Holding the Line: A Dynamic Salary Cap for European Association Football

European association football’s domination by a select few teams with the plentiful resources to buy talent exposes how a sports league can develop runaway disparity without the presence of any wage spending controls. With the introduction of the UEFA Financial Fair Play rules to keep teams from furthering their debt, much discussion has ensued on whether these financial laws need to be expanded to address competitive imbalance. While salary cap systems have been proposed before, none have been able to balance the interests of owners, fans, players, and regulators within the European Union. I plan to add to the discussion by reviewing existing proposals and salary cap systems in other leagues such as the NFL and NBA. Although an open market in European football promotes overall talent, the football associations can implement a dynamic salary cap that uses a baseline plus a percentage of team revenue in order to target large spenders while allowing smaller teams to continue growing. Dynamically adjusting the percentage of revenue that teams can spend on player wages accomplishes the flat salary cap’s intent to provide a more even playing field while maintaining the conservative approach of a percentage-of-revenue salary cap to not overstep legal regulations. More balance in competition provides for objectively more entertaining football, but can negatively impact overall talent as players look elsewhere for higher wages. Without further spending restrictions beyond Financial Fair Play, the disparity in European association football between the high revenue clubs with owners willing to spend their own money for talent and clubs struggling to compete will continue to grow, especially in the Premier League, La Liga, Serie A, Bundesliga, and Ligue 1. A dynamic salary cap in European association football can address this growing problem while maintaining the high standard of play that has elevated these national leagues to a global scale