Celery cap in the Euroleague: It's complicated, but it might work

Unlike football, European basketball has always had the fact that there is an aggravating circumstance another continent on which this sport is played far better.

However, the bigger problem lies in the fact that American basketball relatively quickly found a financial model that is a money-making machine, while in Europe this sport is still seen as an unprofitable activity.

At the end of the seventies, with the merger of the NBA and the ABA league, the sale of TV rights to the specialized sports channel ESPN and the entry into the league of Bird and Magic, the NBA gained momentum and eventually became a financial monster that in 2024 sold its TV rights for the next 11 years for an incredible 76 billion dollars.

In the same year 2024, on the other side of the Atlantic, Euroleague winner Panathinaikos will collect the entire 1,75 million euros from the competition, which is only enough to cover the salary of the fourth or fifth highest paid player in the squad.

In addition to the NBA, the Euroleague has always been compared to the soccer Champions League, which awards clubs 25 million euros for winning, 18 million for just participating, 2,1 million for a win in the initial phase, 800 thousand for a draw...

There are also objective reasons that justify the inability of the leaders of European basketball to create a greater inflow of money.

Whatever happens, basketball in big markets such as Germany, France, England or Italy will not even come close to the popularity of football, and some other sports as well.

Also, the diverse ownership structure of clubs that are ready to invest somewhat larger amounts of money, as well as the drastic differences in the tax systems of the countries from which Euroleague participants come, make it significantly more difficult to create a system that will be competitively fair, marketing interesting, and investment attractive.

However, the mentioned reasons must not be an excuse for the weak business results of the Euroleague, a competition that is under the auspices of the limited liability company ECA (Euroleague Commercial Assets).

America is really too far, China has long been in the story, and with the approach of investment from Australia and Japan, and even college basketball, it was high time that the leading people of European basketball put their finger on the forehead and try to design a model similar to the American one, even if it is crowded of question marks and gray areas possessed by the recently presented.

Current regulations

The ECA shareholders' assembly approved the introduction of CBS (Competitive Balance Standards), i.e. a series of provisions concerning finances, which Euroleague clubs will have to comply with from the 2027/28 season.

Clubs have been given almost three seasons to prepare for the new reality brought by Europe's version of the "celery cap".

CBS will represent a continuation of the existing set of regulations called Financial Stability & Fair Play Regulations (FSFPR). Indeed, in publicly available documents on the Euroleague website, one can find detailed guidelines and rules required of participating clubs.

According to the current regulations, 65 percent of the total budget (which must be a minimum of seven million euros) can be used for the players' gross salaries, "minimums" are also prescribed for players depending on the number of years they have spent performing in the Euroleague, while they can be read and interesting items such as travel and housing expenses, or the mandatory provision of dental services to players, as well as their spouses.

Also, the clubs are obliged to submit financial reports for the three previous seasons, and the deficit (if any) must not exceed ten percent of the average budget in the mentioned time period. In addition, clubs must not be late in paying obligations to players or other clubs for more than 45 days.

A logical question arises - if there are already numerous regulations, where is the need for new ones, and what additional changes will CBS bring?

Photo: FoNet/Euroleague

CBS model

The basic idea behind CBS is to introduce a minimum and maximum amount of money that clubs will be allowed to spend on players' net wages.

The goal of the leading people of the Euroleague is to improve the financial sustainability of the clubs and the competitiveness of the competition, but also to lend a hand to the players by guaranteeing for the first time that at least 32 percent of the net club budgets go to their accounts.

The CBS model will contain three levels within which clubs will have to operate:

Low Remuneration Level (LRL), which represents the lower threshold that clubs will have to spend on players' net wages, which is 32 percent of the average revenues of licensed Euroleague clubs in the previous two seasons;

Base Remuneration Level (BRL), which represents a basic level of 40 percent of the average revenues of licensed Euroleague clubs;

High Remuneration Level (HRL), which represents the upper threshold of 60 percent.

Those behind this initiative made sure that all this was not such a simple and easy-to-understand calculation, which, in addition to the leaders of the competition, are also the leaders of clubs with a famous license, as well as representatives of the Euroleague players' union (ELPA).

Namely, all registered players of one club are included in the LRL calculations. Therefore, the clubs will have to spend a minimum of 32% of a certain amount that depends on the revenue of the licensed clubs on the net wages of the players.

Certain benefits will be given to unlicensed teams, which is fair because they are deprived of certain revenues that go to licensed teams.

Everything still makes sense, but we have yet to get to BRL where the complications begin.

The BRL represents the upper limit that clubs can spend on players' net wages, 40 percent of the prescribed amount, but here the following are left out of the calculation: the wages of two key players (Anchor Players), the salaries of all players under the age of 23, 25 percent of the annual salary of all players who have spent three or more years with the current team (Extended-Tenure Players), salaries of players who are injured for a long period of time (Long-Term Injured Players), as well as the salary of one player whose role is not fully explained, and who is called a Mid-Level player in the explanation.

Finally, we come to the maximum (HRL) that clubs are allowed to spend on players' net salaries, which represents 60 percent of the prescribed amount. This level includes the salaries of two key players (Anchor Players), but not the others already mentioned and explained within the basic BRL level.

If an ambitious owner like Dimitris Yanakopoulos appears who really wants to spend more than the prescribed amount, he will be allowed, but with the obligation to pay something called a "luxury tax" in the NBA - for every euro above the BLR i(li) The HLR border will have to pay an additional half euro or euro, depending on the percentage of the overrun.

It is a good move that this money will be shared by the clubs that operated within the prescribed limits.

Pros and cons of the model

This model should really create more uniformity among team compositions, and thus increase the competitiveness of the competition. Clubs will have more similar budgets than before, so there will be fewer "superteams" like CSKA, Spanish, Turkish or Greek clubs.

Clubs that solve personnel positions within the sports sector in a high-quality manner, such as general managers or scouts, are likely to have an advantage over the competition.

However, this model is very demanding from the analytical-mathematical side, so it should not be surprising if clubs start copying NBA teams that have employees who deal exclusively with celery cap, that is, calculations that help their clubs stay within the financial limits.

It is also a good thing that the Euroleague left a space of several years for the full implementation of the model. They announced that the model will be partially implemented from the 2025/26 season, but in full capacity only from 2027/28.

Photo: FoNet/Euroleague

This is fair to the clubs that have recently decided to partially or completely overhaul the team, such as Partizan, because it will give them time to prepare a strategy by which they could use the numerous discounts that are obtained through players who defend the colors of the same club for many years. or by introducing young players.

The fact that the salaries of players under the age of 23 are not included in the calculations is one of the best things brought by the CBS model. European basketball is in great danger of losing young players who more and more often go to the college that has begun to pay for them, and less and less decide to play in the Euroleague, where they practically do not get minutes.

Nevertheless, the inability of ECA to attract serious funds in the years ahead is a justified reason for skepticism when it comes to the transparent and fair implementation of the adopted plan.

It would be nice to reduce the number of gray areas and unexplained details of the model like the mentioned Mid-Level player, so that the clubs with better players, not better lawyers, would win.

Format, licenses and position of Serbian clubs

Before the actual implementation of seleri kep, the ECA would have to resolve the issue of the format of the competition and the number of participants, as well as the number of clubs that have a license.

The license is currently owned by 13 clubs that are part of the league's ownership structure and that make decisions regarding its future. The fact that one of the shareholders of the league is still the Russian CSKA, which has the right to vote in the Assembly, but not the right to play, seems absurd.

The return of Russian teams to the competition is something that must be planned. CSKA is a sure returner as soon as the conditions for such a thing are met, while Zenit and Unix also expressed great ambitions on the eve of the war in Ukraine.

With the return of the Russians, is the expansion of the Euroleague a logical solution, because the impression is that the Euroleague does not want to lose Berlin and Paris as big markets, and maybe not even the Serbian representatives who brought incredible euphoria, full halls and millions of views on social networks?

In case of expansion, the number of matches will be higher, and thus the income from TV rights. Is there room in the calendar for something like that and is there a willingness of national associations and leagues to adapt their competitions to the Euroleague?

There are many questions and obstacles, but at this point it doesn't seem like an impossible mission. The EuroLeague has changed the competition systems often, which is not necessarily a bad thing. Even the football Champions League, a symbol of prosperity compared to its basketball counterpart, encountered a threat called the Super League, so it had to increase the number of participants and games.

The expansion would certainly bring new licenses as well, as Euroleague CEO Paulijs Motiejunas announced, pointing out during this year's F4 that the introduction of licenses lasting between three and five years is certain.

This would significantly improve the position of the given clubs and make it easier for them to form a budget and negotiate with players, but also bring money from TV rights, which are currently shared only by clubs with a license. In addition, the newly licensed clubs would be freed from the obligation to pay a million euros just for participating in the competition, so they could redirect that money to strengthening the playing staff.

Serbian clubs are in a good situation, and their current budgets are closer to the middle part than the bottom of the Euroleague. Both clubs have ambitions in terms of obtaining a license, which even the proverbial cautious Željko Obradović publicly emphasized during the promotion of the new black and white team.

Photo: FoNet/Euroleague

Partizan, despite the disastrous previous season and the complete reconstruction of the team, according to all announcements, will once again manage to sell 17.000 season tickets and have the Belgrade Arena packed for all Euroleague home games.

It is also an indication that the trophy-winning coach Pablo Lasso was once right when he said that the Euroleague is "a league of clubs, not a league of players."

The Euroleague will hardly become, following the example of the NBA, a league of players. For such a thing, it is necessary to promote its best players in a more successful way, but also to keep them long enough so that they become fans' favorites and recognizable faces to people who do not follow basketball regularly.

Given that such a thing is unlikely, the Euroleague will remain a league of teams even with the celery cap, which will look to close in the near future into a competition in which there is no entry or exit.

Serbian clubs must do everything possible with results and investments to buy themselves a ticket for that selected company (with limited liability) in the coming years.