Forget salary capping. Football just needs to be more grown up

(by Hugo Saye)

“I think it’s about time for the Premier League… to think about how the clubs stop firing the money out to the players and agents as fast as the chief executive Richard Scudamore can bring it in… What we should do is agree on a salary cap.”

Those were the words of Sunderland chairman Niall Quinn last week in response to the financial crisis facing many sections of the Premier League. Looking at that quote there is one thing that really stands out, one thing that would strike anyone who removes themselves from the crazy world of footballing “business” and considers the issue with a reasonable mind – what the game needs is not a salary cap, it is a sense of responsibility.

Niall Quinn is not an outside observer commenting that clubs’ spending needs to be reigned in, he is the chairman of one of those very clubs about which he is talking, more specifically chairman of a club that ran at a £26 million loss over the 2008-09 season. It is not the job of the Premier League to control Niall Quinn’s spending, it is the job of Niall Quinn.

This is not a criticism of Quinn or Sunderland in particular, rather it is a criticism of the culture of which his words are symptomatic. It would be easy to say that he is seeking to absolve the clubs of blame and instead looking to pass the buck on to the authorities but, in fairness, that is not the case. The reality is far less cynical, but deeply pathetic. Like a drug addict going into rehab as the only way to check his habit, football clubs have now reached the stage where they can no longer manage their own self-destructive behaviour and so look to a higher power and declare: ‘control us please, because we cannot control ourselves.’

There has never been so much money in football as there has in recent years but there has also never been so much debt because, while we are at a financial peak, we find ourselves at a moral nadir. The game has never been so lucrative or so vacuous. And it is easy to understand how we have come this far from the game where, as is so often preached, players used to take the bus home after matches and share a pint with the fans.

Football was once simply about sporting competition. But in the 1970s then-FIFA president João Havelange teamed up with Horst Dassler – son of Adi Dassler, founder of a certain sportswear company, I’m sure you can guess which one – and a British marketing man named Patrick Nally. Their mission was to turn the potential that lay dormant in the game’s global following into cash, and the way they approached the 1982 World Cup changed football forever.

Soon corporate millions were flowing freely around the game, and with the formation of the Premier League in 1992 and the ever-increasing TV revenues that came with it, everyone had more money than ever before. But in this rapid spiral football lost what remained of its innocence as cash and glamour became driving forces.

The advent of the internet meant that every fan suddenly had a platform and it was no longer enough to be also-rans, everybody wanted the biggest prizes, the star players and the most glory. And most importantly, they wanted it now. Once mega-rich owners became all the rage they suddenly found that was possible, and the last dregs of fiscal responsibility and self restraint were gone.

But salary caps are not the answer to the game’s problems. For a start, if the Premier League puts such measures in place it significantly weakens itself in comparison to its major European rivals, most pertinently Spain’s La Liga. English football is already straining to attract and hold the top players in the wake of the recent 50% income tax placed on the country’s top earners, and by limiting the amounts we can offer we will be simply unable to contest the lure of Spain.

As well as making our league less competitive on a sporting front, this also has the knock on effect of diluting the Premier League’s ‘product’, weakening its hand when negotiating broadcasting rights and therefore hitting income streams. This means that while clubs might be spending less they are also bringing in less, and so they are right back where they started.

A further criticism of the salary cap idea is that it punishes those clubs that are run sensibly. Quinn is not suggesting we set a ceiling figure on salaries, but to limit the proportion of a club’s revenue that can be spent on wages. But if this limit is set at say 70%, what about a club that spends less on transfer fees so it can afford to put 75% of its income towards staff costs? That club may be turning a profit overall but suddenly it has to lose players in order to avoid being docked points, all because some other club couldn’t stop spending.

Finally, in relation to that last point, consider the findings of Simon Kuper and Stefan Szymanski in their book Why England Lose. Using a technique called regression analysis they showed that between 1978 and 1997 clubs’ transfer spending explained just 16% of the total variation in their league positions, whereas spending on wages explained 92%. Between 1998 and 2007, despite the changing nature of the game, that figure was still up at 89% for Premier League and Championship clubs. In short, spending money on wages appears to be far more significant than spending on transfer fees in determining a club’s eventual success, so if a club chooses to direct 75% of its revenue that way then they should be allowed to do so, as long as they can afford it.

Football clubs are not run by children, they should not need restrictions put in place on how they channel their income, but sadly it seems that they do. Pinpointing the best way to go about this is a matter for another discussion, but salary caps are not the answer. Idealistic as it seems, behaving like responsible adults would be.