By Aris Barkas/ barkas@eurohoops.net
The announcement about the future of the EuroLeague introduced new concepts for the league like the Euroleague Basketball dispute resolution chamber and the further reduction of the maximum contribution allowed by shareholders to each club.
And while everyone is focused on the new allocation criteria for the EuroLeague, especially those two additions are not minor details. Under the new Financial Stability Fair Play Regulations, by the 2022-23 season, the owners of the team can increase their team budget only by 40%, pulling money out of their pockets. For example, that means a limit for the budget of 14 million euros if a club has 10 million euros revenues.
Does this mean that there’s now a de facto salary cap in the EuroLeague? The answer is no, but there’s a European version of a “luxury tax”. Each clubs remains free to spend as much as their owners want. However if, for example, the revenues are 10 million euros and the club spends more than 14 million euros, then the club will have to pay a fine – or a “luxury tax” if you want to call it like this – to the league. All those fines will be divided and shared to the teams that respected their own limit and didn’t overspend.
It’s a simple way for the league to make the clubs fiscally responsible and reward them for trying to break even, leaving them also the chance to overspend, while giving something back to the rest of the League.
And fiscally responsible clubs, mean also timely payments to coaches and players. After a proposal made by the EuroLeague Head Coaches Board, the Euroleague Basketball dispute resolution chamber was approved and it will work as a quick way to resolve the issue of delayed payments internally within the league.
As of 2019-20 season and moving forward, if there is a 30-day delay of payments, a monitoring process will start. The clubs will have to pay up their financial obligations and if they don’t, after 60 days of delay, a disciplinary proceeding will be opened by Euroleague Basketball.
Also if a club is in debt from the previous season or seasons, a proposal made both by the EuroLeague Players Association and the EuroLeague Head Coaches Board, then the club will automatically be the subject of disciplinary proceedings. Practically, the club will not be allowed to register any player or coach for the 2019-20 season until previous debts has been paid off in full.
If the club doesn’t pay, then more sanctions will be imposed, starting from fines and ending up even with a possible suspension from the league.