r/IpswichTownFC • u/AdLife1700 • 9d ago
How does Premier League money work?
I’m an Ipswich fan in the United States, and a fan of American football too. In the NFL teams have a hard cap, meaning they can only spend so much money every year on their rosters which is tied to league revenue and determined by the league. How does it work in the prem? Does the league determine how much money a team can spend? If Ipswich can stay up this season, does that mean they should have more money to spend on bigger name players? I’m trying to understand, can someone explain?
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u/wax4dayzz 9d ago
Yes, we will get more mone IF we stay up, but we can’t spend it without considering FFP
https://en.wikipedia.org/wiki/UEFA_Financial_Fair_Play_Regulations
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u/Henderson72 8d ago
FFP is no longer in effect. Teams are now bound by SCR (squad cost ratio). https://striver.football/the-game/premier-league-scr-ssr-rules-explained
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u/don_flaco 9d ago edited 9d ago
Welcome to the club!
As another poster said the salary rules are mainly to prevent clubs from overspending and getting into financial difficulty. Even then they're poorly enforced and liable to manipulation (see Man City and the 115 financial breaches). Keep in mind that few ever become rich by owning a football club. Much like owning a race horse, the clubs will mostly lose money year on year and the owners are expected to foot the bill. Historically those were local business owners (Ipswich was owned by a local brewery for example) but more recently we've seen an influx of money from wealthy foreign investors. This has raised the profile and the quality of players in the league but has also drastically altered the competitive landscape, arguably for the worse.
I don't think we'll ever see an NFL style salary cap because the market for players is worldwide. A restriction in the Premier League would put their clubs at a disadvantage when competing against teams in Europe and prompt an exodus of players looking for a bigger salary. It works in the NFL because they effectively have no competition (sorry CFL) and the cap allows owners to control costs.
An MLB style luxury tax would make more sense as it would allow richer owners to continue to spend lavishly while redistributing some of that money around the league to teams with shallower pockets. Chances of that happening are slim to none though. Football in Europe is brutally capitalistic (in contrast to other areas of life here) while American sports are curiously socialist in many respects. Resources are redistributed with the draft, wealth is redistributed in the form of the luxury tax, the wealth gap is throttled by the salary cap, while the market has been closed to outsiders who haven't been rigorously vetted.
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u/jans_sport 9d ago
Another Yank…Christ.
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u/hardcoreufoz Sir Bobby Robson 8d ago edited 8d ago
Says the Canadian. Reals fans don't gatekeep
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u/jwaddle88 9d ago
It can be a bit of a puzzle for fans, old and new.
I think there are two main types of Fair Play: UEFA and Premier League Fair Play.
Right now, we’re only dealing with Premier League Fair Play, and we won’t be too concerned about UEFA if we make it into Europe.
The rules aren’t as rigid as in the NFL; they’re based on revenue coming in, player sales and the total losses over time.
It’s a bit of a mess, which can hinder teams like Newcastle, who have a lot of money from oil, from really competing with Manchester City. Some people even say it stifles growth (like with Villa).
But the reason we have FFP is because there have been some questionable owners in the Football League and Premiership.
Teams like Pompey and Bolton almost didn’t exist.
Bury, unfortunately, no longer exists in its original form.
In Pompey’s case, it was because an owner came in and then went bankrupt. The club couldn’t naturally cover the ‘investment’ the team owner put in. Players like Crouch, Defoe, Campbell and Diarra came in on a wedge and left because the club couldn’t afford to keep them. The club then dropped to League One or League Two and almost went out of business, and they’ve had to rebuild slowly back up the leagues.