WSC 233 Jul 06

Chelsea at the bottom of the Premiership is an unlikely scenario that would surely only ever happen if Roman Abramovich quit west London, but could a salary cap reduce the champions to also-rans? Wigan, for example, were rugby league’s dominant club until a few years ago but this season face relegation from Super League and a salary cap has contributed to their demise.

A salary cap is the main recommendation in a review of European football completed last month by a former Portuguese sports minister, José Arnaut. In the Observer, UEFA chief executive Lars-Christer Olsson said: “You have clubs now where the turnover is €200 million to €300 million (£140m-£205m) and they still make a loss. This is very unhealthy and stupid. You would never run any other business like that. The clubs seem to have a planning horizon of minus ten days; we at UEFA prefer a financial plan for ten years.”

Olsson specifically used Michael Ballack’s new weekly wages at Chelsea of £130,000 and the club’s latest annual losses of £140m as compelling reasons for introducing a salary cap. The Premier League insist that a salary cap is not necessary and point out that on average only 60 per cent of member clubs’ turnover goes on players’ wages. Spokesman Dan Johnson said: “Stories like Wigan or Middlesbrough would not have been able to happen if there was a salary cap, which would just lock the money in.”

A cap could also be open to abuse. If a club wanted to sign a player that bust the wage cap, what is to stop them asking a sponsor to simply pay a player’s wages instead of paying the club directly? “A salary cap could also force things under the table and runs against some of the other issues in the report like greater financial accountability,” says Johnson.

The Premier League, who were given an hour with Arnaut to air their thoughts, are one of the few interested parties willing to speak about the report, publication of which is supposed to be followed by a six-month period of reflection. During that period, key review contributors such as the sports unit at accountants Deloitte & Touche and the Football Governance Research Centre at the University of London are bound by confidentiality agreements.

The Football League, which capped playing salaries at 60 per cent of a club’s income in Leagues One and Two two years ago, are due to discuss Arnaut’s review on June 6. Proposing a similar 60 per cent arrangement in the Championship will probably be aired, but the League declined to respond to Arnaut’s report, as did the FA and Scottish Premier League.

The G-14, the lobby group for 18 of Europe’s biggest clubs, are formulating a response to the 160-page tome, which was shown to Tony Blair on March 22, then UEFA leaders, and published the next day.

Reportedly, Arnaut’s recommendations caused a storm in Westminster. This was surprising as the review only came about through the government’s stint at the rotating head of the European Union last year with sports minister Richard Caborn setting up the review.

Football officials privately admit the idea of Brussels imposing Europe-wide rules is causing ructions and ministers probably have nightmares at the headlines in the Daily Mail that this scenario would generate.

Another key recommendation is setting up a Europe-wide version of Supporters Direct, the quango championed by Caborn that has helped set up trusts at nearly 140 UK clubs. SD welcomed the review but admits it does not know where to start in taking up Arnaut’s proposal. At least SD was consulted. In his report, Arnaut points to problems engaging with fans, yet the German-based Alliance of Active Football Fans did not realise a review was being carried out let alone get a chance to contribute.

The fans were not the only ones ignored. The Premier League might have only got an hour of Arnaut’s precious time – he ignored many attempts by WSC to contact him for comment – but some associations such as the Icelandic FA had no input, making you wonder what the purpose of the review really is. Perhaps in six months, everyone else in football will find out.

From WSC 233 July 2006. What was happening this month

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