Salary cap

Here is the EFL statement.

Main points for me :

1. Agent's fees are in, which means that they will probably take a hit - not before time

2. Loans have an impact on spend so will need managing carefully

3. There will be in-season monitoring to identify problems early

 
I'm glad this went through. It's absolutely needed and whilst I don't like measures that apply to the bottom two leagues alone, I'm glad the clubs see the need to control finances. Covid has only exacerbated what already is an issue.

Statement is a bit bare though.

What's the starting date? Is it this season? (I think I know this, there's something about this year being a grace period and player signed before X not counting I think)

What happens if your salary is significantly over budget? What are the punishments? Are they incremental? Are they financial or points based? (Read it again, it says clearly it's financial)

It's very 'EFL' to make it up as they go along regarding sanctions and I'd like to know a bit more about how it's enforced - it would seem to be really important to lay out a very clear set of regulations that can be consistently followed.

How will the EFL know? Will it be retrospective (i.e. when accounts published, which is all a bit ad hoc) or will there be auditing of clubs at various junctures?

Like the fact agents fees included.
 
It puts the inflated wages in the Premier league in perspective, it would be interesting to see how many Premier league players were paid more than 2.5 million gbp. per annum
 
Clubs exceeding the ‘overrun’ would be referred to an Independent Disciplinary Commission, although the EFL will monitor the Cap on a real-time basis throughout the season as is the current position with SCMP measures across the two divisions. Where breaches do occur, sanction guidelines are in place to be considered as appropriate by an independent Disciplinary Commission.

I'd really like a link there to say what the 'sanction guidelines are' - so that we don't get the usual 'we've been treated differently than them' issues around problem clubs.
 
Hmm

Hope it works betted than the salary controls or the owners and directors test

Note there’s no comment on squad size limits or exemptions

The world will definitely not be a worse place if the average League One player is ‘only’ earning £75k a year, but it seems unimaginative, overly blunt and open to challenge: firstly by the PFA, later by clubs who can pay the best loophole-hunting lawyers
 
I'm glad this went through. It's absolutely needed and whilst I don't like measures that apply to the bottom two leagues alone, I'm glad the clubs see the need to control finances. Covid has only exacerbated what already is an issue.

Statement is a bit bare though.

What's the starting date? Is it this season? (I think I know this, there's something about this year being a grace period and player signed before X not counting I think)

What happens if your salary is significantly over budget? What are the punishments? Are they incremental? Are they financial or points based? (Read it again, it says clearly it's financial)

It's very 'EFL' to make it up as they go along regarding sanctions and I'd like to know a bit more about how it's enforced - it would seem to be really important to lay out a very clear set of regulations that can be consistently followed.

How will the EFL know? Will it be retrospective (i.e. when accounts published, which is all a bit ad hoc) or will there be auditing of clubs at various junctures?

Like the fact agents fees included.
It takes effect immediately.
 
It puts the inflated wages in the Premier league in perspective, it would be interesting to see how many Premier league players were paid more than 2.5 million gbp. per annum

Most of them are. For example, Bournemouth's average wage is around £3m per player. Even Burnley is in excess of 1.5m per player and they're always around 17th highest spenders (given that teams that come up are usually bottom 3)
 
Are there exemptions for the players already in contract? Realistically Sunderland would need to offload most of their squad but how can they do that if they're in contract?

Any player under contract up to and including today is treated as the average divisional wage for the length of contract. Same will apply going forward to relegated teams too.

Edit to add: this is from the club site.
 
I think there is a degree of wiggle room available

' An ‘overrun’ concept is also included if a Club’s total squad salary payments exceed the Cap by up to 5%, whereby dependent on the percentage level of the overrun, a financial penalty would be payable for every £1 in excess'

Does this mean we can actually spend £2,625,000.00 on wages and then the £125,000 (over the £2.5 million) will be subject to a penalty - essentially a tax on the clubs paying above the cap.

I imagine that 5% will eventually be extended and I also note there is no indication of points penalties etc for those who breach the 5% and instead just that they 'be referred to an Independent Disciplinary Commission... Where breaches do occur, sanction guidelines are in place to be considered as appropriate by an independent Disciplinary Commission'.

So by my reckoning those paying say £3 or even £4 million wont necessarily have points docked, but instead are likely to face financial penalties...

Should therefore give the 'big' or ambitious clubs chance to flex their financial muscles and that doing so will result in the EFL (and hopefully the smaller clubs (financially)) essentially receiving further reimbursement
 
It’s good, but it also means the gap between the bottom 2 divisions and the championship will grow even bigger. I’d like it in all 4 divisions, but know there no chance of it happening in the premier league and little chance in the championship
 
Ah! Thankyou. Appreciated.

And it is capped as the divisional average, not treated as, got that bit wrong. So if it's already below it then i assume it would stay that way?

"Any contract entered into on or prior to today’s vote will be capped at an agreed divisional average until that contract expires. Moving forwards, Clubs that are relegated will be permitted to cap all contracts at the divisional average prior to the Club’s relegation until those contracts expire."
 
One point that might seem pedantic but how can there be 'an agreed average?' - I'd assume an average is all the wages add up then divided by the number of players.

Not something you debate and agree.

I think we can also give up on signing anyone who was in contract before this went through....
 
It’s good, but it also means the gap between the bottom 2 divisions and the championship will grow even bigger. I’d like it in all 4 divisions, but know there no chance of it happening in the premier league and little chance in the championship
I think it makes getting promotion next season or the one afterwards incredibly important if we want any chance of competing on our return to the Championship. It also makes the fall from the Championship a hell of a trapdoor for those who do get relegated - should Stoke have dropped this season then their huge wages would have been crippling under these new proposals. I can see the Championship clubs going into a bit of a spending frenzy to try avoid relegation come January - which could be a disaster waiting to happen whilst those who are relegated will have fire sales.
 
It’s good, but it also means the gap between the bottom 2 divisions and the championship will grow even bigger. I’d like it in all 4 divisions, but know there no chance of it happening in the premier league and little chance in the championship

Absolutely.

Failing that, I'd like to see limits on squad sizes at those levels (both at youth and first team level) then the larger clubs can't simply exploit the lower wages, stockpile all the talent and then let them go three years later without them doing anything.

I think that is a fair measure to protect clubs at this level from exploitation.
 
This will also make it harder to entice players from the Championship because most will be unwilling to take the necessary pay cut to drop down a division. They'll happily sit on the bench or in the stands for the rest of their contract before losing half their earnings.
 
I think it makes getting promotion next season or the one afterwards incredibly important if we want any chance of competing on our return to the Championship. It also makes the fall from the Championship a hell of a trapdoor for those who do get relegated - should Stoke have dropped this season then their huge wages would have been crippling under these new proposals. I can see the Championship clubs going into a bit of a spending frenzy to try avoid relegation come January - which could be a disaster waiting to happen whilst those who are relegated will have fire sales.

Surely clubs will have to start negotiating contracts that take into account the possibility of relegation from now on. I.e. you might be on 15k a week in championship but if we go down, it will be 1k as a standard thing.
 
This will also make it harder to entice players from the Championship because most will be unwilling to take the necessary pay cut to drop down a division. They'll happily sit on the bench or in the stands for the rest of their contract before losing half their earnings.

To be honest, the championship finances are a bigger mess than League 1 and 2. The clubs are close to the promised land so live on the never never but there's some seriously fucked clubs up there without question. I'm not so sure that a lot of them won't see a cap as a godsend given the state of their finances. Spending 200* of income on wages to finish low midtable (Reading) is the most extreme example, but loads of them spending well more than 100% income on wages and then pissing about generating income in dodgy ways to hide it.
 
Surely clubs will have to start negotiating contracts that take into account the possibility of relegation from now on. I.e. you might be on 15k a week in championship but if we go down, it will be 1k as a standard thing.
It's going to make signing players harder for some clubs - and it's really going to hit the 'big' clubs hardest - particularly those that think relegation isn't a real threat and those who have double relegation's from the Premier League. Can't imagine clubs like Aston Villa for example asking Grealish to sign a 100k p/w contract with a clause saying he'll only be on £2000 should a double relegation happen - more likely relegation release clauses etc
 
Are there exemptions for the players already in contract? Realistically Sunderland would need to offload most of their squad but how can they do that if they're in contract?
Yes and I think the contracts we have done before this will be exempt.
 
It's going to make signing players harder for some clubs - and it's really going to hit the 'big' clubs hardest - particularly those that think relegation isn't a real threat and those who have double relegation's from the Premier League. Can't imagine clubs like Aston Villa for example asking Grealish to sign a 100k p/w contract with a clause saying he'll only be on £2000 should a double relegation happen - more likely relegation release clauses etc

Yes, interesting points...
 
I'm not so sure that a lot of them won't see a cap as a godsend given the state of their finances.
They're not getting one though? I agree one should be put in to place in the Championship, but then the PL would become even more of a closed shop than ever because it would be nigh on impossible to stay up.
They'll all just keep chasing the dream and most of them will continue to hemorrhage money.
 
They're not getting one though? I agree one should be put in to place in the Championship, but then the PL would become even more of a closed shop than ever because it would be nigh on impossible to stay up.
They'll all just keep chasing the dream and most of them will continue to hemorrhage money.

They're in discussions about it I think. Or possibly I read that wrongly - there was deffo something about 'negotations around finances are ongoing with Championship clubs' - that might mean changes to FFP or something I suppose.
 
This only works if there is a cap in all divisions. Otherwise, as has been said above, the gap between the Championship and L1 will become even bigger. Despite the transition and relegation provisions, this will knacker those relegated from the Championship, who will need a fire sale of their most expensive players. Looking at what is included in in the cap I think the limits have been set too low. I am against a crude cap.
The introduction of the cap is probably one of the reasons that we signed so many players early and have been keen to release others from the squad
 
What about signing on fee's is that allowed?
Here's 750k for joining us and your on a two year deal at 250k so basically giving them a near 10k a week.
And will clubs find other ways of finding ways around it here's a house/put wife on payroll etc?
 
What about signing on fee's is that allowed?
Here's 750k for joining us and your on a two year deal at 250k so basically giving them a near 10k a week.
And will clubs find other ways of finding ways around it here's a house/put wife on payroll etc?
I believe signing on fees are usually spread over the length of contract, so would be included on that basis
 
Sunderland fans are going mental on Twitter about their "lost advantage".

It's done them a lot of good lately, after all....
 
Without it being applied to all four divisions it's completely worthless crap.

Teams going up to the Championship will have to completely change their finances to stay up, it could actually put clubs in greater danger.
 
If applied to all divisions on a sliding scale from prem down then it would be a good thing. Only applying it to the two bottom leagues will be bad news as it will just cut them two leagues adrift from the championship and the prem.
 
With all of the uncertainty that Covid-19 has brought, could you blame players taking the highest offer, which will be far more in the Championship, even if it means they don't have a hope in hell of ever playing.
Championship clubs could now in effect totally nullify any ambitious League One clubs because the playing field is completely and utterly skewed in their favour.
 
It does seem a rather low cap. Like has been mentioned in most points above, the gap to championship will get larger with championship players happy to sit in the stands rather than drop down a league to play.

It does seem unfair to clubs with a larger fan base (and I include us in this category as if we are playing well could easily get +10k crowds in L1). If clubs can get 15k-20k attendances but can only spend say 30% of that revenue on salaries, bonuses etc then where does the rest of the income go.......owners back pockets?
 
Sunderland fans are going mental on Twitter about their "lost advantage".

It's done them a lot of good lately, after all....

Aren't they in shit loads of debt? Maybe it'll do them good cos if they can pay off their debts to an extent, it will therefore leave them a lot more attractive to decent investment. I know they did some dodgy debt restructuring but I don't think it made the club especially more attractive to the outside world.
 
It does seem a rather low cap. Like has been mentioned in most points above, the gap to championship will get larger with championship players happy to sit in the stands rather than drop down a league to play.

It does seem unfair to clubs with a larger fan base (and I include us in this category as if we are playing well could easily get +10k crowds in L1). If clubs can get 15k-20k attendances but can only spend say 30% of that revenue on salaries, bonuses etc then where does the rest of the income go.......owners back pockets?

That's an interesting question.

I guess it's low given the circumstance this year. I'd assume it would be renegotiated next year. As someone else alluded to, it's probably based around a break even figure of 4k or so and perhaps also attempts to recoup some of the costs of the loss of the end of last year and beginning of this.

The interesting detail will be how the future caps are negotiated and how the changing makeup of the league season upon season impacts it.
 
Using the roughest of estimates, if Sunderland get gates of 20,000 at £20 a ticket, their gate receipts for the season will be £9.2m. Then there is sponsorship, merchandise sales, etc.

Yet they can only spend £2.5m of that on wages.

I can see why their fans are unhappy about only being able to spend the same amount as those jokers up the road with their 2000 fans.
 
Aren't they in shit loads of debt? Maybe it'll do them good cos if they can pay off their debts to an extent, it will therefore leave them a lot more attractive to decent investment. I know they did some dodgy debt restructuring but I don't think it made the club especially more attractive to the outside world.
According to their current David Brent-a-like chairman they're not now, although their fans are still entitled wankers.

Have you watched S2 of the documentary? It's hilarious.
 
There is a concern here that a bad owner buys a club for minimal outlay (a Sunderland, Villa, Newcastle etc) - invests nothing, takes the hit of back to back relegations, sells all players of value, makes promises they don’t deliver on and then rake in millions and millions from the millions that are generated from such a sized club (and the prem parachute payments) but can’t be spent in League 1. Blames a succession of managers and continues to profit by running a large historic club on a shoe string.
Almost makes promotion back to the Championship unattractive...

Sound like anyone ??....
 
Aren't they in shit loads of debt? Maybe it'll do them good cos if they can pay off their debts to an extent, it will therefore leave them a lot more attractive to decent investment. I know they did some dodgy debt restructuring but I don't think it made the club especially more attractive to the outside world.
The trouble with this though, for Sunderland in particular, is that the extra money generated which can't be spent improving the team will go in the owners pockets.
Karl will be raging at missing out 😂
 
Using the roughest of estimates, if Sunderland get gates of 20,000 at £20 a ticket, their gate receipts for the season will be £9.2m. Then there is sponsorship, merchandise sales, etc.

Yet they can only spend £2.5m of that on wages.

I can see why their fans are unhappy about only being able to spend the same amount as those jokers up the road with their 2000 fans.

Equally, I wonder if the clubs as whole chose to play it safe given the situation. If sunderland end up playing a big portion of the season with no one or far less than 20k fans in the ground but had a 20m plus wage bill (as they had recently) then they go further in the mire.

They're angry at having crap owners but when your a business in debt with massive costs to service, who the hell is going to buy you other than dodgy characters?

Fwiw, it's going to impact Pilley quite a lot - not sure where F/wood's budget is, but it's certainly not the lowest by a long shot.
 
Fwiw, it's going to impact Pilley quite a lot - not sure where F/wood's budget is, but it's certainly not the lowest by a long shot.

Indeed. But that is because he has been massively over spending despite laughable attendances.
When the cap comes in to play, the fact he has to hand out tickets to anyone remotely interested just so they can make it towards a full house against their local rivals (for example) isn't going to matter anymore, because he can now only pay out the same amount as us (instead of using Sunderland as an example).
That can't be right. It should have been a % of turnover.
 
Aren't they in shit loads of debt? Maybe it'll do them good cos if they can pay off their debts to an extent, it will therefore leave them a lot more attractive to decent investment. I know they did some dodgy debt restructuring but I don't think it made the club especially more attractive to the outside world.

Their latest accounts are hard for a layman like me follow. It looks as though they may have written off 20m in loans (unless I have misunderstood it, which is entirely possible). But I'm still not sure they are in a good position.
 
The trouble with this though, for Sunderland in particular, is that the extra money generated which can't be spent improving the team will go in the owners pockets.
Karl will be raging at missing out 😂

Yeah, I thought that earlier. He'll be leaping around, man boobs bouncing in an old scruffy polo shirt, shouting 'why aren't they calling it the the KO cap! I said you didn't need to pay players all along!'

I suppose it's up to fans to demand the saving go into ticket prices or towards the club as a whole.

It's an argument for supporter involvement at boardroom level. In Sunderland's case, they can pay debt and/or put the revenue in the bank to spend when they break out of the salary cap via promotion. As you say, there's no promise that happens.

For us, I'd argue that it potentially funds the projects we are planning on (training ground, scouting network, facilities etc) and therefore leaves Sadler's chequebook for later...

That said the assumption that it will lead to clubs making a mint is based on one great unknown factor...

1) the assumption crowds are somewhere near 'normal'

- from memory we took in about 1.5m on season tickets last year. Add that to the solidarity payment of approx 700k and we're at 2.2m income. I don't know what merch is worth but there's no other significant revenue we can rely on outside of those income streams beyond dealing in transfers and I don't think we're in significant profit there. We don't even own Goldbond any more.

I'd guess the above is why the cap is where it is. We're on the larger side of medium in the context of the division. Sunderland, Ipswich and Portsmouth are very much outliers in terms of their income.
 
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