What is the purpose of salary cap, salary floor and draft systems and is it good for sport?
This is not an article I ever planned to write but the significant response generated in my European football hypocrites article has forced my hand.
It was impossible to engage with the all comments on the article, particularly with enough depth to justify the direction the debate was headed.
The article was written in response to predictable and tiresome jibes from Manchester United or Liverpool, for example, fans towards those supporting those sides new to success, such as Manchester City or Chelsea perhaps.
Essentially I was highlighting the hypocrisy of these detached fans that support sides purely because they are or were successful or have or had the best players.
Eventually the debate became focused on the absence of ‘socialist’ sporting policies in European football. This ‘free market’ is in stark contrast to Australian domestic sporting competitions, in which varying degrees of restrictions are imposed on our sporting sides.
As with any difference of system, each has their own advantages and disadvantages.
If we look at the European football model a number of observations can be made.
Firstly and most significantly, it is important to point out the freedom clubs are afforded to be successful. The absence of restriction empowers clubs such as FC Barcelona and Manchester United to create global juggernauts of self-perpetuating success that just isn’t possible in Australian sport.
Barcelona is given the opportunity to create and maintain perhaps the greatest club football team in history, which Australian sport would certainly have prevented.
At the very least Pep Guardiola constructed a team to match AC Milan of the early 1990s. If we were to translate this into modern Australian sport Greg Inglis, Matt King, Jeff Lima, Adam Blair and Israel Folau would still be running out under Craig Bellamy at the Storm week in and week out.
For every Barcelona however there is a Leeds United or Portsmouth Football Club to counterbalance the potential for enormous success.
These clubs were, at different points in time, approaching the summits of English football. Leeds made the Champions League semi-finals while ‘Pompey’ won the FA Cup and qualified for Europe before the house of cards inevitably came crashing down.
It’s hard to imagine but clubs like Portsmouth have many thousands of long suffering fans that only briefly allowed themselves to enjoy a little success before poor off field management sent them plummeting down the leagues and staring at relegation to conference football.
Fundamentally the system fails to protect clubs from themselves and, in turn, fans that have done absolutely nothing wrong.
Another feature of European football is the amplification of competitive advantages that large market teams hold over smaller centre sides.
In this model, sides that have established global appeal such as Manchester United or dominate major cities such as Juventus have far greater market places from which to source income streams.
No amount of astute management will ever enable a side such as Peterborough to organically match the turnover of United.
The absence of a salary cap has, over time, turned competitions into a series of mini-competitions. The English Premier League, for example, is a competition in which three sides had a realistic shot at the title this year while another five sides fight it out for fourth place.
As you go down the table there is competition for European football and an eighth placed finish, mid table security and the inevitable relegation dogfight.
While it is true that fans of English football sides at all levels can hope and dream of some form of success (look at the resurrection of Swansea City immortalised at Wembley last week for evidence), there are very few teams and thus fans that harbour realistic chance of the ultimate prize.
Essentially sides such as Everton have become content with a sentence in eternal limbo, in which eking out top eight finishes in the Premier League is considered successful without ever seriously challenging for any silverware.
The alternative is practiced in domestic sport here in Australia, in which no NRL side has won back-to-back titles in 15 years and often grand finalists have fallen outside the top eight in 12 short months.
We can conclude the absence of artificial restrictions definitely empowers sporting teams to reach the highest of highs but the flipside of this it that enough rope is provided for which clubs can hang themselves.
Whether this is a good thing or not I will leave up to my fellow Roarers.
I thoroughly enjoy the European football model as a detached fan but while domestic models aren’t perfect, I wouldn’t be in any great rush to swap.
nordster
Guest
The head of a sporting competition does not by default need to be a 'regulator' to such a degree. A more healthy model would be club based so the big admin jobs going forward should be CEOs of clubs not the league. Would be a far more interesting job also u would imagine.
nordster
Guest
Haha nice...tax havens u would think might have some support at ffa hq :) In exchange of course for opting out of govt handouts...
nordster
Guest
Yeah there is a spectrum of libertarianism. From classical liberalism at the softer end (Hayek, the original oz Liberals...Bert Kelly etc) to Minarchist (Ron Paul, Ayn Rand) to Anarcho-Capitalist (Rothbard). Minarchists believe in some small govt to varying degrees, id place myself here. But for public funding of education/health it tends to be voucher based as a safety net rather than govt run education/health. Which is a more efficient way of focusing govt spending. Also allows for some investment in large scale infrastructure. Welfare is a tough one...more directed to young people in training rather than being such a welfare trap type system...all my family are on welfare so i know i am very cynical about too much of it... Military wise it is more strict defense rather than the current offense double speak militarism!
Australian Rules
Guest
Certainly Demetriou has never accused players of being greedy, though the AFL believes there is an imperative to have a sustainable salary cap which keeps the comp even...or tries to at least. You referring to Sir Don with your cricket reference? That was 35+ years ago.
dasilva
Roar Guru
I don't have a problem with CEO being rich and wealthy I just have a problem of people having a problem with players earning too much money and telling players they are greedy for negotiating a share of the very large revenue the sport makes. I have a problem when the same CEO making large amounts of money goes in public and say there are people who are willing to play sports for nothing and accuse players for being too greedy (I'm not necessarilly referring to AFL there but I do remember the cricket establishing using that trick)
Australian Rules
Guest
There's over 700 players in the AFL... and 1 guy who runs a billion dollar business, regulates a professional competition across the country, secures the revenue, supports 18 clubs and oversees the grassroots community programs. I don't have a problem with him getting remunerated at market value.
dasilva
Roar Guru
I'm not 100% free market (I did say below that although I have libertarian sympathies I don't consider myself completely libertarian). I do prefer no cap but the percentage of revenue is a decent enough compromise that I can accept. I think that's something the A-league should head towards instead of a flat cap
dasilva
Roar Guru
+! Sometimes I can't believe it when people complain about players being payed too much What they are essentially saying is that owners and administrators should lord over the money and give only a small fraction to the players. If the sport is a multi-million dollar industry and you then cap the money the players can make. Where does all the excess money go? Yep to the owners, CEOs, boardmembers etc. It's certainly not going to go to every day person pockets The whole sportsman are payed too much is just anti-worker nonsense
Adrian
Guest
yep Lroy, where else do you ever see the CEO make the big bucks, and the works take home nothing :))))) (joke)
Lroy
Guest
There is more money than ever in sport, if you restrict players salaries, the people who earn the big bucks are administrators... Have look at the AFL.. . top players earn approx 700k-1 million.. while the CEO earns about 2.5 million.... ridiculous.
Adrian
Guest
So dasilva...you ok with big Government (UEFA) telling clubs they can only spend a x % on players wagers :) maybe your not 100% free market side
dasilva
Roar Guru
North Queensland fury requested in running the club for the next season but with the wage bill below the salary floor to FFA and that was rejected and they folded instead Would they have survived without the salary floor? Maybe and maybe not but they would have had a chance In terms of UEFA bringing in rules. I'm under the impression it is one of those % of revenue instead of a flat limit. Which is fine by me
Adrian
Guest
"North Queensland Fury would have survived" this is a guess at best..you're guessing that North Queensland Fury would accepted they was a small budget club and not spend more then they take in...everything that happens in European football says other wise . which is why UEFA is trying to bring in rules , to stop clubs spending more money they take in
dasilva
Roar Guru
All this talk of libertarian Has made me have this song going on in my head https://www.youtube.com/watch?v=ZqK97av7I3s
dasilva
Roar Guru
Yes I agree However the only way PFA will ever allow the removal of salary floor and minimum wage is if the FFA decided to get rid of the salary cap
dasilva
Roar Guru
I wouldn't call myself a libertarian predominantly because of this I support some degree of wealth redistribution for these two reasons 1) Minimum standards -No matter how lazy or incompetent you are, no individual deserves to be starving or lack drinking water or dying of easily preventable disease. So I support a safety net like public health system 2) Equal opportunities - I don't believe in redistributing wealth to reduce the gap between rich or poor or anything like that but I do believe in wealth distribution to ensure that a child born in a poor family has as much opportunity (as possible) to succeed as a child born in a rich family. The idea that poverty shouldn't be self-perpetuating and there should be some class mobility. Try to reduce the amount that inheritence plays in success. So I support public schools and HECS like system where student can get educated without paying obscene amounts of money and only pay it back when they are working and already "made it'. So these types of belief prevent me from being a hardcore libertarian but I will say I do have some leanings to it's philosophy. If I was in the US I would probably be a bleeding heart lefty but in a country like Australia I probably just be a mild libertarian.
nordster
Guest
The other issue with minimum wage is that is restricts the ability of people entering a profession to get experience and a foot in the door. For the cost of one minimum wage player here, a club could potentially afford to sign three to five players on match payments imo. The upside of this in a competitive environment such as football, is that it creates well *competition* for spots which drives up everyone in a squad. Including higher contracted players looking to maintain and build on that status. I know the argument against minimum wage sounds harsh but it really does make sense when u think it through. Took me a while. Recommend any doubters to have a watch/read of some Walter Block videos/articles via google 'walter block minimum wage' to get more of a drift.
nordster
Guest
ZING! Cheers mate the main reason i have banging on about this is just to convince one or two people here and there. You are quite the way along to 'libertarian' but i'll just shush now as i dont wanna jinx it! Made my day though :) (The political compass quiz is fun...i sit just a smidgen on the right of centre which surprised me given my leftist history but hard to the libertarian end.)
nordster
Guest
cheers dasilva ...covered the main point....just on clubs being propped in europe vs here...in europe they just get reconstituted as a new club, as the old is usually liquidated as a natural and necessary market function. Or alternatively they are injected with new capital as required ...well ideally new capital, in fact it is often just new Debt which goes to my point about some restrictions there. In Australia, they are literally propped up with redistributive payments and anti-competitive measures. Imo that makes them incapable of ever being able to be run as a real, functioning and importantly sustainable entity. They have their bad decisions mopped up centrally, which when viewed as moral hazard in a sense just perpetuates that bad governance on a broader scale. Other clubs see these sins being excused and expect the same. This is what a lot of Austrian school economics tries to point out.
dasilva
Roar Guru
Foreign player rule is there to ensure youth development for the national side of which the competition is based Salary cap is there to ensure a "level' playing field. Whilst they both do restrict the clubs from being the best they can be, the intent of the rule is different. I don't believe a level playing field to be a desirable end goal in any sporting competition but I do believe development of national side to be a desirable goal