The League will communicate in September the cost limits of the clubs’ squad

Much is being said about the date of July 31 as the day when we will know the margin of action of the clubs thinking about the registration of players in this summer transfer window. The already known LSports Template Cost limit.

But it is worth knowing, and this has been confirmed Sports world, which will not be until September when the employers communicate the new limits of their templates. In other words, once the market is closed and all the players are already registered to participate in the League or UEFA, when they participate in European competitions. Some limits that will condition future movements or incorporations in January 2023.

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In other words, the clubs are working this summer based on the limits announced by LaLiga last March, where it set a budget limit of 2,046 million, 10% less than the previous year, and where the most devastating data was that of the club azulgrana with a negative gap of -144 million. The opposite pole is Real Madrid, which has a salary limit of 739 million, the highest in Spanish football. Other cases are those of Sevilla with 199 million, the 161 of Atlético de Madrid. Clubs like Villarreal (148 million) Athletic Club (124 million) or Real Sociedad (111 million) are also positive.

A template cost limit that is within the Economic Control that has existed in Spanish football since 2013 at the proposal of the clubs themselves. It was launched with the firm objective of guaranteeing the sustainability of the competition and of its own clubs by reviewing the financial situations.

A preventive control

A control that also has a preventive nature. In other words, it is done a priori, unlike measures such as UEFA’s Financial Fair Play. Thus, clubs are aware of the amount that can be spent in advance, which means that they can more easily meet their limits, thus avoiding the creation of unsustainable debt. It is a differential measure between the five major European leagues when facing the transfer market. And this is precisely the scenario in which we are currently.

The Template Cost Limit is a basic pillar. all your variables

And, when making signings, one of the pillars within this Economic Control is important. And it is none other than this Squad Cost Limit, which is the total amount that each club can spend on its squad. Understanding as a template both the Registrable and the Non-Registrable. The registrable squad includes players with numbers from 1 to 25, coach, assistant coach, physical trainer and technicians with similar functions, all from the first team; but in addition, also the players not attached to any team of the club or even already outside it but who accrue some cost (for example, compensation). And the Non-Registrable squad includes all the other players and coaches of the club.

And where it does not only affect the salary of these professionals, but also many other factors: variable remuneration, image rights, cost of agents, amortization of transfer rights, Social Security, compensation, 25% of the purchase option price, fee leave, and other remuneration. So any new players to sign up must be able to fit within this Squad Cost Cap.

The simple equation to know this limit

Taking into account all these scales within what is understood as the Cost of the Sports Squad, the limit of each club corresponds to a simple equation: budgeted non-sports expenses are subtracted from budgeted income, and the budgeted non-sports expenses are also taken into account. debt payment. The resulting amount is the aforementioned Squad Cost limit for the club in question. Under the base of the existing one since last March, and according to the new income of the clubs or the sale of soccer players, it is what the clubs must act on.

In this way, and based on the Limit, when a new player is signed, the club sends all the documentation of said player to LaLiga, which is the one who authorizes or denies the registration at that specific moment, in accordance with the rule and with the updated Limit as of the date of said registration.

In addition, the League has a Validation Body that, using reports from independent experts and rules established in the Regulations, can adjust any operation, for example, to ensure that said operations are in accordance with market value. In this way, it guarantees that all the players registered by all the LaLiga clubs comply with the Economic Control. Only in this way is there a guarantee that all teams play with the same rules, that there is no financial doping in any of its forms and, above all, the sustainable growth of LaLiga clubs.

What happens if a club exceeds the Limit?

Faced with this exceptional situation, and in which Fútbol Club Barcelona is immersed, the Economic Control contemplates the “1/4” rule. That is, in case of being exceeded, it is allowed to spend at most 25% of the cost that you reduce previously. In this way, expenses are not prohibited to any club, and in turn it is guaranteed that the excess amount is reduced until reaching the required financial balance again.

As an exception, from the 2020/21 season and to promote the transfer market, the employer’s association included two additions to the “1/4” rule. On the one hand, if the club that is exceeded makes a transfer for which it obtains a capital gain, 25% of said capital gain will also be added to the calculation of “1/4”. And, on the other hand, if the savings comes from the hand of a player that represents more than 5% of the Sports Squad Cost, then the “1/2” rule will be applied instead of the “1/4”. Or what is the same, you can spend up to 50% of that cost that you have previously reduced.

Rule that has been modified from this season and becomes 33%, that is, one euro for every three saved, although it will be eliminated by specifying it once this summer market ends.

Flexible measures to alleviate the blow of COVID in the following workforce cost limit

Let’s not forget either that last April the League announced that from this coming season COVID losses will be computed for a maximum of five years. In other words, the total losses from the previous season will no longer be subtracted when calculating the cost of the squad in order to give more room to hire players. In this way, the teams will only be attributed 15% of the losses of the 2020-2021 season linked to Covid-19 in 2022-2023, rising to 20% in the 2023-2024 and 2024-2025 campaigns and up to 22.5% in the 2025-2026 season.

Great results of Economic Control

The fruits of the application of this Economic Control together with the responsibility of the clubs themselves are more than evident. From 2014/15 to 2019/20, the combined Net Asset Value of the clubs increased by 250%. The debt with the Public Administrations has also been drastically reduced, in the same way that complaints for non-payment to players have fallen drastically.