Men and women around the world who play professional soccer work hard to be the best they can be, and it’s only fair that the salary they receive reflects this. But it can often seem like some players receive a huge amount of money every week.
Is there any limit to this? Does soccer have a salary cap?
Only three professional soccer leagues use a salary cap:
- Major League Soccer (MLS) in the United States
- The A-League in Australia
- and the Chinese Super League
All other professional soccer leagues operate without a salary cap.
Despite the fact that many sports use some sort of salary cap to limit how much players are paid, in soccer, you rarely see this happening.
As you read on, you will see how the salary cap works in a league where it is used, and you will begin to understand why some people consider this a good thing while others may only see it as a negative.
What Is a Salary Cap, and Where Is It Used?
Around the world, different soccer leagues take different views on whether they wish to use a salary cap.
Major League Soccer(MLS) has a salary cap. Each year a salary budget is set that each team must stick to.
There is no salary cap in most other professional soccer leagues around the world. In those leagues, soccer clubs are free to financially compensate their players with no restrictions.
An example of a league with no salary cap is the EPL.
The English Premier League (EPL) does not have a salary cap. Each team is permitted to remunerate their players without any financial limitations.
The main aim of a salary cap is to restrict the amount of money that any team in that league can spend on their players’ salaries.
An amount is chosen by the relevant governing body each year, and then each team is expected to stick to that amount. Sharing it between all their players.
Any team spending above the allocated amount will likely receive a fine or some other relevant punishment.
There are two main types of salary caps:
- A hard salary cap
- A soft salary cap
A hard salary cap is a specific amount of money that a club is allowed to spend that cannot be exceeded for any reason at all.
A soft salary cap is when there is a specific amount of money that a club is allowed to spend, but there are some exceptions to this rule, such as the ability to spend over the cap in specific circumstances.
An Example of How the Salary Cap Works in Major League Soccer(MLS)
Major League Soccer(MLS) uses a soft salary cap.
A salary budget is given to each team at the beginning of each season to spend on salaries.
But as an exception to this rule, they also have the “Designated Player Rule.” This rule allows each team to field up to 3 designated players who are not limited by the salary cap.
There is also a maximum amount that is allowed to be spent on each non-designated player for the duration of a season as well.
The amounts change each year, but the table below will show what the amounts were for the years 2018 – 2021.
This should give you an idea of the numbers involved.
Salary Cap limits for the MLS
|Year||Salary Budget||Non-designated player maximum|
Positives of Using a Salary Cap
So, why would a salary cap be imposed on a league or team? What would be the benefit?
One of the main benefits and aims of having a salary cap is to keep a competitive balance between all the teams.
By restricting the amount any one team can spend on player salaries, you reduce the opportunity for one team to dominate the competition because they have more money to spend than any other team.
Let’s think about this for a second.
If one team had access to far more money than any other team they were competing against, they could use that money to attract all the best player’s in the league to play for them, and then theoretically, the team with all the best players should be better than all the others and dominate the competition every year.
The English Premier League is by far the richest soccer league in the world and has no salary cap.
Since it began in 1992, it has been dominated by those few teams who have more money to spend than anyone else.
It’s incredibly hard (though not impossible) for any of the less wealthy teams to compete, as the richer teams can offer higher salaries and attract better players because of this.
Compare this to the leagues that have a salary cap.
It is quite common in those leagues for a variety of different teams to be competing for the league title.
Another benefit of having a salary cap is that it aims to prevent a soccer team’s spending from getting out of control.
Only recently, in English soccer, the soccer team Bury FC, a club that had existed since 1885, went out of business largely because their spending on players’ salaries was out of control, and they no longer had the money they needed to continue.
As a team tries to compete with the other teams around them, it can be tempting to spend more money than they can afford to convince the best players to play for them.
Without a strict overview and control of this spending, it can quickly cause a lot of problems for a badly managed soccer club.
Negatives of Having a Salary Cap
After reading the last section, you may think, “Having a salary cap makes a lot of sense. Why don’t all leagues have one?”
Competitiveness on a global scale is an important negative factor to consider.
With so few leagues worldwide operating with a salary cap, there is a real struggle for teams with a salary cap to attract the best players.
If a player can go to another country and earn a much higher salary, they often will if the opportunity comes up (Although this clearly isn’t the only factor in a player’s decision when deciding where to play, it does have a large influence).
This potentially has a negative influence on the quality of the league and can be a significant disadvantage in any inter-league competition.
It also promotes short-term player contracts and a high level of player turnover.
When a team has only a limited budget to spend every year, they can’t afford to waste any of it.
If they decide to bring in a new player, they don’t want to take the risk of offering them a 3-year contract because if that player doesn’t perform well from day one, then the team is stuck for the next three years using a portion of their allocated salary money on a player who is not adding any value to the team.
They would rather offer a 1-year contract each year and have the option to let the player go if they want.
A team that isn’t operating under a salary cap can just sign up another player to their team and not worry about the extra spending.
An argument against a salary cap from a player’s point of view is that it prevents the players from sharing in the potential profits of the team they are playing for.
If a soccer club is doing really well financially and regularly increasing its profits, a player may feel entitled to get a cut of that money.
After all, they are the ones actually playing in the games.
But operating under a salary cap means there is no scope to earn anything more than the maximum permitted under the salary cap.
Are salary caps legal? A salary cap is legal and can be applied to any professional sports league if the appropriate governing body decides to introduce one. The effects of a salary cap can be both positive and negative.
Does European soccer have a salary cap? There is no salary cap in any of the professional leagues in Europe. There have been times when it has been considered, but the decision has always been not to introduce one.
If you’re interested in how soccer players’ salaries compare to football players’ salaries, check out my article – Are Soccer Players Paid More than Football Players?
Or, if you’re more interested in basketball, check out my article – Are Soccer Players Paid More than Basketball Players?
*Check out the next post – Why does Soccer Limit Subs? *
Or find out if a college soccer player gets paid in this article here.