How to curb the ever-increasing spend that has accelerated the divide between the elite teams in Europe and the rest has been something that has been up for discussion for some time.
With the huge boom in broadcast rights in recent years has come the ability, and willingness, of the biggest teams to spend in the transfer market on both fees and players salaries. That has led to a transfer where player value has become distorted and where elite clubs have been able to effectively pull the ladder up from the rest of the field.
The launch of the European Super League plot in 2021, a move of which Liverpool were a part of, saw European football’s governing body, UEFA, attempt to take a firmer stance against the erosion of competition in the fallout that ensued from the breakaway league's swift collapse.
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New financial sustainability regulations were brought in to replace the Financial Fair Play rules that had been in place for a decade but that were deemed to be ultimately toothless when it came to preventing the biggest clubs from pulling away, instead penalising those who wished to close the gap instead.
This week, UEFA president Aleksander Ceferin stated that a move toward a salary cap would be introduced “as soon as possible” in a move that would have ramifications across European football.
Speaking to the popular football-focused US media outlet Men In Blazers, Ceferin said: “For now, we have the new rule after 2024 that you can spend up to 70 per cent of your revenues for salaries and transfers, but that's not enough because if your revenues are five billion, 70 per cent is quite a lot.
"It's not about the owners. It's about the value of the competition, because if five clubs will always win then it doesn't make sense any more. But it has to be a collective agreement - every league and UEFA. Because if we do it and the other leagues don't, then it doesn't make sense."
Ceferin went on to claim that both big and small clubs were in agreement that the best way to stay on a sustainable path in football was to limit the earning potential of the players, with club payrolls having risen exponentially in recent years.
Liverpool's wage bill stood at £366m for the 2021/22 financial year, a period which included significant bonuses paid to players for a season when the club won two domestic trophies, finished second in the Premier League and were beaten in the final of the Champions League.
A number of renewals for key players on improved deals also played a part, but while that figure is set to drop for 2022/23, it will also include for the first time the bumper deal paid to keep Mohamed Salah at Anfield last summer. The Egyptian became the highest paid player in the Reds' history when he put pen to paper on a three-year contract.
When the Premier League began for the 1992/93 season, the annual wage bill at Liverpool was £7.7m, the highest in the Premier League. The rise over the past 30 years has been 4,676 per cent, according to data presented by football finance expert and author of the Price of Football, Kieran Maguire. At Chelsea the rise has been 7,414 per cent, while at Manchester City it has been 8,823 per cent.
To look at the the last decade of Fenway Sports Group ownership at Liverpool, the wage bill has risen by 177.2 per cent, from £132m in 2013 to £366m in 2022.
Ceferin’s stance on introducing salary caps will likely be welcomed by FSG chief and the Reds' principal owner John W. Henry, who in an exclusive interview with the ECHO last month spoke on the need for better cost control measures to be introduced.
Henry said: “There are ever-increasing financial challenges in the Premier League. The league itself is extraordinarily successful and is the greatest football competition in the world, but we’ve thought for some time there should be limits on spending so that the league doesn’t go the way of European leagues where one or two clubs annually have little competition.
“Excitement depends on competition and is the most important component of the Premier League.”
With Liverpool’s business model under FSG having long been one focused on sustainable growth and what happens off the field being key to what can be done on it, and vice-versa, Henry’s stance is unsurprising given the increased challenge that has faced that particular way of operating a football club among the Premier League’s elite.
Only this past year there has been more than £500m in transfer fees spent under new Chelsea owners Todd Boehly and Behdad Eghbali. The London club is now faced with having to ship out a number of high earners in order to balance the books and avoid any potential breaches of profit and sustainability regulations. Chelsea's has, so far, been a plan that has failed in terms of investment. They have sacked two managers this season and are lying in mid-table, with no hope of any kind of European football next season.
But where there may be some desire from owners to curb the spending on payroll, the chief executive of the Professional Footballers Association, Maheta Molango, stated that the plans for a salary cap were “not the solution”.
Speaking to the BBC, Molango said: “[Players] need to be treated as the most important stakeholders and central to these conversations. When players read that 'everyone agrees' with capping their wages, I think they will rightly be angry.
"Without proper engagement or consultation, players are continually being asked to play more and more games. New competitions are being created and existing tournaments expanded. These all generate more money within football.
"Capping the wages of those who create the 'product' that others continue to benefit from is not a solution to ensuring better financial management by leagues and clubs.
"Football's leaders are quickly going to create a real problem if they continue to treat players like this."
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