An investigation into the implications that a salary cap, as implemented in Major League Soccer (MLS), would have on the English Premier League (EPL)

Abstract

This paper aimed to investigate the potential impacts that implementing a salary cap, as currently used in the MLS, would have on a league where financial spending is excessive, the EPL. The research sought to explore areas which would be affected by salary limitations including labour movement of players, salary dispersion, structural differences and contracts. A literature review was conducted by examining existing secondary research allowing the reader to gain an understanding of the literature that is currently available on the topic prior to this research being carried out. Eight semi-structured interviews were carried out with three different groups of people; four full-time professional footballers, two managers who have managed a full-time professional football club, one General Manager of an MLS club and one professional football coach operating in the USA. The combined perspectives of these three groups of people allowed the researcher to gain a well-rounded platform of information, allowing the research questions to be answered. The findings from this research show that high levels of labour movement are present in professional football, the main factors impacting this being; players migrating to financially strong markets, demonstrating a desire to play in the highest league possible and low performance levels or failures. Pay structures of teams were found to resemble a performance related pay approach, where age and performance levels are the main factors influencing a players level of pay. No significant negative effects were discovered relating to in-equal salary dispersion within UK teams, and players demonstrated negative responses towards equal salary dispersion stating it would diminish the motivational factors that experienced players provide the younger generations of players. League structures of the MLS and elite European leagues were compared, with findings showing that American players have a history of playing in Europe to seek better financial opportunities due to the salary cap in the MLS. The MLS uses a designated player rule to attempt to combat the negative effects that a salary cap has on the influx of superstar talent to the league. The designated player rule was found to originally be a marketing tool for MLS clubs, but has since transitioned into a performance enhancing tool. In the UK contracts were short in nature due to financial constraints of the teams that the players represent. Limited information was available about MLS contracts due to the single-entity structure the league operates, which allows the league to control and influence contract negotiations.