(Bloomberg Opinion) -- European soccer has survived its greatest crisis: not the coronavirus, but commerce. The attempt last month by 12 of the continent’s biggest clubs to create a U.S.-style Super League quickly collapsed, to hoots of derision from fans and much relief from administrators. But short-lived as it was, the proposal brought attention to the dysfunction at the heart of European soccer — and suggested a reform that could well save the sport in the long term.
Because Europe’s leagues impose minimal restraints on spending, clubs effectively must spend larger sums each year to acquire and retain top talent and win trophies. That forces them to pursue every avenue of profit, even at the risk of undermining the sport’s traditions and institutions. In addition to inducing bankruptcies and encouraging corruption, the system all but ensures that a small handful of wealthy clubs dominates year after year.
Elsewhere, sports leagues have solved this problem by simply restricting how much franchises can spend. Salary caps are the norm in cricket (the Indian Premier League), Rugby Union (Premiership Rugby), and most American team sports (the NFL, NBA, and so on). In most instances, teams have the additional protection of assured participation, regardless of their sporting achievements.
This arrangement benefits both owners and fans. It creates a level playing field for franchises in a given league, but allows the marquee names to maximize their commercial potential. In baseball, for instance, 14 different franchises have won the World Series over the past 20 years. Yet the New York Yankees, despite winning it only once in that period, are far and away the sport’s richest club.
It’s easy to see why 12 of the biggest soccer clubs wanted to replicate that model in Europe. In attempting to do so, however, they made two mistakes.
One was that the European Super League would’ve guaranteed annual participation for the big clubs. While this would assure broadcasters that every game featured glamorous names, it almost certainly wouldn’t fly in Europe. The sport’s administrators, including Union of European Football Associations and all the national leagues, are dead set against the idea. Sporting chance, they argue, demands that the elite be demoted for poor performance and humbler clubs be promoted for excellence.
Next, the founding clubs agreed to limit their “sport spending” — including salaries and transfer fees — to 55% of revenue. This was a poor iteration of a good idea. A salary cap of some kind is exactly what Europe needs. But a spending limit based on revenue would merely preserve the disproportionate advantage enjoyed by the big clubs.
Better to embrace a Europe-wide salary cap along the lines of the National Football League. The ceiling imposed on American clubs — set at $182.5 million for 2021 — hasn’t prevented the NFL from becoming the world’s most profitable sports league, or the Dallas Cowboys from remaining the most valuable franchise for five years running. It also helps ensure that most teams have a fighting chance at the beginning of each season.
Although the leading European soccer clubs have flirted with the idea for years, UEFA has never seriously attempted to impose such a cap. Now, the combination of the economic damage wrought by the pandemic and the anxiety caused, however briefly, by the prospect of a breakaway league should give impetus enough to finally do so.
A Europe-wide salary cap would not be without complications, to be sure. It would be a tough sell (at least initially) to the bigger clubs that would have to slash payroll. Players’ unions have also historically opposed such restrictions, even in lower leagues. But a cap would prevent the top clubs from perpetually hoarding the best talent, make national leagues far more competitive and less predictable, and place the sport on sounder financial footing for the long term.
It would also capitalize on an insight that NFL owners hit on long ago: There’s more money to be made when anyone can win.
Editorials are written by the Bloomberg Opinion editorial board.
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