The Indian Super League (ISL) has cautioned teams against breaking the salary cap rule. They have warned clubs that the penalty awaiting such rule-breaking will be a deduction in points.
ISL teams are split on the basis of salary cap. Sources state that 3 clubs have asked the league to do with the salary cap. They would prefer the liberty to make the signings they need.
On the other hand, 4 teams want the it to be present. The remaining clubs did not pick a side as the rules were being flouted anyhow.
A top club executive was quoted saying, “We think it’s necessary to have a salary cap since it brings balance to the league. If it’s removed, it will become more of a financial battle, rather than football.”
“The teams who have the financial strength to spend much more than us will simply blow away the competition. It will be uneven.“
What is a Salary Cap?
A salary cap is the highest spending allowed on player acquisition. It encompasses negotiator fees, performance bonus exclusive of team bonus and individual arrangements with players.
On player acquisition, clubs have a limit of Rs.16.5 crore. However, in the past teams have spent more. Last term, ISL cautioned teams and this time around, the penalty will be illiberal and on record.
Article I (XX) of the ISL Coach & Player Selection Guidelines 2021-22 – “Any club found to have exceeded the salary cap, knowingly or otherwise, shall be liable for action/sanction by the league, with possible penalties including without limitation, any or all of the following: fine; and/or deduction of points“.
Nonetheless, like any system, there are always loopholes present and acquiring players on loan happens to be the standout. Loan fees discount player salaries. Hence, a couple of sides have loaned in players with zero value to the cap.
To cap or not to cap
Following the ISL guidelines – “if a loaned player’s salary/fee is absorbed all or in part by the parent club, this amount will not be considered as part of the salary cap components for the salary cap value with respect to that player“.
The constituents of each player’s salary cap value is exclusive of GST but inclusive of all other applicable taxes. As for players from abroad, guidelines do not specify whether after deduction, contract values are gross or net.
Clubs against the salary cap state that the regulation limits them from bringing in quality players from abroad. Nonetheless, teams receive an exemption of sorts regarding marquee players. The cap excludes the salaries of such players.
Some believe that higher quality players are required in place of marquee signings. The means to attract these quality players is higher spending. Meanwhile, organizers are of the opinion that the cap aids in controlling player acquisition cost. Else, salaries would shoot through the roof.
ISL guidelines – “There is a need to maintain a healthy competitive balance“.
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