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Salary cap fits Serie B

Published: Thursday 27 April 2006, 18.37CET
The Italian football league has moved to ease the problem of mounting club debt by introducing a salary cap in Serie B. Paolo Menicucci reports on the new financial reality of Italy's second division.
by Paolo Menicucci
from Milan
Published: Thursday 27 April 2006, 18.37CET

Salary cap fits Serie B

The Italian football league has moved to ease the problem of mounting club debt by introducing a salary cap in Serie B. Paolo Menicucci reports on the new financial reality of Italy's second division.

The Italian football league (Lega Calcio) has taken an important step to ease the problem of mounting debt among clubs by introducing a salary-capping system in Serie B starting from next season. Only 70 per cent of the revenue clubs earn from ticket sales, sponsorship and television rights will be permitted to be used on player salaries. Any club that exceeds that limit will lose the subsidy they currently receive from the Lega Calcio - a guaranteed minimum of €95m shared amongst all the clubs over the next three seasons - a contribution that is vital for their economic viability. The salary cap will decrease to 65 per cent of revenue the following season and then to 60 per cent the year after that.

Financial crisis
Spiralling wage bills have resulted in a financial crisis in Italian football. In 2005 players' salaries accounted for 85 per cent of club revenues. The situation has improved slightly, but nearly all Serie A and B clubs are still in the red, and the game's authorities have urgently been seeking a solution. The salary cap is part of a larger reform package aimed at reducing costs. Clubs relegated from Serie B (but not those demoted for sporting fraud or other juridical reasons) will receive a 'paracadute' - parachute payment - of €500,000 for three seasons to soften the blow. From next season they will also be restricted to a squad of 22 players, reducing to 21 then 20 by 2008/09. "But every club will also be able to count on four additional players from their youth systems and an unlimited number of under-21 players," said Lega Calcio president and AC Milan vice-president Adriano Galliani.

'Important step'
The new rules have been welcomed by the great majority of Serie B sides. "It's a very important step, maybe crucial, to move the economic management of Serie B clubs in the right direction," Vicenza Calcio general director Sergio Gasparin said. "Many clubs have faced an extremely difficult situation in recent years with heavy costs and low revenues." Last season four Serie B sides (AC Perugia, Salernitana Sport, Torino Calcio and Venezia Calcio) faced bankruptcy. "That is the clear evidence of what is really happening in Serie B," Gasparin said. "Every club can respect these new parameters, especially if they dedicate more resources to their youth systems. We won't have any problems in this sense as we already have several players from our youth system in the squad and other players who are 21."

'More strength'
Torino coach Giovanni De Biasi believes the ruling will increase the importance of player development in Serie B. "We opted for signing experienced players this season," he said. "We hope to be promoted but the new rule would certainly give more strength to the youth systems of every Serie B side." Lega Calcio vice-president and US Città di Palermo president Maurizio Zamparini agrees. "I'm particularly in favour of the rule about having four players from the youth system in the squads. Youth systems are the most important resource for every club and should be defended and improved whenever possible."

'Sudden revolution'
The Italian Footballers Association (AIC), however, is against the changes. Sergio Campana, AIC president since 1968, said: "The salary cap is not the solution because it opens the way to bad practise such as unwritten contracts or other ways to escape the rule, such as image contracts for players. Not even the rule about the 22-man squad is a good solution. Serie B sides currently have 24 or 25 players on average. What shall we do with the others? Shall we send them home even if they have existing contracts? Reducing costs is definitely the right way to solve the crisis in Italian football, but [it should be done] with a long-term plan, not with a sudden revolution like they are trying to do now."

Future plans
A salary cap has already been introduced with success in the third and fourth divisions in England, and is one of the areas being studied as part of the Independent European Football Review. UEFA implemented a study into salary caps at the end of the 1990s, but concluded they were not feasible at that time. Instead, the UEFA Club Licensing System was introduced as a first step towards helping clubs runs themselves more efficiently. The National Football League in the United States uses a salary capping system, but in general salary caps have only really been applied in sports where there is no true global player market. Top flight clubs in Italy will be looking on with interest as the Serie B experiment unfolds, but Galliani insists there are no plans to use it in Serie A. "We are not discussing the possibility of introducing similar rules in Serie A at the moment," he said. "But you never know what might happen in the future."

Last updated: 27/04/06 18.59CET

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