A new study from the European Commission has put forth a series of proposals regarding the reformation and regulation of the transfer system in European soccer. “Professional soccer has recently been confronted with a financial crisis in spite of strong income growth," the report says, adding that the inflated transfer fees paid for superstar players are contributing to a looming debt crisis in European soccer.
Its recommendations for change include: capping transfer fees at 70 percent of a player’s gross salary for the entire period of his contract; regulating buy-out clauses as well as the loan transfer system; the establishment of a limit on the number of players per club; a “fair play levy” on transfer fees beyond a certain amount that trickles down to less wealthy clubs; and addressing the issue of third-party ownership of player contracts.
Since the 1995 Bosman ruling, which allowed players to move freely within the European Union once their contract had expired, European clubs’ collective annual transfer spend has increased from $541 million to $4 billion in 2010-2011, a rise of 744 percent, the report says. Of course, that money is concentrated on a very small number of clubs that can afford to buy players at inflated prices. Many clubs take on more and more debt to buy top players, but the report warns that if they gamble incorrectly, and lose a key revenue stream like the UEFA Champions League the following season, some might not be able to service their debt any longer, meaning they would have to go into bankruptcy.