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Heading into the upcoming A-League season, the salary cap for all clubs is fully guaranteed for all clubs by the FFA courtesy of the much higher broadcast revenue elicited from the new four-year $160 million television broadcast rights deal.
This is a good development, as it helps to underpin the viability of clubs and should ensure the issue of payments of players wages that plagued Central Coast Mariners last season will be a thing of the past.
Generally speaking, there is no debate the general presence of the salary cap is of crucial importance to the A-League.
It ensures viability in a country with a relatively small population and crowded sports market does not see player wages become inflated in an effort to compete with clubs from richer Asian countries.
This means that while there is a player retention issue, there is the added challenge of clubs having to develop an organisational culture where the skills to effectively develop youngsters or scout otherwise unknown foreign imports.
There is also the added challenge for coaches to get their strategies and tactics right, because given most clubs are by and large playing with squads of the same financial value.
The existence of the salary cap, along with a sensible Collective Bargaining Agreement with the Professional Players Association, prevents problems of player wage inflation occurring each time there is a new and higher broadcast revenue deal.
As is the case with the English Premier League in particular.
This in turn means there are surplus funds within the football economy to spend on other areas such as fleshing out the clubs administrative infrastructure or – perhaps more vitally in the long term – being able to buy and develop physical infrastructure assets (such as academies and training facilities).
But there is something of a fine balancing act that needs to be achieved.
There is no dispute that it is to the league’s benefit and certainly exciting that a fixed salary cap set at a uniform amount (currently $2.5 million) which keeps all A-League clubs generally on an even par (even if they are not always even off it in terms of attendance or sponsorship revenue), this system has side effects.
There is a question as to whether it would be to the league’s benefit to modify the structure from being set at a uniform amount regardless of club size, to a structure inspired more by the new UEFA Financial Fair Play rules where the allowable expenditure (or in our case allowable salary cap) for each club is set at a ratio of their income or revenue.
A combination of the two systems might be more preferable as there is still a sensible constraint on the range of expenditure, for example have a fixed $1.5 million base for each and allow the remaining allowance to be determined by club revenue.
For example a smaller A-League club could end up having an allowance of $2.5 million perfectly covered by the TV deal.
A bigger club could end up with an allowance of $3 million or even $3.5 million, which does not end up being a financial issue because the higher revenue generated by a much higher membership base or corporate sponsorship is more than capable of covering the difference.
While care would need to be taken to ensure this does not lead to higher wages spread over the same talent pool.
As a whole with no discernible benefit (wage inflation), the bigger A-League clubs would be able to spend more money on either developing bigger squads or an overall stronger football department.
This would allow them to better cover for player losses that occur during FIFA international breaks, for example.
This would also allow for squad rotation when competing concurrently in the A-League and AFC Champions League at the same time so teams don’t fall away from the Premiership title race, or are even more hard-pressed to qualify out of the ACL group stages.
Alternatively the extra cap space allowed could be used upgrade the contracts of non-marquee players who have had good seasons and assist in preventing these players from being poached by clubs in other leagues such as the US, East Asia or the Middle East.
There is an issue that the current structure works to prevent big clubs from developing something of a winning culture in terms of trophies.
In international terms the brand of a league is often mingled with readily identifiable large and successful clubs from those leagues who feature regularly in intra-continental competitions.
Examples include Manchester United, Liverpool and Arsenal from England, PSV Eindhoven and Ajax from Holland, Real Madrid and Barcelona from Spain, Bayern Munich from Germany etc.
A European-style scenario whereby given the financial and competitive gulf between the top clubs and ‘the rest’ in a given league makes for an often predictable and boring title race needs to be avoided at all costs.
Especially as there is no relegation battle to act as a counter-balance.
There is nevertheless something of a greater need to structure the A-League cap to enable the bigger A-League clubs to translate their off-field strength into on-field strength
After all, it is just as much in the A-League’s interest to be able to have some A-League clubs and coaches to be able to adapt and develop a good ‘continental style’ culture and be competitive in Asia.
As we can see with English teams in the UEFA Champions League, the process often takes years of consistent qualification to the competition before they start becoming genuinely competitive.
A modified salary cap structure would assist A-League clubs to have the ability to go far in AFC competitions on a semi-consistent basis despite the awkward playing conditions and financial gulf that exists in comparison to other participant clubs.
A good example to look at for inspiration is the aforementioned PSV Eindhoven and Ajax of Holland who are highly respected clubs given their competitiveness in UEFA competitions.
In turn, it ensures there is a slightly higher respectability for the Eredevise throughout Europe despite still being in essence feeder clubs in feeder leagues.
A reasonable balance for the A-League would be where there can be a reasonable expectation that a bigger club would finish towards the top and qualify for the ACL.
But there should also be an opportunity for an innovative, well drilled and well organised smaller club to have a realistic chance of winning trophies as Central Coast Mariners have been able to do so admirably.
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