How American Sport Tries To Keep Things Competitive


We’ve seen cases over the last ten years of Billionaires buying football clubs in England, and spending unlimited amounts of money on players, and there have been no restrictions on this at all, and clubs like Chelsea, as just one example, have spent over £1B on players since Romain Abramovich bought Chelsea in 2003 – what’s wrong with this picture?



There’s plenty wrong with it, and it’s simply an unsustainable business model, and the outlandish spending has caused other clubs to spend money they just didn’t have in order to try to keep up, and those clubs have gone into bankruptcy – or administration as it’s referred to in England.

And Manchester city have done much the same thing as Chelsea since 2008, culminating in the club winning the Premier League last season for the first time since 1968. Do you think the big money helped?

This is all very well and good for those clubs, but it’s a situation which cannot last, and UEFA President Michel Platini is already introducing Financial Fair Play (FFP) rules to limit the spending of each club to what their revenue is – so in effect they are being forced to balance their books, and the rules are being phased in over the next several years.

And we have seen some top clubs like Portsmouth and Glasgow Rangers go into bankruptcy because of gross mismanagement of their finances, and they have paid the penalty for spending money they just didn’t have.

In England there’s already a salary or wage cap – and the top leagues in both the Aviva Premiership in Rugby Union, and the Super League in Rugby League have already implemented wage caps.

America has long had to deal with big money in sports, and while things in the US are different to how sports are run in Britain – College Sports for example is a huge business – there are ways in which American Sports tries to keep things competitive so that a rich club – like the NY Yankees in baseball – cannot spend unlimited amounts of money to ensure success – like Chelsea and Manchester City have done recently.

Here are two main ways in which American sports ties to keep things competitive, and the third point is the way sports in America handles “transfers” – where players are exchanged between clubs.

  • There is generally a salary cap – and the amount is a percentage based on the total amount of revenue for the sport. It is very detailed and takes into consideration merchandise sales and ticket sales
    And there are two main reasons for the salary cap – to keep competition between the teams and to also get some control of the costs of each team.
    In Major League Baseball instead of a salary cap there’s a luxury tax, a scheme by which teams whose total payroll exceeds a certain figure (determined each year) are taxed on the excess amount. The tax is paid to the league, which then puts the money into its industry-growth fund
  • There is the college draft – where college players have completed their college playing days and can move into the top leagues. The way this is done is that the bottom professional teams in the league get the first college draft choice in a particular sport, the second bottom team gets the second draft choice, so in this way there is an attempt to even out the ability within the professional teams each year – in short the worst teams get the best players
  • There are no real transfers for dollar amounts but clubs can trade players and draft choices – so in a way this is like the transfer system in Europe – and as we have seen above teams get draft choices every year.
    American Football has compensation when a player leaves based on their estimated value, and if a top player leaves through free agency, their former club can put a claim in and get draft picks from the player’s new team.
    They also can franchise tag a top player to keep him from leaving. What this means is they can do this for one player a year, and that player has to remain with the team, but he is paid the average of the top five wages at his position for that year.

And American sports also have player unions, but all is not well at the moment in the NHL, where there is no agreement on wages between the owners and the players’ union, and there is a lockout in progress, and fans have to hope things are agreed soon, and they don’t have to go through another year like back in 2004, when the entire season was lost because of a dispute.

Ad NHL referees have just returned to American football after their stand-ins produced some terrible calls that cost teams some games, but the owners finally agreed to give the referees a wage rise and better pension benefits – and they are back refereeing again.

It’s difficult to justify these types of disputes with rich players involved, when economic times are so difficult and ordinary people are struggling big time – but it seems the owners are making big money and the players want to see more of it.

We have to hope that the new FFP rules being introduced by Michel Platini will get the job done, but notice that the rules still favor the big clubs, because clubs can spend what they bring in revenue, and of course clubs that play in Europe, and especially in the Champions League have much bigger revenues than other clubs like Newcastle United – as one example. 🙁

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148 comments so far

  • rainrix

    Oct 1, 2012 at 11:43 AM

    Comment #1

    Nice article ed. Was never really sure how american sports worked in regard to players. Although not many of these would be applicable to football.

    I do like that draft idea, If there was some kind of unaffiliated central youth system that teams could take players out of. That could help our national set up, although its never going to happen so mehh 😉

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  • beefman13

    Oct 1, 2012 at 11:46 AM

    Comment #2

    Yes Ed it make for a fairer system and the reason you see different super bowl winners, things will change in time and other better run clubs will get their share of the limelight including us.

    man city and chelsea have been run in a way that many a manager could havetaken them to glory even some on this blog ha ha, but to be fair if we had a billion to spend we would not be far away would we.

    The arsenal way and our way for me is much more gratifying and the way virtually all clubs will have to go in future.

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  • GeordieDan

    Oct 1, 2012 at 12:01 PM

    Comment #3

    I’d love to see this kind of thing implemented but the MASSIVE reason it almost certainly won’t is that in the States they throw money at college sports and basically the best athletes/sportspersons get paid to go through college playing for their team whilst trying to also pick up an academic qualification.

    In this country the overwhelming amount of new, top players coming through have been trained and paid for directly by the club and usually for years thorugh academies etc.

    They won’t just give up their best young assets.

    You just don’t get a top premiership quality hopeful being financed by Cambridge university whilst playing for Cambridge University FC for example.

    Unless something fundamental changes about the ENTIRE structure of our game then unfortunately this can’t and won’t happen.

    Nice idea though Ed. 🙂

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  • Tsunki

    Oct 1, 2012 at 12:05 PM

    Comment #4

    Evidently we are new to the game of making big money, only really seeing it come into the game after the days of the first million pound signing. We have some catching up to do on the American sports but maybe our being behind them means we can learn from their mistakes before committing them ourselves. I think this is where Platini and Co are driving, its baby steps all right but anything that levels the field in each division is a good thing, perhaps we will see the days when players played with heart and for their club, without being spoiled journeymen and mercenaries.

    I like the luxury tax idea – perhaps that can be channeled into grass roots footy or bolster struggling clubs with low or no-interest loans. Darlo was a sad case in recent times, not well supported but with a bit of decent investment and advertising could have stayed afloat.

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  • Kebabacus

    Oct 1, 2012 at 12:27 PM

    Comment #5

    Great article Ed. More stuff about life in America and your experiences supporting the Toon and growing up in Newcastle please! It makes a nice change from transfer gossip.

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  • OTP

    Oct 1, 2012 at 12:32 PM

    Comment #6

    Good post. I think the owners should choose to run the clubs as they please tbh. Sounds ridiculous but the point is to be the best teams and you have to spend money to be the best. Although people should read the book “Moneyball” great book about paying out tiny amounts for the best players and getting the best out of them, even if it is about baseball. I do like the idea of having a draft though.

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  • Tsunki

    Oct 1, 2012 at 12:55 PM

    Comment #7

    OTP – Citeh and Chelski are two examples of running a club how they please. Its a hyperbolic illustration I know but imagine you go to the only supermarket in the area to find that your rich neighbour has bought all the bread, milk, eggs . . . he doesn’t even use much of the stuff he’s bought, but keeps most of it until its no good to anyone else. Fair enough in the case of clubs like Man U who have a legacy of performance built up over the years, but even then, when buisness completely overpowers sport, its no longer sport, its just a rich mans’ bragging rights.

    I dont know about anyone else, but if NUFC was bought by a fabulously wealthy owner who bought us cups and titles, it would be a hollow feeling celebrating a spoilt rich mans victory over his rivals in the billionaires club.

    The problem is that football the sport is being confused with football the entertainment to the degree that the sport side is the secondary consideration.

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  • Tsunki

    Oct 1, 2012 at 1:20 PM

    Comment #8

    Well congratulations ED – a higher-thinking article has certainly thinned the blog out!

    Either you’re going to have to post an Obertan article or wait for the subject to change into abusive warfare again.

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  • Ibizatoon - Back by popular demand

    Oct 1, 2012 at 1:21 PM

    Comment #9

    Just looking in and wanted to say…

    Tsunki @7….Great post and I agree 100%. Yes, we’d be happy with success (even if bought), but it would be hollow and short lived. Spending money is not really a club accomplishment. My hope is that slowly but surely we see a sustainable system that all clubs live within or otherwise the only way to be successful will be to spend obscene amounts of money. Which is just the billionaires club league, nothing really to do with football and pride.

    As you were people, as you were.

    P.S. Careful, with posts like that last one, people might start thinking you form actual opinions and think things through.

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  • Ibizatoon - Back by popular demand

    Oct 1, 2012 at 1:23 PM

    Comment #10

    Ok, not the last post you made – comment #7! 🙂

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  • Mister Tuff

    Oct 1, 2012 at 1:31 PM

    Comment #11

    Great idea @#7 having a lower thinking article will allow the rest of us to join in.

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  • Mister Tuff

    Oct 1, 2012 at 1:33 PM

    Comment #12

    Error @#11 -should read …Great idea @#8……

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  • rainrix

    Oct 1, 2012 at 1:35 PM

    Comment #13

    Tsunki… Its about time higher thinking made an appearance on the blog :). Next up Morality: Nature or Nurture? 😉

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  • peaco1980

    Oct 1, 2012 at 1:42 PM

    Comment #14

    Unlike the American Pro leagues, we have a system that rewards excellence and punishes failure; promotion and relegation respectively. How would this work in our system – Eden Hazard to Aldershot?? If promotion and relegation were ended, what would lower league clubs be playing for?

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  • jesperfuglsang

    Oct 1, 2012 at 1:45 PM

    Comment #15

    Just wanted to see hiw y’all doing 😉

    …and to say:

    Ibiza @9 Great spoted that post @7 by Tsunki was indeed well written 😉 lol (sorry couldn’t help myself)

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  • Tsunki

    Oct 1, 2012 at 1:46 PM

    Comment #16

    Mister Tuff – ha ha now now I was only kidding 🙂

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  • Tsunki

    Oct 1, 2012 at 1:48 PM

    Comment #17

    Ohh pleeeease stop with all the raves you’ll make me think I am relevant if you keep on like this. Someone shoot me down in flames or hurl abuse about how I know nothing about anything, I am feeling exposed here!

    I know – We should swap Ba plus £20m for Andy Carroll…..

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  • toonarmydownsouth

    Oct 1, 2012 at 1:48 PM

    Comment #18

    Tsunki
    Very philosophical lad!
    But of course your right it would be a very shallow victory and just go to show the only way to win anything would be to buy it and all the clubs that try there hardest to build a squad steeped in tradition and history will be a thing of the past
    Not to mention the huge knock on effect it has trough the leagues you dont necessarily have to look at clubs like citeh and chelski but also your west hams qprs and blackburns, how many millions did they spend just to be able to get back into top flight football?, wheres the sportsmanship and just in buying the league? How are clubs who are always in and around the top of the championship like your cardiffs, crystal palace and blackpools ever supposed to compete at a level higher than championship over achievers?
    And what happens to the west hams and qprs when the realisation dawns that they simply cant afford to buy a new starting 11 every window and continue to have huge earners whilst proping up the table?

    The playing field of football needs leveling and the F.A and FIFA should never if let it get to the state its in today

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  • Ibizatoon - Back by popular demand

    Oct 1, 2012 at 1:49 PM

    Comment #19

    Jesper…It would be rude of me not to recognise the fact you commented the good job by me of recognising Tsunki’s good post. Cor, this may become hard work.

    Do I get any credit for noting this might become hard to keep up?

    Good….lower thinking comments are back in play. Thank god, normal service can resume!

    Peaco….I don’t think you can take a like for like system and apply if to our football leagues. Promotion / relegation are important factors in our leagues and need to remain. There should be discussion about other aspects though which could be integrated and ultimately improve the current system.

    Not 100% on the inner workings of drafts and no idea how we would incorporate it.

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  • Tsunki

    Oct 1, 2012 at 1:50 PM

    Comment #20

    rainrix its a bit late mate all the higher thinkers baled years ago and left us lot. Although you are still here….

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  • Ibizatoon - Back by popular demand

    Oct 1, 2012 at 1:51 PM

    Comment #21

    Tsunki @ 17…Fool. Get back on to Fifa13…you muppet.

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  • tarie4

    Oct 1, 2012 at 1:57 PM

    Comment #22

    lads who has FIFA on the psp vita??

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  • Ian Toon

    Oct 1, 2012 at 1:58 PM

    Comment #23

    Interesting read. Implications, Rule changes re UEFA fair play will require the support of 14 out of 20 clubs. Manu , Arsenal and Liverpool were the clubs most in favour of adoption. Amusingly The Mackems focused on a mechanism to control wage inflation. Seems to me any serious enforcement is suspect and open to abuse . As. Benefactors would be able to fund investment in academies and channel funds elsewhere . It could well be like E U and just not be audited. At home. We have Man City covering an earnings deficit through £ 400 million sponsorship deal with Abu Dhabi.
    Something that puzzles me is that Fulham were the only club to
    appose any changes.

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  • jesperfuglsang

    Oct 1, 2012 at 2:00 PM

    Comment #24

    Again very well spoted of post 21 😉 I totally agree about the weak content of post 17!

    …do take yourself together! 😉 lol

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  • WWYCD

    Oct 1, 2012 at 2:05 PM

    Comment #25

    …It safe to leave my bunker? This is a bit of a topic isn’t it. I doubt this will be put into affect in the PL until similar is put into affect across Europe

    Also doubt Fifa would back any real changes tbh. If this did happen though would the transfers end? Not sure whether I have misread that

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  • Mister Tuff

    Oct 1, 2012 at 2:05 PM

    Comment #26

    Tsunki @#8 and #16.
    Damn and blast — you’ve pulled the rug from under my feet -I was going to try to develop your idea @#8 further by suggesting that only specific “classes” could post on subjects within their realm of knowledge. So the Bougeoisie, intellectuals and those of higher thinking could only post on certain topics and the rest of us -the proletariat and plebeians would be restricted to other topics such as Obertan bashing – damn.

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  • Tsunki

    Oct 1, 2012 at 2:05 PM

    Comment #27

    tads and peco hit this square on and its he most relevant area of the problem imo. Relegation and promotion is part of sport. Getting a rich buyer to assist a club that is perennially floundering is not necessarily a bad thing. After all, if my rich great uncle Roman fell off his yacht and left me his fortune, could I resist not buying into my beloved club? Would I be able to uphold my lofty standards of fair play when I had £300m burning a hole in my pocket to go out and buy a team of world stars? Personally I think I would, but thats me, I would rather give it all away to good projects than waste it on comparatively meaningless trophies. (That’s why people like me dont get rich I suppose 🙂 ) Thats why some kind of fair play ruling is needed, to limit the influence of sheer loss-led pursuits in the game.

    Maybe if it was allowed for a rich guy to spend what he likes, but has to donate like-for-like the clubs business losses to lower league academies who could make their own talent or sell at a premium to bigger buying clubs. That way they could build up their on infrastructure and make competing and promotion easier. Its kind of a work in progress thought. Needs polishing a bit.

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  • Ian Toon

    Oct 1, 2012 at 2:05 PM

    Comment #28

    On Reading we were lucky to get anything from game. It confirmed my long held stated view that Cabaye is the conduit and thereby our most influential player. In his absence I thought it was a mistake to overly compensate in DM. This was not a game to blood Bigi. Aside from Ferguson who has a nice composure under pressure the rest only really merit cameo rolls. Hopefully Cabaye will be back for ManU.
    Ibiza
    Jesper – Hope your in survival mode.

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  • mattyNUFC

    Oct 1, 2012 at 2:06 PM

    Comment #29

    unrelated but came across this on a messi article from some poster named ‘why emile heskey owns messi’

    Heskey has never missed a penalty, Messi has
    Heskey has 61 caps for England, Messi has 0
    Heskey has scored 7 goals for England, Messi has 0
    Heskey has scored 100+ goals in the Premier League, Messi has never scored in it
    Heskey undoubtedly has a larger $@%! than Messi
    Heskey is black, Messi isn’t
    Heskey’s feet are size 15, Messi’s are a tiny size 10
    Emile’s shots go out for throw-ins, Messi’s don’t
    Heskey’s girl is sexier than Messi’s $@%!$.
    Heskey misses a lot because he doesn’t want to upset the goalkeepers feelings, Messi just scores all the time because he’s a @%!$
    Heskey has played in more World Cups than Messi
    Emile has played for more clubs than Messi, meaning he is more versatile
    Heskey has been bought for bigger transfers fee than Messi ever has.

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  • Ibizatoon - Back by popular demand

    Oct 1, 2012 at 2:07 PM

    Comment #30

    tarie…On ps3 – not sure how that ties in with psp vista – what is this witchcraft you speak of, am I really that far removed from general life here in Ibiza?

    Jesper….I’m thinking we need to be working on systems for the blog rather than football as a whole. Perhaps a panel of posters (from both a negative, optimistic and realist view) who can vote and praise / shame the others. Just need to work out a method to deal with split votes.

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  • mattyNUFC

    Oct 1, 2012 at 2:09 PM

    Comment #31

    …article was on soccernet, btw

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  • swisstone

    Oct 1, 2012 at 2:09 PM

    Comment #32

    We have a new sponsor. Stadium rename will follow possibly

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  • swisstone

    Oct 1, 2012 at 2:10 PM

    Comment #33

    We have a new sponsor.

    Stadium rename will follow possibly

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  • swisstone

    Oct 1, 2012 at 2:10 PM

    Comment #34

    We have a new sponsor.

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  • Tsunki

    Oct 1, 2012 at 2:11 PM

    Comment #35

    Ian @ 23 – it puzzles you that Al Fayed did something strange and off-beam? the man who put a statue of MJ outside the ground? 🙂

    Ian @ 28 – nice subject change there. I agree about Cabs. Simple but controversial suggestion, just gonna throw this one out there- would it have been terribly wrong to stick Amalfitano in there (dives for cover)

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  • Ian Toon

    Oct 1, 2012 at 2:12 PM

    Comment #36

    Pushy- good post earlier. Your wasting your time though to many thick skulls to penetrate. Our group regularly have brief chats with Pardew one of the Dad’s knows him. What he said was that the main problem was not getting the balance of the side right at key stages of the game. Thought he made more of Taylor’s absence than justified.
    Thought only Harper, Tiote and Ba + Ferguson when he came on played well. Harper doesn’t shout and command area like Elliot – if Krul is not back for ManU he should come under consideration.

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  • swisstone

    Oct 1, 2012 at 2:12 PM

    Comment #37

    We have a new sponsor. Stadium rename to follow??

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  • mattyNUFC

    Oct 1, 2012 at 2:13 PM

    Comment #38

    anybody think it’s Sports Direct?

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  • swisstone

    Oct 1, 2012 at 2:14 PM

    Comment #39

    Publishing issues apols for the reposts

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  • estechco

    Oct 1, 2012 at 2:14 PM

    Comment #40

    What a really strange way to announce this…

    http://www.newsnow.co.uk/A/601760110?-11058

    1 out of 10 for PR department – Should try harder?

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