they can be in the same league. In Italy for example Juventus usually has like 20 different guys loaned out to a bunch of bottom table teams every year
This doesn’t really go against the cap though. All cap hits are transferred. The advantage is that it might allow a team to loan a player on a long term deal to a team that only wants to try that player for a shorter period of time because they aren’t sure about how he’ll fit or because their future cap structure won’t allow it.
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