The EuroLeague Introduces Salary Caps and Luxury Tax System, Linking Player Salaries to Club Performance

The EuroLeague Commercial Assets (ECA) Shareholders Assembly has approved new Financial Stability and Fair Play Regulations for the EuroLeague.

The new regulations introduce salary caps and a luxury tax system for the first time in the league’s history:

According to the rules, A-tier teams must spend at least 32% of their average revenue over the past two seasons on the entire team; if a club’s spending exceeds 40% or 60% of its revenue, it will be subject to a luxury tax.

Currently, there are 12 A-tier teams in the EuroLeague: Barcelona, Real Madrid, Baskonia, EA7 Milan, Istanbul-Anadolu Efes, Istanbul-Fenerbahce, Maccabi Tel Aviv, Zalgiris, Bayern Munich, ASVEL, Panathinaikos, and Olympiacos.

Under the regulations, the amount each club can spend will depend on its average revenue over two seasons. The revenue of clubs includes three categories: game revenue, commercial sponsorship, and other income.

The EuroLeague salary cap is divided into three different levels: low salary level, basic salary level, and high salary level.

Low salary level: teams must spend at least 32% of the average licensed club revenue;

Basic salary level: allows teams to spend up to 40% of the club’s average revenue;

High salary level: allows teams to spend up to 60% of the licensed club’s average revenue.

Similar to the NBA, EuroLeague teams that exceed the salary cap will need to pay a luxury tax, which applies to both the basic salary level and high salary level teams. Additionally, funds raised from the luxury tax will be distributed to other clubs that remain within the prescribed limits.

The ECA Shareholders Assembly stated that this is a first in European sports, linking players’ salaries to the collective performance of the clubs.

The specific measures will be introduced gradually over the next two seasons and fully implemented by the 2027-28 season.