The BackPage Weekly | Women's Super League: salary caps, cost controls and the financial future of the league

By Kieran Mercer, Tom Anderton and Daniel Geey

⚽ Intro

The revenues and resulting financial clout of some clubs in the Women’s Super League (WSL) are undoubtedly on a strong upward trajectory. In this BackPage Weekly, we consider financial regulation in the WSL and how models in place in other competitions may influence the regulatory course the league elects to take.

As analysed by Swiss Ramble, WSL annual revenue has increased year-on-year over the last five seasons, soaring from £8.5m in 2018 to £30.7m in 2022. However, the revenue of the top five WSL clubs dwarfs that of the bottom three. Aston Villa and West Ham do not declare their revenues, but of the clubs that do, Arsenal topped the league with 2022 revenue of £6.88m whereas Leicester City declared revenue of just £454k (circa 7% of Arsenal’s figure). A substantial reason for the discrepancy is that WSL clubs receive financial assistance from their related men’s club but not in equal proportions. Arsenal Group provided its WSL team with £5.1m of assistance in 2022 alone. Understandably, the variance in revenues combined with the softer controls on spending in the WSL have led to concerns even from large clubs such as Manchester United about the structure and sustainability of the WSL.

Currently, the WSL’s soft salary cap is the only financial regulation in place. Each WSL club’s Salary Cap Threshold (SCT) is 40% of its gross annual revenue. Appendix 5 of the WSL's Rules sets out that the purpose of the Salary Cap Regulations (SCR) is to control club expenditure “to protect and promote the long-term health and viability of the game…and to seek to ensure the competitive balance of women’s football.” Whilst the sustainability of the game is no doubt at the heart of the regulations, there are regular questions around whether cost controls help or hinder competitive balance especially because of the disparity in spending power amongst WSL clubs.  

⚽ How does the salary cap operate?

Each player in a club’s squad is given a Salary Cap Value (SCV) which is calculated by adding together most forms of their remuneration but not all. The SCV therefore contains some interesting quirks. Notably, accommodation provided to a player by the club is included for the actual value of the accommodation or £5,000, whichever is lower. This allows a club to potentially provide lavish housing and record it as only a £5,000 contribution towards the player’s SCV.       

Similarly, a player’s WSL appearance fees and bonuses are included in their SCV whereas their appearance fees and bonuses for participating in the UEFA Champions League and FA Cup are not. Considering that a club’s bottom line will be bolstered by competing in such marquee events and the more successful teams will secure such revenue, this favours the larger clubs two-fold; their SCT increases and their players receive higher remuneration which is not captured in the player’s SCV.

⚽ Lessons to be learned from men’s football and other sports?

Unlike the WSL, the Premier League (PL) does have cost controls to prevent clubs facing mounting and unserviceable debts. Under the Profitability and Sustainability provisions, a PL club will be  sanctioned if it makes a loss in excess of £105m over three years. A club which has overspent can be:    

1.    forced to agree a set budget with the PL;

2.    prevented from extending a player contract; and/or

3.    prevented from making new signings.

In addition, UEFA’s new regulations (renamed the Financial Sustainability Regulations, replacing the Financial Fair Play Regulations) begin their gradual implementation. Clubs competing in UEFA competitions are only able to spend 90% of their revenues on player and coach wages, transfers and agent fees. This reduces by 10% each year until it hits the 70% revenue mark in time for the 2025-2026 season.

Interestingly, the Government’s ‘Raising the Bar’ paper on potential reforms to the Women’s game (which we discussed in #25 Top 5 Takeaways: Raising the bar) states that any goals should look to achieve “fully independent financial sustainability and annual cash break-even on a standalone basis for the women’s game” to “avoid…the financial instability and failures of other sports.” One potential (rather controversial) proposal is for a closed-league approach to the top two tiers “to give certain teams more security around their investment.” At present, the approach appears to be self-regulation rather than the interventionist approach taken by Government to the men’s game which appears set on an external football regulator to improve financial governance.

⚽ Concluding thoughts

As a league in its relative infancy, the importance of establishing a fit for purpose governance structure which promotes the sustainable growth of WSL clubs is paramount. Conscious to avoid the practices which have allowed financial mismanagement to proliferate through men’s football and rugby systems, the WSL has the benefit of being able to survey the sports regulatory landscape to achieve better, more effective financial governance.