And Now for Something Completely Different: EPL Soft Salary Caps
About these soft salary caps. These salary caps are not the result of negotiations with a union, right? I'm no expert on EU or British antitrust law, but this is blatant price fixing, right? Somebody please explain why this is legal?
It is probably a borderline case. For the most part the problem isn't the restriction itself but the limitation to revenue. The limitation on salaries is allowable if the League can show it is to the benefit of consumers. Compared to US law where there is a more objective analysis the League has the burden of proof. The Financial Fair Play rules have been relaxed to avoid a similar issue. The problem is that there could be a limit on equity injections (sugar daddies) where some oil prince decides to pump in money. The restrictions on wages is limited to those clubs who are losing money, and they can only spend enough to make up for their increased revenue. It is a cap only as far as it limits the ability of clubs to become insolvent. The FFP rules were relaxed in the ability of owners to directly inject cash to boost wages under a direct threat from PSG and Man City who failed the first round of FFP.
Restricting the ability of a club to become insolvent is perfectly necessary and justifiable as it isn't necessarily Directed at an economic purpose. This is the Mecca-Medina exception that allows drug testing.
Thanks for your reponse but I think you are talking about FIFA FFP, which is quite different. These rules specifically prohibit teams whose wage bill is above a certain amount increasing that bill by more than a particular amount. It isn't limited to teams that are losing money, a la FFP.
It is probably a borderline case. For the most part the problem isn't the restriction itself but the limitation to revenue. The limitation on salaries is allowable if the League can show it is to the benefit of consumers. Compared to US law where there is a more objective analysis the League has the burden of proof. The Financial Fair Play rules have been relaxed to avoid a similar issue. The problem is that there could be a limit on equity injections (sugar daddies) where some oil prince decides to pump in money. The restrictions on wages is limited to those clubs who are losing money, and they can only spend enough to make up for their increased revenue. It is a cap only as far as it limits the ability of clubs to become insolvent. The FFP rules were relaxed in the ability of owners to directly inject cash to boost wages under a direct threat from PSG and Man City who failed the first round of FFP.
ReplyDeleteRestricting the ability of a club to become insolvent is perfectly necessary and justifiable as it isn't necessarily Directed at an economic purpose. This is the Mecca-Medina exception that allows drug testing.
Thanks for your reponse but I think you are talking about FIFA FFP, which is quite different. These rules specifically prohibit teams whose wage bill is above a certain amount increasing that bill by more than a particular amount. It isn't limited to teams that are losing money, a la FFP.
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