WSC 191 Jan 03

One of the biggest clubs in the country is in dire trouble; another high-flyer has slumped from the top of the league to the bottom, both as a result of spending too much on players’ wages. That may sound familiar, but in fact these two examples from Australian sport could hardly be more different from the nightmare scenarios painted for the future of football clubs in Britain and the rest of Europe.

Both the Canterbury Bulldogs (one of the top rugby league clubs in Sydney) and the Australian Rules club Carlton (something like the equivalent of Arsenal in Melbourne) were plunged into crisis by the application of the salary cap, the very mechanism proposed as a solution to the problems of European football both by the ever-active imaginations of the G14 group and some Nationwide League chairmen.

Carlton were fined £330,000 and subjected to heavy penalties in the AFL’s draft system, for making under-the-counter payments to several players in order to evade the salary cap rules. The club president admitted Carlton could theoretically go out of business, although such a fate is all but impossible due to their standing in the game. The Bulldogs were docked 38 points near the end of this season for similar breaches of the league cap, dumping them firmly at the bottom of the table and making a farce of the whole campaign.

Such retrospective tinkering with leagues or draconian punishments for transgressors are among the main objections to any salary cap system, or indeed any serious attempts to regulate the finances of sports clubs. The same problems bedevil German football, where clubs have regularly been relegated or denied promotion (subject to endless appeals and counter-appeals of course) for reasons unconnected with the number of points they have gained.

The arguments over salary caps (and the draft systems that go with them in many American and Australian sports) tend to divide people along unusual ideological lines. On the one hand, the stated aim is to keep competitions balanced and not allow a few clubs to become far richer than the others for an indefinite length of time. It is this aspect that led one commentator for BBC online to describe the proposals of the G14 as “some kind of socialist football utopia”. Nevertheless, their current advocates are the proprietors of the very biggest clubs in Europe and, in an English context, the allegedly hard-nosed businessmen who have spent their clubs into crisis but who would generally oppose regulation of their financial activities.

On the other hand, salary caps are generally resisted by players’ unions, for obvious reasons, and by the restrictive practices zealots of European Union, who see them as a blatant restraint of trade. While a more equal league and a reduction in the percentage of turnover spent by clubs on wages are both desirable goals, the current proposals for salary caps are likely to prove not only ineffective in achieving them, but also disingenuous in their motivation.

The first objection is that salary caps simply do not work. While it is true that the American sports that use them share the honours around much more evenly than in Europe’s leagues, examples from other countries and the experience of our maximum wage until its abolition suggest that clubs will always try to find a way around the caps. What’s more, if they are caught, the consequences make a joke of the competition and are deeply unfair to fans who have invested time and money in following the league in good faith.

Both in America and Australia the leagues are closed – there is no promotion and relegation. In a much more complicated situation involving potentially hundreds of clubs operating multinational squads and competing both domestically and in continental competition, the potential for ambiguity and downright cheating hardly bears thinking about. And, as Gordon Taylor has pointed out: “The very clubs that put forward this sort of agreement are usually the first ones to break it.”

The second objection is that neither the G14 nor the Nationwide League chair­men (led by the most profligate of the First Division spenders) are in any position to demand a salary cap. On the most basic level, the idea that any cap should be based on a percentage of turnover (rather than an absolute sum) would serve not so much to iron out inequalities as to institutionalise them.

More iniquitious still is the idea that the G14 (now comprising 18 clubs) is entitled to dictate how other clubs should organise their finances. Their proposals on the salary cap, greeted with far too little scepticism in the press as an altruistic attempt by the big clubs to control rising wages, are in fact simply their latest ploy to gain legitimacy at the expense of the game’s governing bodies.

As in many other areas of industry, this plea for a certain kind of regulation is essentially a smokescreen designed to cover up gross mismanagement. The proposals are likely to prove unworkable, unfair and illegal. But history suggests that is not likely to stop football charging enthusiastically towards an apparently neat solution to its problems.

From WSC 191 January 2003. What was happening this month

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