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European Commission Report Suggests Top Football Clubs Need NBA-Style Luxury Tax

A report commissioned by the European Commission suggests that football's richest clubs such as Real Madrid and ManU "should pay a levy on bigger transfer fees to address a revenue-sharing system in the sport that’s 'skewed' in their favor," according to Alex Duff of BLOOMBERG. A copy of the report by Brussels-based policy consultancy KEA European Affairs said UEFA adds to "existing supremacies" in the sport by redistributing less than 6% of revenue from the elite Champions League to teams that do not qualify. The report said that the NBA "has a so-called luxury tax for teams above a certain payroll." The European Commission "is seeking to encourage a review" by football authorities of the €3B ($4.1B) player-trading market after a boom in spending. Coventry University Sports Business Strategy Professor Simon Chadwick said, "The biggest clubs would fight a luxury tax. Manchester United would go straight to court. They would say BMW isn’t subject to a luxury tax, why should we be?" Real Madrid's press office said that the team "had no comment on the report." The report says that In England, Spain, Portugal and Italy, 92% or more of league titles "were won by the three most successful teams" between '01-12. The report says, "The current transfer rules do not fight effectively against competitive imbalance" (BLOOMBERG, 2/6).

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