The financial crisis in the English Premier League: is a salary cap the answer?

Abstract

The English football league is the oldest in the world and its top division, the English Premier League, arguably the most prestigious. It is, however, presently facing a financial crisis due to the high level of debt owed by nearly all the clubs. The most serious has been Portsmouth which nearly faced a winding up order mid-season that would have prevented it from completing its fixtures for the 2009/10 season. While there have been suggestions from UEFA, amongst others, that a salary cap may be needed for English and European football, it is likely that, at present, it would not be accepted by the players who could take strike action, or alternatively legal action in which they may well be successful. However, UEFA's proposed financial fair play rules that will prevent clubs which are in debt from competing in the European competitions may create an indirect cap on salaries by ensuring they are linked to club revenue.