Glasgow Rangers went in to administration this week, providing one of the strongest arguments European football has made in years of the extraordinary benefits of a competition having a salary cap.
The obvious way to take this article would be to use it as an attack on the Gus Goulds of this world. You know, the types who use the argument that football clubs have their own administrative staff, boards and CEOs who should be intelligent and prudent enough with the club’s money to ensure they don’t overspend on players.
As much as £75 million in unpaid taxes certainly suggests the Rangers’ administrators could probably have had a ceiling placed on their player spending to ensure the basics, such as paying their taxes, were taken care of as well.
But instead, it’s the penalty Rangers will be handed from the Scottish Premier League that provides the stronger argument of the need for a salary cap.
The SPL will penalise Rangers 10 competition points as a result of going in to administration. In on-field achievements, that’s stripping them of three wins and a draw, taking them from 61 points for the season to 51.
If ever there was an argument for a salary cap, surely a club being stripped of ten competition points and consequently not only maintaining second place in the competition but also still having daylight as third is a damn strong one.
Compare what being stripped of equivalent points would do to any Aussie team placed second in any of our salary capped football codes.
Going in to round 21 of the A League, Brisbane Roar were in second spot with 35 points. If they were to be stripped of 10 points, they would free-fall out of the top six into seventh place, only clearing eighth placed Melbourne by goal difference.
In the AFL, season 2011 saw eventual premiers Geelong finish second on 76 points. If they were stripped of 14 points (the equivalent of three wins and a draw in the AFL) they would have finished the season on 62 points and thus, fourth on the table. Whilst it is impossible to argue they would not have gone on to win the premiership as they did, it would have been made that much harder as instead of playing Hawthorn in the opening week of the finals, they would have faced Collingwood.
As for the NRL, once again it was eventual premiers Manly who finished second on the ladder. Had Manly been stripped of seven points (NRL’s equivalent of three wins and a draw) their 40 points would instead have been 33, ending up in fourth place. Again, it is impossible to say what would have eventuated had this been the case but instead of facing the North Queensland Cowboys, whom they easily disposed of, Manly’s first week of finals would have been against Wayne Bennett’s Dragons.
Any sporting competition worth its salt is tightly contested, particularly at the pointy-end. When the second placed team in a competition is stripped of points worth three wins and a draw, the result shouldn’t mean they are further away from first place in points but not position. Particularly when, as is the case in the SPL, the top two teams at season’s end automatically qualify for the highly lucrative UEFA Champions League.
Of course anyone with a base knowledge of the SPL will not be surprised by this in the slightest. Since the formation of the SPL in 1998 there have been a grand total of two premiers – Rangers and Celtic.
This domination of football in Scotland dates back even further – the last time a team outside the Old Firm won the premiership in Scotland’s top league was Aberdeen in 1985.
As a result, even if you support any of the other ten teams competing in the SPL, the question of “who do you support” can only be answered one of two ways – Celtic or Rangers.
Imagine, for a moment, the reality of that in Australia.
A series of competitions in which only the two richest clubs ever had a chance at winning the competition, thus ensuring their own cycle of wealth by attracting the biggest sponsors, the most fans and the largest prize money.
As it stands the A League would only ever see Sydney FC or Melbourne Victory win – with Newcastle Jets occasionally popping up depending on how loose Nathan Tinkler’s purse strings were that year.
The NRL would simply be Canterbury against Brisbane – again depending on the Tink’s desire to win versus his desire to actually make money.
The AFL would be Collingwood against Carlton. Could you imagine the shame – half the AFL actually supporting Collingwood?
Happily, Australia’s respective football codes have a system which ensures the equal spread of talent. As a consequence, since the formation of the SPL in 1998, the NRL has had nine different premiers, the AFL have had ten and the A League (including premiers from the old NSL) have had eight.
Meanwhile the Old Firm of the SPL have dominated and even after one of these two teams has gone in to administration, tens of millions of pounds in debt and been docked ten points, there is no sign of the domination ending.
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February 19th 2012 @ 1:09am
Roarchild said | February 19th 2012 @ 1:09am | Report comment
Since they cheated on taxes then they would likely have cheated on the cap too.
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February 19th 2012 @ 1:30am
Ian Whitchurch said | February 19th 2012 @ 1:30am | Report comment
What happened to Rangers is absolutely an argument for a salary cap.
February 19th 2012 @ 1:31am
Football United said | February 19th 2012 @ 1:31am | Report comment
if you bring in a cap the decent players would move to england and scotland would be stripped of any serious european qualification.
February 19th 2012 @ 1:46am
Ian Whitchurch said | February 19th 2012 @ 1:46am | Report comment
Is that better or worse than what has just happened, including the impending fire sale of Rangers’ players to pay their tax bill ?
February 19th 2012 @ 2:53am
Victer said | February 19th 2012 @ 2:53am | Report comment
I’ve always argued for a very tight salary cap in the a-league, it gives smaller market clubs (ie Central Coast) a chance to win. Hell it gives every club a chance to win. That’s what brings in long term fans, knowing your team has a chance to win the competition in most seasons. People arguing for a european style two tier system for the a-league with no salary cap really need to get their heads checked.
February 19th 2012 @ 3:04am
Johnno said | February 19th 2012 @ 3:04am | Report comment
England needs a salary cap too. Apparantly every club in the EPL made a loss last year, it can’t go on. Debt is real and you just can’t keep expecting your government to bail you out via taxpayers money, or survive.
And I am sick of the big 4 winning all the time, and now man city have come up which is good. The german league seems ot have th best set up for managing soccer teams. There model is based on very sound economics.
February 19th 2012 @ 6:24am
Dublin Dave said | February 19th 2012 @ 6:24am | Report comment
The luxury of a salary cap, as with any socialist utopian idea, will only work in out of the way places impervious by way of isolation to market externalities from neigbouring countries. It works well in America, for American sports. And it’s one of the reasons the Yanks are happy enough not to encourage their games to spread outside their shores.
It may well work in Australia, isolated as it is at the bottom of the world.
But don’t kid yourself that it would have saved Rangers. The only possible way that would work would be if every major league in Europe acted in unison to have a trans-continental salary cap in place. And as we have seen with this festering sore of a financial crisis, if there is one thing European administrators can not do successfully it is act in common cause to effect a coherent policy. Any policy.
And soccer clubs are far too stupid to operate such a system wisely. Look how once upon a time not so long ago, two nondescript clubs in Belgium and France behaved to keep a very minor soccer professional in thrall to an employer who first slashed his earnings and then tried to tell him he wasn’t free to seek alternative employment elsewhere. He stood up for himself, took on the big guys and changed utterly the way the club game is adminstered in Europe. His name was Jean Marc Bosman.
Rangers essential problem is they thought they could buy multinational success through overspending. The Holy Grail for its supporters has been for years the hope of winning the European Cup, or Champions League as it is now called. It shouldn’t be beyond them, went the thinking. After all, even the Taigs from across town did it once.
But no matter how much they spent, Rangers never mounted a serious bid for European glory. And now they are learning the lesson that many in Europe have to relearn several times in a generation: that there is no such thing as a market that expands for ever. Markets are finite. Even the property markets. Even, in fact, especially, the sporting market.
Until they realise that, soccer clubs will continue to stuff up and flirt with financial disaster. There is far too much trust necessary for a pan European salary cap to have a hope of working And as Roarchild said, if the buggers can’t be trusted to pay their taxes, what hope have you got that they would operate a salary cap fairly?
February 19th 2012 @ 8:03am
Fussball ist unser leben said | February 19th 2012 @ 8:03am | Report comment
Dublin Dave
Isn’t your reference to “the Bosman Ruling” a terrific example of how it is possible for every major football league in Europe to act in unison?
In England, I reckon, this issue could be decided in 10 minutes. I’m pretty sure in England, any major changes to the Football League (EPL, Championship, Division 1 & Division 2) needs to win majority approval across all 92 clubs. So, if a vote on the implementation of a salary cap were put to the 92 clubs, I reckon the vote would pass 88 “yes” to 4 “no” votes! Same would happen in Scotland and across all Europe.
Of course the only problem would be if the biggest football clubs in Europe decided to break away and form their own league – outside of the constraints of local Federations & UEFA.
February 19th 2012 @ 8:42am
Roger Rational said | February 19th 2012 @ 8:42am | Report comment
No, Bosman is a matter of law, enforced by the EU. It’s not a voluntary agreement.
You’re also wrong about England. The EPL is a standalone entity and reaches decisions on the basis of votes among the 20 clubs, not 92.
February 19th 2012 @ 9:00am
Fussball ist unser leben said | February 19th 2012 @ 9:00am | Report comment
Are you sure about the voting for the EPL changes? Only 2 weeks ago, SBSTV had a documentary tracing the formation of the EPL and it was mentioned that setting up the break-away EPL, to be an autonomous corporate entity, required approval from all 92 clubs.
If you are right then, I reckon, the vote would be 16 “yes” to 4 “no”.
You are 100% correct about the Bosman Ruling being part of EU law. A better example how every major football league in Europe is willing to act in unison would be The UEFA Club Fair Play Regulations which have been approved with the first assessment covering FYs 2012 & 2013 being assessed during season 2013/14.
It shows that UEFA is aware there’s a problem and, I reckon, even the biggest clubs will see this as a way of ending the fiscal madness without “losing face”.
Source: http://www.uefa.com/uefa/footballfirst/protectingthegame/financialfairplay/news/newsid=1744893.html
February 19th 2012 @ 9:59am
Roger Rational said | February 19th 2012 @ 9:59am | Report comment
Yes, I’m right. The whole point of the EPL breakaway was precisely to get away from the clutches of the other 72 clubs and the FA.
As for your suggestion of a 16-4 split, this implies that the likes of Tottenham and Aston Villa and Newcastle would agree to limit themselves to the same cap as Wigan. Why on earth do you think they would agree to that?
As I understand it, you need 13 clubs for a super-majority in EPL decisions and I very much doubt they would get that for a salary cap.
February 19th 2012 @ 10:13am
Fussball ist unser leben said | February 19th 2012 @ 10:13am | Report comment
Why would Spurs, Villa & Newcastle agree?
In my opinion, without a salary cap no club outside the big spenders will win the EPL. Villa were a mighty powerful team in the late 70s and won the European Cup (equivalent of UCL) in 1982. But, in the 20 years of the EPL, Villa have been a mid-table club since the EPL formed.
After a few good finishes in the early years of the EPL & even playing Champions League in 2002 Newcastle ended up playing in the Championship (Division 2) 3 years ago.
If mighty Rangers – who are a bigger global brand than Spurs, Villa & Newcastle – can fall then no club is safe.
February 19th 2012 @ 11:28am
Dublin Dave said | February 19th 2012 @ 11:28am | Report comment
On the contrary. The Bosman Ruling merely showed how European employment law could overrule restrictive structures placed by sporting authorities on the movement of labourers within the EU. Effectively, you are not allowed to discriminate in terms of employment in favour of people of your own nationality over equally qualified people from another country in the EU. I believe this is also extended to countries outside the EU, for example in Africa, who have certain trade treaties with EU countries.
So Bosman ended the rule that UEFA had, for example, which restricted the number of “foreign” players that each club could field in Champions League or other European competitions. The thing is, the idiots might have gotten away with it if the mightly RFC Liege (not to be confused with the rather more accomplished Standard Liege) and Dunkerque hadn’t between them stuffed up a transfer deal involving a player that one team didn’t want to use but wasn’t prepared to let go and that the other team wanted to sign but didn’t want to pay for.
February 19th 2012 @ 7:16am
Roger Rational said | February 19th 2012 @ 7:16am | Report comment
“A series of competitions in which only the two richest clubs ever had a chance at winning the competition, thus ensuring their own cycle of wealth by attracting the biggest sponsors, the most fans and the largest prize money”.
You just described the Spanish league, something the Craig Fosters of this world are loathe to acknowledge.
Give the EPL its due – it has more than two big clubs.
As for a salary cap, it simply wouldn’t work with two clubs so much bigger than everyone else.
February 19th 2012 @ 7:50am
Fussball ist unser leben said | February 19th 2012 @ 7:50am | Report comment
Whilst I consider myself to have many socialist philosophies, I’ve never been positive about the salary cap in football. I would much prefer industry/people to self-regulate their behaviour rather than have regulation imposed upon them. However, when self-regulation doesn’t work intervention is required and, in professional football, a lack of self-regulation & fiscal irresponsibility leads me to agree that football does now need a salary cap.
Anyone, who has played any type of Fantasy Football will know the equalisation effect that results from a salary cap. Of course there will be a downside – we’ll never get to see club teams like Barcelona or Real Madrid. Under a salary cap regulation, those 2 teams would be lucky to retain 3-4 of their current playing squad, with the rest of the squad spread across the Spanish League or other European leagues.
So, yes, bring in a salary cap for all pro-football and, given the fiscal irresponsibility that has led to the world teetering on the edge of another Great Depression, I would go further and not confine the salary cap to just wages of professional sportsmen.
As someone, who analyses fiscal responsibility across public companies, I would love to have Governments – all over the world – put a “salary cap” on the remuneration paid to Executives & Board Members at our publicly-listed companies!
February 19th 2012 @ 8:16am
pete4 said | February 19th 2012 @ 8:16am | Report comment
I think you would struggle to put the SPL into even the top 10 leagues of Europe. Scotland is a small nation of only 5M people. Rangers chasing European silverware on the continental stage has sent the club down this path. You could have a cap in the SPL but they could kiss goodbye any Uefa Champions League or Europa League action in that part of the world and think would have huge ramifications for their domestic league and National teams.
What really happened, if you go back a few years when David Murray was the chairman at Rangers, he famously said that “for every five pounds Celtic spend, I’ll spend 10.” That’s really what got Rangers into this financial mess. If you go back 10 years they were paying players the sort of money that really ought to get you to the quarterfinal or semifinals of the Champions League. Rangers are simply not that big…
February 19th 2012 @ 8:55am
agga78 said | February 19th 2012 @ 8:55am | Report comment
Pete4 Rangers simply are that big, the big 2 in Scotland are equal to Man Utd and Liverpool in support, both hold European records for supporter attendances home and away, the SPL does not generate any tv money and this is holding back both sides.
Both Rangers and Celtic up until 3 years ago were paying their players EPL wages shows the size of the clubs, Celtic could still do it they have a debt of 530k but have chosen to be careful with their spending. Rangers are only in trouble because they tried to cheat the taxman not because they paid too much in wages, it was a scheme which other big clubs in Britain tried and im sure there will be more clubs to suffer a big tax bill in future.
Rangers situation is not an argument for a salary cap, it is an argument for proper governance of a football club.
February 19th 2012 @ 9:23am
pete4 said | February 19th 2012 @ 9:23am | Report comment
agga78 – I’m not saying Rangers do not have a huge supporter base… far from it. I just think these days if you do not come from one of the larger Euro football nations (population wise) such as England, Spain, Germany, Italy and France you chances of clinching the UCL are slim and this is reflected in their revenue as below. Note the top 20 are all from the above nations:
Deloitte Football Money League 2012 – Top 20 clubs in revenue
http://www.football-marketing.com/2012/02/09/deloitte-money-league-2012/
February 19th 2012 @ 3:05pm
Jack Russell said | February 19th 2012 @ 3:05pm | Report comment
That’s because of TV money though, which is a reflection on the popularity of the league as opposed to the individual clubs.
Although I believe the old firm clubs take the majority of SPL TV money anyway. In reality the SPL is probably the worst example of a league that should have a salary cap because 2 clubs are so far ahead of anyone else, and any salary cap is going to be so big that only 2 clubs can afford to pay it, or if it’s set that a majority of clubs can afford it then it’s going to be so small that it renders the old firm completely useless in Europe.