Uefa have denied that their plans for a fair play tax are the latest shot in a campaign to undermine the English Premiership. Europe’s richest football clubs, many of them in England, would have to pay a luxury tax on their star players that would be passed on to poorer clubs under plans being considered by Uefa. The tax idea is an attempt to redistribute wealth in a sport Uefa believes is heavily dominated by powerful teams such as Manchester United and Real Madrid.
Uefa have denied that their plans for a fair play tax are the latest shot in a campaign to undermine the English Premiership. Europe’s richest football clubs, many of them in England, would have to pay a luxury tax on their star players that would be passed on to poorer clubs under plans being considered by Uefa. The tax idea is an attempt to redistribute wealth in a sport Uefa believes is heavily dominated by powerful teams such as Manchester United and Real Madrid. Uefa president Michel Platini believes that some clubs have become so indebted that they face bankruptcy, while the dominance of rich clubs is creating an unhealthy competitive imbalance in European leagues. Uefa is concerned by the way that Olympique Lyonnais have dominated France’s Ligue 1 and Porto in the case of Portugal’s Liga. Half a dozen Spanish clubs are in difficulty, including Valencia. What is often forgotten is that Manchester United have not always been invincible and the club was built up again by good management. The money followed success rather than the other way round.
Uefa have been looking to American sports for examples. Officials went on a fact-finding trip to the US earlier this month and discussed the idea of a luxury tax with officials from Major League Baseball, which sets salary levels for teams and taxes them on the amounts they spend above that. The pool of taxed income is then redistributed to poorer teams. Uefa has also looked at rules used in American football, basketball and baseball that limit squad sizes. Uefa spokesman William Gaillard said that many cost-restraint ideas, such as salary caps [often evaded], had flaws, but the luxury tax and squad limits were ‘more promising areas’. He admitted, ‘There is no simple solution. All [the plans] have drawnacks, some worse than others. The salary caps look like they are very difficult to manage in a system where we have European competitions like the Champions League interfacing with national leagues and competitions. It would be frighteningly difficult to administer.’ The fact is that with any of these proposals, the devil is in the detail.
The proposal has considerable interest and I did a long interview for the Wall Street Journal. Whether they will use any of it remains to be seen, but their reporter certainly asked more probing and intelligent questions than I am used to. One of her questions was whether such a scheme would be compatible with European Union law. I am not an EU lawyer, but my assumption was that it would depend on whether the scheme could be shown to interfere with freedom of movement of labour within the EU. Probably the European authorities have given informal clearance to the proposals, but that does not mean that they could not be challenged in court. The reporter also asked me whether the present arrangements undermined the interest in the Premiership because it was less competitive. There is undoubtedly something in this, but supporters keep coming to the matches and, more important from a financial point of view, watching on television. When my team was in the Premiership I enjoyed seeing some of the best players in the world for myself. Whatever Uefa says, part of the agenda here is based on resentment of the Premiership’s success.