Does Soccer have a Salary Cap?


Men and women around the world who play professional soccer work hard to be the best they can, 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?

Major League Soccer(MLS), has a salary cap. Each year a salary budget is set that each team must stick to. In most other professional soccer leagues around the world, there is no salary cap. In those leagues, soccer clubs are free to financially compensate their players with no restrictions.

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.

Does soccer have a salary cap? - header image

What a salary cap is and where it’s used

Around the world, different soccer leagues take different views on whether they wish to use a salary cap.

The only two major professional leagues that use a salary cap are Major League Soccer in the United States and the A-League in Australia(The Chinese Super League is also considering bringing one in the next few years).

The main aim of a salary cap is to restrict the amount of money that any team in that league can spend on the salaries of their players.

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. If any team spends above the allocated amount then they are likely to receive a fine or some other relevant punishment.

There are two main types of salary cap –

  1. A hard salary cap
  2. 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 uses a soft salary cap. There is a salary budget given to each team at the beginning of each season to spend on salaries. But as an exception to this rule, they also have a “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 years 2016 – 2019. This should give you an idea of the numbers involved.

Salary Cap limits for the MLS

YearSalary BudgetNon-designated player maximum
2020$4,900,000$612,500
2019$4,240,000$530,000
2018$4,035,000$504,375
2017$3,845,000$480,625
2016$3,660,000$457,500
MLS Salary Cap Limits [Source]

Positives of a salary cap

two pieces of paper - one says good one says bad

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 an English soccer league the soccer team Bury FC, a club which had been in existence since 1885, went out of business in a large part due to the fact that their spending on player’s 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 be thinking “Having a salary cap makes a lot of sense. Why don’t all leagues have one?”

Competitiveness on a global scale is another negative factor to consider as well.

With so few leagues worldwide operating with a salary cap, there is a real struggle for teams who have a salary cap to attract the best players.

If a player can go to another country and earn a much higher salary then they often will if the opportunity comes up(Although this clearly isn’t the only factor in the decision a player makes 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 competitions.

It also promotes short term player contracts and a high level of player turnover.

This is because when a team only has a limited budget to spend every year they can’t afford to be wasting 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 3 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 to. In a team that isn’t operating under a salary cap, they can just sign up another player to their team and not worry about the extra spending.

An argument against it from a player’s point of view is that prevents the player’s 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.

Related Questions

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 where it has been considered but the decision has always been not to introduce one.

*Check out the next post – Why does Soccer Limit Subs? *

Or find out if a college soccer player gets paid in this article here.

Ben

Hi! My name's Ben. I've played, watched, read about, and enjoyed soccer throughout my life. I really enjoy finding out more about the game I love and sharing it with you all. Sign up to the yoursoccerhome.com newsletter here or check out more about me here - Ben Clayfield

Recent Posts