Time for a salary cap to keep leagues competitive and reduce agents’ influence

After the formal inception of the Football League in 1888, the financial benefit that accrued from the game went largely to those who owned clubs. It was nearly 70 years until an Italian, Gigi Peronace, a translator for British managers in Italy, became one of the first to exploit the game’s growing popularity in Europe and see a market opportunity.

In 1957, Peronace mediated the groundbreaking transfer of John Charles from Leeds to Juventus for a then-record £65,000, exploiting the wage disparities between the two countries. At a time when UK wage caps limited players’ earnings, Italian clubs could offer lucrative deals, highlighted by Charles’s £10,000 signing-on bonus compared with the UK norm of £100.

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The abolition of the maximum wage in English football in 1961 significantly boosted the appeal of playing in the country and enabled a 61% increase in footballers’ average salaries by 1964. Consequently, agents found themselves wielding enhanced bargaining power, becoming indispensable allies to players. This era heralded an increase in the professionalisation of the game and, with it, a surge in the potential earnings for those involved.

In 1992, the advent of paid television transformed sports viewing by introducing subscription models. This influx of broadcasting revenue boosted clubs and, by extension, player salaries, with agents also standing to gain from the enhanced earnings. The 1995 Bosman ruling revolutionised transfers and enhanced player leverage by granting free agents the ability to command higher wages, increasing agents’ commission potential along the way.

This growing influence of agents extends to the lower leagues of football, even though the absolute amounts contrast wildly with those in the Premier League. Player representation is clearly important to ensure we never return to a historically distorted balance of power. However, it has to be calibrated with the overall sustainability of clubs in a world where, even in the Premier League, losses are systemically fuelled, at least in part, by the rising costs of players’ wages and agent demands. In my experience, agents’ commissions and fees have ranged from a flat fee of several thousand pounds to percentages of the player’s earnings where some claim they “don’t get out of bed for less than 10%”.

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Particularly at our level of the game, deals are not complex or even that interesting. There are few variables and negotiations should be more straightforward – is there a fee to be paid, what will the salary be, what is the term, any bonus schemes and is there a sell‑on fee? One manager even told me that my summary is over-complicated as most players really only care about “wages and days off”.

In other industries, positive negotiations are an opportunity to enhance long-term reputations and are generally grounded in professionalism and mutual trust. This is often impossible in football as the same agents come around infrequently. I was surprised to discover that the bar on becoming an agent with Fifa is spectacularly low, with only a background check, a fee and a test of 20 multiple‑choice questions (open book) being required for certification.

This ease of market entry leads to a varying range of quality of individuals we encounter. Conflicts of interest are endemic if the agent’s remuneration is dependent on getting a deal done rather than necessarily what is best for the player or the club.

One of the biggest challenges is how approaches are made to players. An initial enquiry, although technically illegal, makes sense as there is no point wasting time if a player doesn’t want to move. The problem occurs when clubs collude to distract a player or even agree terms before the current club has engaged in a conversation to allow a player to leave.

The promise of a significant increase in salary and maybe a signing bonus for the agent can really affect a player. Often, all parties choose to forget they have an existing contract that is confidential. I recently had an agent tell me the terms he had agreed when speaking to the prospective new club and a club chief executive quoting confidential terms in that player’s contract. That was a contractual breach if you want to take a hard line, but mostly it’s just sloppy, unethical and unprofessional.

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There is a market inefficiency to be improved upon in any industry where parts of the chain are extracting more value than the benefit they create. According to Fifa, in 2023 clubs paid $888m in agent service fees, an increase of 42.5% on 2022. English clubs represented $280m of the total.

To align the economic interests of players with the sustainable future of the sport, I would have some suggestions for the new football regulator. The introduction of a salary cap coordinated with the Professional Footballers’ Association and the Football League and benchmarked against European markets to keep our leagues competitive. The cap can be set at a level that allows merit-based advancement (say £2,000 a week in League Two), which will mean talented and ambitious players can move up.

This framework would include provisions for clubs to sign up to three “marquee” players outside the cap, mirroring the approach of Major League Soccer in the US. All of this has the advantage of being much more straightforward than financial fair play regulations.

A cap would also enable standardisation of salary and commercial negotiations across different tiers of the league, effectively removing the perceived complexity and conflicts of interest. We could further enhance the model by equipping more former players with professional qualifications and skills to undertake roles filled by agents. This would divert agent commissions to the PFA, benefiting ex-players, with contributions potentially feeding into the PFA pension scheme.

This approach not only promises a fairer distribution of resources but also ensures that those who have dedicated their lives to football continue to benefit from the game’s prosperity.

• Jason Stockwood is the chair of Grimsby Town