Portsmouth, hoisting aloft the FA Cup just two years ago, will sink into administration today and unless the EPL introduce a salary cup, many others face a similar fate.
EPL clubs have debts totalling over A$5.5 billion, more than every other European league combined.
Average playing salaries are notoriously difficult to pin down given transfer fees skew the numbers but on the most recent figures, the average EPL wage is between A$2.1 million and A$2.4 million.
While plenty to most, it is not an unreasonable figure, albeit ten times the average AFL salary but half the going rate in the NBA.
The European season runs ten months of the year and playing to huge markets brings about greater revenue and in turn, greater salaries.
Broadcast rights from Sky and Setanta alone amount to almost A$3 billion over the last four seasons.
Opponents of such a proposal claim any cap will prompt star players to defect to fellow powerhouse leagues in Spain and Italy, yet there has not been anything approaching a mass exodus in recent years while Spain have charged players as much as 30% less than under the UK’s taxation system.
While Portsmouth’s woes may be as much about mis-management as a desire to match their EPL counterparts, it is a reality facing all but the biggest clubs.
The fate of Leeds Utd, third in the premiership in 1999/2000 but now battling away in League One, appears to have gone unnoticed as the neon warning sign it should have been to rival clubs.
Manchester Utd, Liverpool, Chelsea and Arsenal have built their considerable success with mammoth spending on facilities, coaching, scouting and of course, rare playing talent the likes of Portsmouth feel pressured to match.
A sensible and actively enforced salary cap, perhaps with an A-League style exemption clause to permit a marquee player outside the cap, would ease the pressure on middle and lower tier clubs and promote greater competition within the league.
Only four clubs have tasted premiership success in its now 18 year history and the FA Cup has included a proverbial ‘big four’ club in all but one final since 1991.
Under the current arrangement, fans care more about survival than success given they have no legitimate hope of snaring silverware.
For entire cities to celebrate finishing 17th of twenty, thus ensuring their survival in the premiership for one more year, should be considered a sad indictment on the EPL.
Any responsible administration would seek to not only protect its participating clubs from insolvency but also oversee and encourage their development, yet it appears any move on the introduction of a mandatory salary cap is further from realisation than ever.
Such inaction will sadly see the demise of more than just Portsmouth.
Tony
Guest
Hmmm... according to Wikipedia, the average EPL salary in 2008 was £676,000 which is A$1.1 million, which is a little over 4 times the average AFL salary, not 10 times. It's not hard to see that there would be plenty of AFL players earning more than EPL players. Average NBA salaries are approaching A$6 million. Interestingly, the differential between NBA salaries and EPL salaries is greater than the differential between AFL salaries and EPL salaries, and neither the NBA or AFL are $5.5 billion in debt. What relevance does this have? About as much relevance as the pointless reference to salaries in other competitions has to the thrust of the article, so why are they even mentioned?
MV Dave
Guest
" ManU managed to lose 45 million in a year when they won the EPL and Champions League. " ManU make plenty but are weighed down by the debt the Glazers put on the club to buy it. Regarding the debt of many other English clubs tis a sign of the times unfortunately...everything should be done to save Portsmouth and l'm sure they will survive but in the lower leagues...will follow the same path as Leeds United and probably take a decade to recover. Solutions...l dont think there is just one...may well involve some sort of systems as used in the Bundesliga but it will probably need intervention from FIFA/UEFA to implement some financial rules which can be enforced throughout the world.
JiMMM
Roar Rookie
It's not a salary cap in the traditioanl Australian sense which is more of a $ figure, but very much would be in the EPL
Travisty
Guest
Well something needs to be done. So many of the clubs are running at a loss. ManU managed to lose 45 million in a year when they won the EPL and Champions League. English news is saying that Portsmouth will go into administration today.
Stephen Smith
Guest
What rubbish! Football operates on free market principles - clubs are businesses, and just like in the real world, some are run badly and go by the wayside. The great thing about English football is its honesty - Portsmouths story is out there and everyone is (rightly) taking pot shots, but someone will save them - they always do. In Italy, debts are merely "re-structured" (Roma a few years back) and with the help of city (ie taxpayer) funds, they survive. Salary caps only work in sports where there is no global market - league, AFL, NFL - if you introduce a salary cap in England (which would never happen - turkeys don't vote for Xmas) - the top players would merely go to the next highest bidder. You would need a world salary cap - good luck implementing that!
Phutbol
Guest
Only problem being that you will still end up with the same inequalities that exist now ie the big clubs (ManU etc) with the biggest turnover will be able to stomp on your Hull's and Stoke's within a turnover based system. It will just stop the ManC's from competing when they find their rich benefactors. Globally, football is a business and the reality is that businesses go broke from time to time.
Mushi
Guest
How is the german model not a salary cap?
AndyRoo
Roar Guru
You don't actualy get 100m for winning the Championship, it's the playing in the premier league that generates the 100m. That's why winningthe championship is worth 100m, as is staying in the premier league.
Art Sapphire
Guest
Roger Rational - you observation is mediocrity with a capital M. You can watch a Bundesliga game for $20-$25 standing in the terraces. The game is affordable to families and the working class. We pay the same to watch the A-League. However, for that money the Germans can watch players with the quality of Robben, Ribery, Ozil etc, etc Here is a nice little stat. German Bundesliga 09-10 - Average Attendance: 42,185 English Premier League 09-10 Average Attendance: 34,263 The German punters are voting with their feet and not paying thru the nose to boot.
The clint
Guest
Its all about money management not salary caps. More problems are with transfer costs than salaries. As a pompey fan ive kept a close eye on there troubles and the fact is they spent to much on players to quick to compete with the big boys. Harry Rednapp and Sacha Gaydamek are big culprits in all these problems for portsmouth. Generally the money troubles in England are due to big spending on to many players to enter or stay in the top flight of English football.
Footbal Person
Guest
How the hell is the bundasliga Mediocre its one of the best leagues in the world.
moo cow
Guest
As much as I like the the idea, heck I've thought of it too myself, the problem is there are to many stakeholders who would be affected (mostly negatively) from a salary cap, especially FIFA.
Roger Rational
Guest
Bundesliga = Mediocrity
Footbal Person
Guest
Portsmouth owners would want to go down wouldn't they? If they can claim the championship I beleive that adds 100 mill to your coffers.
Ben of Phnom Penh
Guest
noted and agreed. The Bundesliga model rewards good business plans
Slippery Jim
Roar Rookie
No need to panic about the Porstmouth problems, something similar (actually more disastrous) happened before to Leeds and the same thing happens in Leagues around the world. Even the A-League with probably one of the most restrictive salary caps in the world dissolved a club due to lack of finances. At least Leeds, Portsmouth and others did not cease to exist. The concept of a salary cap goes contrary to the Premier League 'Virtuous Circle' model and would not be introduced without a complete remodelling of the league in England. One thing that needs to be remembered is that the Premier League is the most lucrative domestic football league in the world. TV rights alone generate billions of pounds for the clubs, in addition to the benefits of lucrative involvement in Europe, unrivalled sponsorship income and other revenue streams. I agree more or less with what Art is saying in that if a change is required then it should be a percentage of turnover. The fact that the UEFA Champions League is considering introducing penalties for clubs who spend more than their revenue shows this is likely to be the direction that is taken, if any change is required at all.
vas
Guest
what the current market is going to teach european football clubs is that there is always a limit. it's fine to spend big, but like any business decision, you have to get a return, and also pay back your loans. a salary cap would work in theory, but it would never be effected. the success of the epl has thrived on the big-money success of manchester united and chelsea. take that away, and you're handicapping certain clubs out of success, and you're giving impetus to other clubs who are equally badly mismanaged. portsmouth's plight is clear indication the overspending hasn't occurred merely at the top. what will happen is that for the next few years, the transfer market will be very quiet as clubs attempt to address their balance books. they will attempt to buy cheap and sell big. and the other good news is that, clubs may actually re-focus much of their budget on their youth systems, as this will be a crucial provider to their future success. the current market is a reality check for everyone, and should be heeded as such...
Art Sapphire
Guest
The EPL does not need a salary cap. What it needs is regulatory controls ala the Bundesliga. In the Bundesliga, German clubs must remain at least 51 per cent in the hands of its own members and have to open their books to show that they are not spending beyond their means. What this means is that people like the Glazers can't go in and take over a club with a mountain of debt. The fate of Leeds as you note is actually an indictment on the English clubs paying way too much for average players and living beyond their means. Suggesting a salary cap is ludicrous an unworkable as the EPL clubs comes in different sizes - where smaller clubs can be promoted to the EPL and bigger can drop out (Newcastle) Below I have listed the estimated transfer market values of the top 4 squads and bottom 4 squads in the EPL. Where do you set the cap to pay for these players?. It has to be large enough for the EPL clubs to be competitive in Europe. But what's to stop a small club then from over-reaching and still getting into trouble. The best solution as JiMMM noted is a salaries determined by percentage of turnover and ideally for clubs to be majority owned by members. Chelsea FC 436.450.000 - Pounds Manchester United 375.050.000 Liverpool FC 321.600.000 Arsenal FC 304.000.000 Hull City 65.000.000 Birmingham City 64.250.000 Wolverhampton Wanderers 58.500.000 FC Burnley 47.300.000
David
Guest
Yea i have to say it dose need one bad
Fivehole
Guest
I can't see the big four agreeing to this, and if they were to defect to a "Super League" them the Premier League would lose some of its lustre. Although i agree with the intentions. Its only a matter of time before the Glazers need to get out of ManU.