Is a salary cap the solution for Premier League’s inflated transfer market?
By George Nagai
The amount of money in Premier League is astronomic. The influx on money into the league has created an inflated transfer market. Could a salary cap be the solution?
As good as Kyle Walker may be, considering Leonardo Bonucci was sold to A.C. Milan by Juventus for around £35m, £50m for Walker is astonishing.
Plenty of transfer fees this summer have been grossly inflated. Tiemoue Bakayoko is a great talent, but a €40m transfer fee for a player who has enjoyed essentially one great year is overpaying.
There are several reasons for the prices. The main reason is the television money being pumped into the Premier League. It is unheard of in other football leagues. Premier League teams across the board have significantly more money than their relative counterparts in other European leagues.
Foreign clubs know the Premier League clubs have exorbitant money to spend. When a foreign team hears about interest in their players from a Premier League team, the prices instantly increase significantly.
It is understandable why the prices are as they are, but is this good for the game? If not, could a salary cap help solve the problem?
As for parity and sustainability, looking across the pond towards the US could provide a rule that helps regulate the league.
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There have murmurs about introducing a salary cap for some time, especially in German football. This concept was largely aimed at stopping teams such as Bayern Munich from cherry-picking talent from the rest of the Bundesliga.
The salary cap introduced would be identical to the salary caps currently in practice in US sports. Clearly, the aim of the cap is to promote parity and allow for greater competition throughout the league.
Leagues such as the National Football League have hard-caps, preventing teams from collecting top talent and stockpiling players. Teams in the Premier League, such as Chelsea, have been accused of stockpiling youth talent.
This is possibly too restrictive for the owners of Premier League owners. A soft-cap is the best option. It regulates the market as well as encourages competition, without being restrictive.
A soft-cap means that a team can go above the set cap but have to pay a substantial tax. The amount is dependent on how far above the cap the club’s expenditure has reached. The proceeds of the ‘Luxury Tax’ is distributed equally to the teams under the cap. This is an incentive to stay below the cap, as well as giving teams below the ‘Top Six’ more revenue and power in the market.
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The League’s spending would be regulated to a greater extent and easier to control. In the long run, a cap would be beneficial to other European leagues, with Premier League teams no longer possessing the ability to take any player they want.