Uefa plans salary cap and luxury tax in place of FFP
Uefa is set to propose a salary cap and “luxury tax” on clubs as an alternative to its Financial Fair Play rules, it has been reported.
The new system would limit clubs to spending a certain percentage of their revenues on salaries and impose financial penalties, or luxury tax, on any club who breached those limits.
It comes a year after Aleksander Ceferin, Uefa’s president, warned that a Europe-wide salary cap could be introduced after the financial impact of the coronavirus crisis had subsided.
The luxury tax would effectively represent a fine for clubs who have exceeded the salary cap, and the money would then be redistributed to other teams.
The Times reported that the latest proposals were set to be put forward at a Uefa convention in Switzerland next month, where national associations, leagues and clubs will discuss the future of the sport.
Ceferin warned last year that Uefa’s FFP regulations could be adapted to the “new times” as the football world recovered from the pandemic.
“If they [clubs] don’t follow the rules they will always be sanctioned, but of course we’re thinking about how we can improve our regulations,” he said in May 2020.
“This will not happen very soon, but we’re thinking of improving [FFP], modernising it and doing something more about the competitive balance. We’re also considering some sort of ‘luxury tax’, if it’s possible.”
The argument in favour of a salary cap and luxury tax is that it would help to promote a more competitive landscape by allowing wealthy owners to invest heavily in their teams, at the cost of helping other clubs through the redistribution model.
Such a system would give more flexibility to smaller clubs with ambitious owners who wish to invest in their teams in order to challenge the more established, powerful sides who have higher revenues.
The botched European Super League also planned to impose a salary cap, with the 12 breakaway clubs all committing to using only 55 per cent of their revenues on salaries, agent fees and transfers before the project fell apart.
The news comes after Nasser Alkhelaifi, the Paris St-germain president, rejected the suggestion the
club could breach FFP regulations due to the signing of Lionel Messi.
Al-khelaifi said they had signed Messi, who has agreed a deal worth more than £1million per week, only because they believed they were allowed to do so under the current financial rules.
“Before we do anything we check with our commercial and financial and legal people,” said Al-khelaifi. “You can see what Leo has brought to the club is huge. What you in the media need to focus on is not just the negative.
“There’s a lot of positive he is bringing to the club. It’s a big asset. The club increases in every part, commercially. We will give you some numbers and you are going to be shocked. We will always fulfil the FFP regulations.”