Does football need a salary cap?

The 2021/22 Bundesliga season is over. Bavarian powerhouse Bayern Munich were crowned champions. They did this by earning 8 points more than runners-up Borussia Dortmund.

There was only one slight problem (assuming you aren't a Bayern fan) - this was their 10th consecutive league title.

This seems to be a problem occurring in many leagues across the world. Of Europe's top 5 leagues, except Serie A, teams with the highest wage bills came out as eventual champions of their respective leagues.

Football leagues are now becoming increasingly predictable. But how can we solve this glaring issue?

Enter the salary cap. The salary cap can be seen in the NBA, NFL and NHL. The results are visible as well, with teams having to be smart in building their squads, rather than simply throwing a load of cash to build a dream team.

What is a salary cap?

A salary cap limits the spending on players' salaries for a team. As mentioned earlier, the cap has been successfully instituted in the NBA, NFL and NHL.

For example, the NFL has a salary cap of $208.2 million in 2022. This means that teams cannot have a higher wage than the $208.2 million for the 2022 season, else they will face consequences, such as hefty fines or losing draft picks.

Currently, La Liga, the MLS, the A-League and the CSL are leagues which have instituted forms of the salary cap.

Why do we need a salary cap?

Let’s look at the winners of Europe's top 5 leagues over the past five seasons:

It doesn't take a genius to make an immediate observation - when teams win, they dominate. There have been only seven instances of a team not named Manchester City, Bayern Munich, Real Madrid, Juventus and Paris Saint-Germain winning the league.

A main reason for there not being fewer than seven teams is because La Liga has seen a level of parity. Barcelona was on their own dominant run before overspending led to an ongoing financial crisis, which has led to a dry spell of success for La Blaugrana.

On the other hand, the NBA, NHL and NFL (leagues which have a salary cap) have all seen diversity in who gets crowned champion:

Compare the two sets of data and the effects of a salary cap are clear. Even though we have only considered 3 leagues - the NBA, the NFL and the NHL - these 3 leagues have produced 12 unique champions, 1 more than Europe's top 5 leagues, who have produced a total of 11 unique champions.

This theory is further solidified after looking at the list of NBA champions before a salary cap was implemented. This is the list of teams that won the Larry O'Brien Trophy before the salary cap was implemented in the 1984-85 season.

Only six teams ever won the trophy in this 22-year span. A salary cap-driven league drives more parity as seen from the NBA crowning 4 different champions in 5 years.

In football leagues that have implemented the salary cap, the results seen are much like the ones seen in the NBA, the NFL and the NHL, where a noticeable rotation of the trophy can be seen:

Another reason a salary cap would benefit football is that it would prevent clubs from overspending their budgets, which would lead to an economic crisis for the club.

A globally known example of this scenario is the current Barcelona team. Hasty decisions by the board such as the signings of Philippe Coutinho and Antoine Griezmann as well as high wages for underperforming players have now pushed the storied club into bankruptcy.

The salary cap, which would place restrictions on player spending for each club, would prevent ill-advised spending, which could eventually plunge a club into financial ruin (obviously, financial fair play rules have reduced the chances of such an event happening once again, however, the salary cap would provide an extra layer of protection.)

Introducing a salary cap would also allow for newly promoted teams to have a better chance of performing well in their league, as they now would be competing on even financial ground with other teams in their league.

How would this salary cap work?

By now, you may have realized a major speedbump on our way - football is a world sport, unlike the NBA, the NFL and the NHL, which are played in the United States and Canada.

210 FIFA members have leagues, meaning imposing a salary cap which suits the budgets of all leagues would be next to impossible.

A constant cap number cannot be maintained across each conference as well, as there will be disparities in budgets between each league, as well.

Thus, the best option would be for each league to impose a salary cap of its own based on the earnings of the league. For example, the English Premier League can have a salary cap of 80 million Pounds, whereas the Spanish La Liga can impose a salary cap of 50 million Pounds.

One method to calculate the salary cap can be to add all the revenue generated in the previous season and then divide the sum by the number of teams present in the league.

This is where we hit another speedbump. The world's best players would prefer to go to the league with the highest salary cap, to maximise their salaries, creating a loss of revenue for the other leagues, who miss out on primary talent.

Fortunately, this can be countered - the salary cap can be imposed only in matchday squads. Assuming the EPL assumes a salary cap of 80 million Pounds, this cap will only apply to players present in the squad for a given game, rather than considering the salaries of all players present in the squad.

However, this rule will not apply to continental tournaments, as different leagues would have different salary caps, which would negatively affect teams which hail from leagues with lower salary caps.

Even though the salary cap would allow teams with higher budgets to still buy players of a higher calibre, teams would still be hesitant in buying such players, as these players will not be playing the ideal amount of game-time which would justify their high price tags.

This means that clubs will have to place their best players in their reserves for any given

game to not cross the salary cap leading to interesting tactical match-day decisions for the

managers.

Furthermore, this rule will require managers to rotate their squads frequently, to give ample playing time to their star players.

It should be noted that the Spanish La Liga does have a salary cap, although the cap varies between each club, which, in my opinion, is worse than having no salary cap.

The leagues could create a fund which would hand over money to clubs whose original budgets would be smaller than the salary cap, essentially allowing all teams to spend the same amounts of money on players.

To answer the question which kickstarted this rant - if football needs a salary cap - my answer is a definitive yes. The salary cap would allow for a level of parity that the sport desperately needs, while also preventing clubs from stumbling into a financial crisis.

We have seen proof of leagues both in and out of football implementing this system leading to multiple trophy winners and teams having to make smart personnel and financial decisions to remain competitive, rather than just depend on their economical prowess.

So, will we see FIFA implement this rule? Although there have been several calls for FIFA to address the trend of richer clubs dominating their countries' tournaments, there has been to such action taken from FIFA's end.

Historically dominant teams would almost certainly be hesitant in allowing for their place as their country's powerhouse to be challenged by implementing the salary cap. However, for the long-term survival of the sport, these teams would have to swallow their pride and accept what would mark the beginning of a new, fair age in football.

Sources - Total Sportal, Sportskeeda, Sqaf