Grappling with rising player compensation and competitive imbalance, the Premier League is looking at the possibility of implementing a rather American concept: a team salary cap.

The league is already subject to UEFA Financial Fair Play Regulations designed to ensure financial solvency for clubs, but Premier League officials are looking at potentially going a step further with a hard cap.

“As far as competitive balance [is concerned], people need to be bold,” said Crystal Palace chairman Steve Parish. “I think there is change afoot. UEFA squad-cost caps are one idea. Maybe something that is a bit more rigid than that, with a hard cap at the top.

“There are really positive conversations going on about it. We also have to be very careful because there are also unintended consequences,” he added. 

With the notable exception of Spain’s La Liga, much of European soccer currently operates without a salary cap, making these latest comments all the more important. 

The Haves And Have-Nots

A key impetus behind the Premier League efforts is the marked disparity in team payrolls. Manchester United’s $249.8 million payroll this season is nine times greater than Luton Town’s $27.8 million — a far bigger discrepancy than is seen in any major U.S. sport.

The Premier League table has also been fairly static at the top in recent years, with top-spending clubs such as Manchester United, Manchester City, Liverpool, and Arsenal all regularly occupying the lead spots.

Italy’s Serie A remains mired in a host of ownership and facility issues but has nevertheless sealed a major piece of its media future with a set of domestic media rights deals worth $4.8 billion.

The country’s top level of pro soccer has completed a five-year pact with DAZN and Comcast-owned Sky Italia, giving the league a crucial financial lifeline amid significant change across international soccer.

DAZN is said to have offered at least $741 million per year for the rights, airing seven matches per week, while Sky Italia will pay another $212 million annually through the 2028-29 season. 

The agreements, which approach Serie A’s initial goal of $1 billion per year for the rights, reportedly received support from 17 of its 20 clubs in the league. There’s also a possible $1.06 billion bonus for Serie A if certain subscriber targets are met.

The rights deals provide some stability to a key piece of Serie A revenue as it faces a growing financial gap between itself and other top European leagues, as well as the upstart Saudi Pro League. 

Total revenue was just $2.62 billion for the 2021-22 season, slightly more than a third of the comparable figure for England’s Premier League, and projections for the current season are similar. 

On a franchise level, Juventus, the Italian league’s winningest club ever, is dealing with its own revenue issues and a Financial Fair Play penalty, while AC Milan and Inter Milan abandoned plans for a shared $1.3 billion stadium.

Another sign of Serie A’s improving financial health: AC Milan has reported its first club profits since 2006.

On the heels of a critical set of the league’s new domestic media rights agreements, the club said it posted a $6.49 million profit for the year ended June 30 on club-record revenue of $430.5 million — up by 36% from a year ago. 

Fueling the increases were a series of on- and off-field successes, including reaching the 2023 UEFA Champions League semifinals and recording meaningful gains in core revenue streams such as ticket sales, media rights, and sponsorships.

“This marks an important step in our club’s history with a return to net profit after 17 years,” said Paolo Scaroni, AC Milan chairman. “We are heading towards a new, important chapter of evolution in the development of our club.”

That chapter includes new ownership led by U.S.-based private equity firm RedBird Capital, which purchased the club last year in a $1.3 billion deal also involving the New York Yankees and LeBron James, plus initial steps toward a potential stadium development in the Milan suburb of San Donato. 

To that end, the latest financial report includes an investment of $42.6 million “aimed at resolutely advancing the project for a new stadium.”

“Combining sports performance, global competitiveness, and financial sustainability in football, when on a virtuous path, is possible,” Scaroni said. 

AC Milan’s biggest rivals, Inter Milan and Juventus, both continue to lose money.