Finances involved in a football club.

Just this footballing season, we have seen PSG, Malaga, Chelsea, Man City, and most recently Anzhi (from Russia), with the backing of tycoons, investing a lot of cash into their respective clubs. The amount if used in a humanitarian aspect, would save a lot of lives (that’s for some other day). On top of this, the significant level of scare that existed and still exists surrounding rapper P Diddy’s, sorry Diddy’s (having officially dropped the P) interest in Crystal Palace. The interest must have come from the word – Crystal, for those who understand the analogy. What’s happening here?

These wealthy individuals seem to acquire their favorite team at their will. As some of us would say, the decision probably came up as their kid’s, hooked up on PS3, would eventually mention something to their respective father’s with reference to the team they are playing and winning with. Hence, an interest is generated and the Sheikh’s/tycoons call on their financial advisors to steer up the real life buyout process. At one point a few years back, a few of us were contemplating creating a hedge fund, as it seemed like it was just that easy to do, in order to buy out a club like Swansea while they were slugging it out at the League one level.

The players do not make it easier either. Let’s be honest, there are lot of big name athletes out there who had switched clubs as soon as they realized the money involved. Not blaming them for that. We all know how money motivates footballers and people in general.

Then how can other clubs compete? As a person who sees football purely from an entertaining perspective, and wanting it to stay that way, I will be crossing the Atlantic, towards our Western athletes and organizations, to look for the right answer, which is:

Introducing a Salary cap.

Many top American leagues such as NBA, NHL, NFL and MLS (Major League Soccer) have introduced the concept of salary cap since the 1990’s. This basically prevents a team from luring highly paid players. The way it works is quite simple. The league sets a fixed amount that can be spent on players by each club in one given season, obviously after negotiations with their respective unions. This would eventually give other clubs a chance to equally compete in signing talented individuals. On a longer run, it would also promote loyalty of these players to the club.

Now, I know that it’s not as easy as it sounds to just wake up one day and implement this concept, as there are number of factors that are not considered here. The European nations would have to go through multitude of issues such as individual tax systems, multiple currencies and most annoying of all, an egotistical national pride before they can think of introducing anything close to a salary cap.

But eventually, something has to be done as the issue is spiraling beyond control, each year. Are there any other alternatives?

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