

[Drainy]

I'd rather money went to the people doing the work

 

[Kazi]

Should have stayed in the Super League

 

[mazhar13]

Depends on what the money is used for.

But also, if the tax is punitive enough, it can discourage excessive spending.

You can also allow for youth player compensation to not count against the cap. So many things you can do.

Imagine the exceptions and allocated budgets that they can come up with to allow teams to remain below the cap. If UEFA aren't careful, they might go down the MLS route.

 

[MrMarcello]

Could see them proposing something along the lines of the MLB luxury tax system.

https://en.wikipedia.org/wiki/Major_League_Baseball_luxury_tax

 

[adexkola]

A luxury tax is irrelevant for clubs like PSG or City.

Maybe.

However, you could do a lot with the revenue from the tax. Whether it's distributed to other clubs, or used to improve grassroots infrastructure...

What you do next is limit squad sizes. Make it very difficult for top clubs to stockpile talent.

 

[The holy trinity 68]

This will be the end of football. Everyone will obey the caps except the likes of City and PSG who will never be impacted by the luxury tax and spend even more than they do now and sweep up all the best players because no one can compete with their wages.

 

[adexkola]

Imagine the exceptions and allocated budgets that they can come up with to allow teams to remain below the cap. If UEFA aren't careful, they might go down the MLS route.

It can be abused, just like any system. Doesn't mean that we should give up.

Also, the MLS system does introduce some level of parity. When was the last time the Yankees won a pennant?

 

[adexkola]

This will be the end of football. Everyone will obey the caps except the likes of City and PSG who will never be impacted by the luxury tax and spend even more than they do now and sweep up all the best players because no one can compete with their wages.

Make participation in domestic and European competitions contingent on strict adherence to financial regulations, and certify players as well. Zero tolerance policy.

 

[Random Task]

They'd have to ensure that the members would be willing to accept the proposal. If they would go with a harder cap, then a good number of clubs would likely reject it, especially those that aren't massive but still have large wage bills (e.g. Shakhtar Donetsk, Besiktas, etc.).

It's probably too late to introduce a hard salary cap, to be fair, as the higher-valued players on a massive salary won't be pleased if suddenly forced to take a wage drop to be in line with the cap. Not to mention having to share a similar wage to a "lesser player".

The pampered shits are too used to the good life to be changing anything.

 

[rcoobc]

A soft tax makes sense to me.

PSG sign Messi and are £100m over whatever threshold is set? Fine, but they have £100m of withheld monies from UEFA/the league which is then distributed the other teams in the league. Or across UEFA as a whole.

 

[JPRouve]

Leagues operate in different economies, a salary cap whether soft or hard is complete nonsense unless it's very low, in which case you are just shifting money toward owners pockets.

 

[roonster09]

Don't think salary cap works, especially when clubs can pay from second accounts.

Also salary cap means money to owners pocket, if the money is used to help match going fans, infrastructure then it's fine but it won't be the case.

 

[acnumber9]

What you do next is limit squad sizes. Make it very difficult for top clubs to stockpile talent.

This is something that is simple to do and would solve a lot of problems. Fix the ludicrous loan system that allows clubs like Chelsea to use players as assets to balance the books.

 

[adexkola]

A soft tax makes sense to me.

PSG sign Messi and are £100m over whatever threshold is set? Fine, but they have £100m of withheld monies from UEFA/the league which is then distributed the other teams in the league. Or across UEFA as a whole.

This. One of two things happen:

1. PSG balk at the amount. They are only able to offer less
2. They pay anyway. More money goes to Nice. They can prevent Everton from snapping up a young prospect.

And you can make the tax really punitive. Above a certain threshold, tax $2 for every extra $1 spent.

 

[KirkDuyt]

I'm all for a salary cap. Can we set it around the figure of Feyenoord's wage bill? I want to win a CL too

 

[Markus3]

In the NBA you have a soft cap and then a hard cap,
You cannot go over the hard cap to sign new players, you can only go over it to sign existing players
However with regards to the soft cap, in the first year every dollar that you go over you have to pay a dollar in luxury tax so go over 10 million, pay 10 million

if you do it again in the second year running then it is 1.5 dollars for every dollar you go over so 10 million over, pay 15 million in tax

Third year at 2 dollars for every dollar

so you get the gist, I know that city and PSG have a lot of money but I can’t see them wanting to be paying millions and millions ofeuros/ pounds in luxury tax

it could work

 

[JPRouve]

This. One of two things happen:

1. PSG balk at the amount. They are only able to offer less
2. They pay anyway. More money goes to Nice. They can prevent Everton from snapping up a young prospect.

And you can make the tax really punitive. Above a certain threshold, tax $2 for every extra $1 spent.

It will change nothing for Nice because you are spreading the money across too many clubs. It's a good idea in closed league with 30 teams not when you are talking about hundreds of clubs.

 

[mazhar13]

It can be abused, just like any system. Doesn't mean that we should give up.

Also, the MLS system does introduce some level of parity. When was the last time the Yankees won a pennant?

Definitely, we shouldn't give up on this. Even Inter Miami broke the rules last season.

I was just hinting at how complex and complicated MLS's player registration and salary rules have become despite them doing a decent job of maintaining some parity. I doubt that UEFA's would ever get that complex and complicated, and I do expect them to allow for some exceptions just like the NBA.

 

[arthurka]

When teams like City and PSG can just make up numbers for their sponsors luxury tax won't change a thing. 5/1 or 10/1 could matter if it was given to the other teams in the league but I still think cooking the system and the books will always win.

 

[Hulksmash]

So FFP is getting relaxed ? I am for it

 

[Random Task]

Leagues operate in different economies, a salary cap whether soft or hard is complete nonsense unless it's very low, in which case you are just shifting money toward owners pockets.

That's necessarily a bad thing, though.

More money for the owners means an increased transfer budget, funds to extend/rebuild the stadium, support for the surrounding communities or city, perhaps even funnelling some down to the smaller clubs or grassroots football itself. The options are endless.

 

[adexkola]

Leagues operate in different economies, a salary cap whether soft or hard is complete nonsense unless it's very low, in which case you are just shifting money toward owners pockets.

Each league can set their own luxury tax.

Also, player compensation shouldn't be the only factor that's important. Club sustainability, fans not being priced out of games... All of that matters. The line "shifting money towards owners pockets" is a fallacy, we should aim for a solution where all stakeholders benefit. Not just players.

 

[JPRouve]

That's necessarily a bad thing, though.

More money for the owners means an increased transfer budget, funds to extend/rebuild the stadium, support for the surrounding communities or city, perhaps even funnelling some down to the smaller clubs or grassroots football itself.

It's a terrible thing because you take money away from players and make sure that clubs with wealthy and silly owners have a competitve advantage while also making sure that many owners increase their revenues. Look someone mentioned the MLB ask them to tell you about the Dodgers, think about it this way the Dodgers currently have a 267m payroll, the lowest payroll is at 48 and the second highest at 204m.

It doesn't help football, it doesn't help mid table clubs, it doesn't clubs that are outside of European spots. It helps no one outside of some owners, the wealthy or greedy.

 

[Crustanoid]

Joke

May I present an alternative

Kick Chelsea, City and PSG out of European football indefinitely until the owners have fecked off and they’re back to where they were before they cheated their way to success and decimated the entire fabric of football. Strip them of any title bought in the interim.

National associations need to also do the same.

Place all their fans (or at least the apologist ones-give them individually one last chance to repent) on a LOST-style island that they can’t get off, with no food so they start going feral and eating each other, as penance for being accessories to the heinous financial doping crime.

That should do it. Not this namby pamby crap.

 

[JPRouve]

Each league can set their own luxury tax.

Also, player compensation shouldn't be the only factor that's important. Club sustainability, fans not being priced out of games... All of that matters. The line "shifting money towards owners pockets" is a fallacy, we should aim for a solution where all stakeholders benefit. Not just players.

We should defiintely aim for a good solution and my point is that this one is bad for very obvious reasons. In France we have the DNCG, all clubs are audited every year, their accounts are judged and deemed sustainable or not, when they are not they can be prevented from signing players. Being priced out of games is a PL issue, tickets are very affordable in most leagues.

What you are saying just strengthen my point, we are talking leagues and countries with different economies, different rules and administration and acting as if they were similar when they are not.

 

[Zen86]

So UEFA want to wet their beak as well then. Shocker.

 

[Oranges038]

60 years ago, the £20 salary cap was removed. At that time, the average wage for the UK was about £20 a week. Now, the average PL wage is £60k per week. The average for the UK is £31k per year.

Not that it's relevant, it just shows the disparity between PL footballers and the fans who fill the stadiums most weeks.

This salary cap, if it will be introduced will have loopholes everywhere. More posturing from UEFA executives trying to keep their nose in the trough.