Championship salary cap next season? (1 Viewer)

[Winny the Bish]

The 24 Championship clubs will meet on Thursday to discuss proposals for an £18m salary cap that could be introduced as early as next season.

Championship clubs to meet over salary-cap proposal

The 24 Championship clubs will meet on Thursday to discuss proposals for an £18m salary cap that could be introduced as early as next season.

www.skysports.com

 

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[SkyblueCookie]

Would be surprising if they implemented this as early as next season. Current teams, and teams coming down from the prem, will probably be way over this. I'd expect that if they did include a cap, it would be a phased thing. So, 30m next season, 25m season after and so on. Doesn't give teams a lot of time to prepare.

 

[Evo1883]

This is another thing that will benefit us massively

 

[Ring Of Steel]

This is another thing that will benefit us massively

Yes, but also completely impossible to roll out in time for next season though.

 

[Evo1883]

Yes, but also completely impossible to roll out in time for next season though.

Has to be over a 3 year period assuming most contracts are 2-4 years

 

[SkyBlueSam01]

18m in the Champ down to 2.5m in League 1 is a massive cut off... Clubs relegated from the Championship would need a complete transformation of club finances

 

[Esoterica]

18m in the Champ down to 2.5m in League 1 is a massive cut off... Clubs relegated from the Championship would need a complete transformation of club finances

I just can't see it happening - it's a minefield to implement. How could that drop from Championship to L1 budget be realistically achieved? Teams would need to release their entire squads and start over and some of those might be saleable assets. The more exceptions you then put in place, the more open to abuse it becomes and you'll be left with a FFP situation like Man City are in.

 

[Sky_Blue_Dreamer]

Not a fan. Although I want to see a fairer league I also don't think it's fair a team that is drawing in more fans and revenue not being allowed to use that to their advantage.

Hence why I prefer the % of income that is currently used and I think capping squad numbers rather than squad wages would be better for the game. Makes you pick the players you sign more carefully and stops clubs hoarding talent so spreading it out.

 

[shmmeee]

Couldn’t clubs start writing extreme relegation clauses into contracts? I’d imagine it’d end up as “you can leave or your wages drop massively” type thing, but if every club was doing it the players would have to accept it. Earning tens of thousands in L1 is frankly ridiculous and players should count themselves lucky the wheeze has lasted as long as it has.

 

[Sky_Blue_Dreamer]

Couldn’t clubs start writing extreme relegation clauses into contracts? I’d imagine it’d end up as “you can leave or your wages drop massively” type thing, but if every club was doing it the players would have to accept it. Earning tens of thousands in L1 is frankly ridiculous and players should count themselves lucky the wheeze has lasted as long as it has.

That's why I wanted the wages of players linked directly to that seasons income. So if you get relegated or fail to qualify for Europe and income drops 75% so does their wages automatically. But if you go up you get that benefit too. Keeps players on their toes.

 

[shmmeee]

That's why I wanted the wages of players linked directly to that seasons income. So if you get relegated or fail to qualify for Europe and income drops 75% so does their wages automatically. But if you go up you get that benefit too. Keeps players on their toes.

The days of players sat around doing fuck all and picking up club bankrupting sums needs to end. Whether it’s clubs need to be forced to stop offering it or contract law needs fixing I don’t know but it’s unsustainable. Clubs should be able to prove a change in circumstances means the contract isn’t viable. Frankly I’d let clubs sack players as well, so you aren’t stuck with a lump like Kastaneer who isn’t trying and sucking down a fat wage.

 

[Sky_Blue_Dreamer]

The days of players sat around doing fuck all and picking up club bankrupting sums needs to end. Whether it’s clubs need to be forced to stop offering it or contract law needs fixing I don’t know but it’s unsustainable. Clubs should be able to prove a change in circumstances means the contract isn’t viable. Frankly I’d let clubs sack players as well, so you aren’t stuck with a lump like Kastaneer who isn’t trying and sucking down a fat wage.

Agree with most of that but the sacking of players could be a minefield.

Could actually drive wages up due to the increased uncertainty and clubs possibly willing to offer it knowing they could get rid of them quickly.

Plus if clubs want the right to sack players players will instantly call for normal employee rights such as being allowed to hand in their notice. So big clubs get to pick up all the best talent for nothing cos they just get players to hand in their notice and thus developing players becomes a burden as you could lose every single one of them for nothing no matter what contract you offer.

Affect on players mindset could be huge too. US sports has something akin to that where they can cut players whenever they want. So they've got a lucrative job on Friday and no income at all on Monday. A lot of players over there have said how it can be a massive struggle mentally and financially if that happens because it's not happening to the megabucks stars, it's happening to the rookies and journeymen who earn much less comparatively.

 

[shmmeee]

Agree with most of that but the sacking of players could be a minefield.

Could actually drive wages up due to the increased uncertainty and clubs possibly willing to offer it knowing they could get rid of them quickly.

Plus if clubs want the right to sack players players will instantly call for normal employee rights such as being allowed to hand in their notice. So big clubs get to pick up all the best talent for nothing cos they just get players to hand in their notice and thus developing players because a burden as you could lose every single one of them for nothing no matter what contract you offer.

Affect on players mindset could be huge too. US sports has something akin to that where they can cut players whenever they want. So they've got a lucrative job on Friday and no income at all on Monday. A lot of players over there have said how it can be a massive struggle mentally and financially if that happens because it's not happening to the megabucks stars, it's happening to the rookies and journeymen who earn much less comparatively.

Yeah all good points. There must be a compromise position, I do think it’s probably a low basic with larger playing and win bonuses and promotion/relegation clauses linked to expected revenue changes.

Maybe (sorry Jimmy) bring back the wage cap but for basic salary only so each league can set an appropriate level?

 

[wingy]

Aberdeen have cut with the agreement of players .
Salaries reduced by 20% .
Overall loss of income in the region of £10M.

 

[Sky_Blue_Dreamer]

Yeah all good points. There must be a compromise position, I do think it’s probably a low basic with larger playing and win bonuses and promotion/relegation clauses linked to expected revenue changes.

Maybe (sorry Jimmy) bring back the wage cap but for basic salary only so each league can set an appropriate level?

.

My proposal was to split the money into fixed and variable income. Fixed being TV money, sponsorships etc, variable being gate receipts, prize money etc. Fixed income used for basic wage, variable being bonuses at the season end.

Would work best in a more normal pay-grade situation rather than individuals negotiating own terms i.e. first team, U23 etc and the bonuses paid out depending on time on the pitch during the season.

Would need some caveats added in such as sick pay for injury. Was thinking about 1.5 to 2x basic pay on top when signed off as injured by physio/doctor to stop a fringe/out of favour player knowing they weren't going to play claiming injury to up their wages. On the other hand that could allow a club to get a physio to not sign players off as injured even if they were to save money but that would be very short-sighted and cutting your nose off to spite your face given the animosity it could cause and lead to potential signings turning us down if they heard from other players that's what happens.

 

[Magwitch]

Good, long overdue.

 

[kapowaz]

18m in the Champ down to 2.5m in League 1 is a massive cut off... Clubs relegated from the Championship would need a complete transformation of club finances

I wonder whether the solution wouldn’t be a phased budget changeover multiple seasons. First season after relegation from Champ to L1: £12m, second £6m, then £2.5m from third onwards?

 

[shmmeee]

Really don’t agree with cushions post relegation. Don’t agree with parachute payments either. Players need to accept if they get a club relegated they will lose wages or need to leave. Otherwise you completely distort the competitiveness of the league.

 

[Legia Sky Blue]

I completely disagree with enforced wage caps. It would be ridiculous for say if Villa were to get relegated and pulling in 30,000 crowds, but were then expected to have the same wage limitations as Wycombe, pulling in 6,000 or so, simply because they happened to be in the same league.

FFP was the right way to go as a guide to what clubs should reasonably spend, but at the end of the day clubs have to take self responsibility for their finances, and live within their own individual means. Those that don't inevitably come a cropper at some point and are punished by falling down the leagues anyway.

 

[tisza]

Hard to see how it works with the clubs that yoyo in and out the PL. Parachute payments etc.
FFP hasn't worked when you see the debt levels and wage:income ratios.

 

[Liquid Gold]

It should just be written into all contracts that there is an x% decrease on relegation, reward them with the same % increase after promotion. Players can negotiate a buy out clause if they want but if they make it the rule then players can't do anything. If they force moves out of the club then the selling club can only replace them with a player that fits in with the salary cap.

 

[robbiekeane]

FFP was the right way to go as a guide to what clubs should reasonably spend, but at the end of the day clubs have to take self responsibility for their finances, and live within their own individual means. Those that don't inevitably come a cropper at some point and are punished by falling down the leagues anyway.

Yeh they just need to enforce FFP properly. Some sort of % of pre-salary profit or turnover or whatever. But they obviously don't enforce it if you look at the losses incurred year on year.

 

[Marty]

It's a good idea in principal but completely unfair, for example, why should Sunderland have the same wage budget as Fleetwood when SAFC draw in 10 times the crowd. They need to stick to the current percentage system but be completely ruthless with those breaking it.

 

[Mucca Mad Boys]

Salary caps are a bad idea, just look at the issues caused in rugby.

Club should also be personally responsible for running themselves. They wanna run themselves into a lot of debt in the pursuit of the Premiership? It’s up to them.

 

[SBAndy]

Yeh they just need to enforce FFP properly. Some sort of % of pre-salary profit or turnover or whatever. But they obviously don't enforce it if you look at the losses incurred year on year.

At L1 and L2 level, SCMP means you can spend a maximum of 60/55% (depending on league) of your turnover on wages. Seems a lot more diligent down there. Because the Championship follows FFP rather than SCMP, you’re allowed aggregated losses of something like £50m over a three-year period. I’ll be buggered if I know why it’s different. If a PL club comes down their turnover is still higher (due to Parachute Payments) so they should manage a wage structure on a wage:turnover ratio well enough.

 

[Magwitch]

SCMP is the way forward which is a type of wage cap anyway based on affordability, certainly not right clubs like Sunderland/Portsmouth as an example who get 20/25000+ are restricted the same as Fleetwood for example. If it’s strictly enforced it would work and if a club sells a player that money goes in the pot.
Teams running in the red should be restricted from the transfer market.

 

[Sky_Blue_Dreamer]

SCMP is the way forward which is a type of wage cap anyway based on affordability, certainly not right clubs like Sunderland/Portsmouth as an example who get 20/25000+ are restricted the same as Fleetwood for example. If it’s strictly enforced it would work and if a club sells a player that money goes in the pot.
Teams running in the red should be restricted from the transfer market.

I've never been sure about whether transfer fees should go in the wage budget.

One year you could sell a player for a fortune, up the wage bill and season after you've broken the rules.

Unless you sell someone for big money and bring in some players on 1 year contracts hoping to get promoted or Europe or whatever. But that encourages a very short-term and reckless business plan.

 

[Magwitch]

Been said today as many as 15 EFL clubs could go into administration or worse very soon, also that parachute payments should stop, one thing for certain things will change let’s hope it’s for the better.

 

[chiefdave]

Been said today as many as 15 EFL clubs could go into administration or worse very soon, also that parachute payments should stop, one thing for certain things will change let’s hope it’s for the better.

Things need to change. Would have preferred it to happen in different circumstances but maybe this will be the thing that finally kicks them into action.

 

[kapowaz]

The problem with any proposal like this is it tries to treat this particular division as a vacuum, when it’s not. The whole English football pyramid is connected, and thus so are its finances. The TV revenue of the Premier League should be more equitably distributed, at which point parachute payments and wage caps become unnecessary. If there wasn’t such a massive gulf in earnings between the divisions you wouldn’t see such speculative overextending, and the cost of relegation wouldn’t be so dramatic as to necessitate parachute payments.

Of course, no team in the Premier League is going to sign up to reducing their share to fix the problems elsewhere, and so here we are.

 

[Liquid Gold]

I also don't think owners should be stopped from pumping their own money in if they want to, so long as it doesn't come in as a debt that could be paid back if the owner decides to pull the plug. Just having your budget as a % of turnover means you're basically going to be at the same level forever.

 

[SBAndy]

I also don't think owners should be stopped from pumping their own money in if they want to, so long as it doesn't come in as a debt that could be paid back if the owner decides to pull the plug. Just having your budget as a % of turnover means you're basically going to be at the same level forever.

Take your point, but I think wages should be judged against turnover of the club. Problem is, if you include owners’ contributions then if they sell there is no guarantee that the new owner will want to fund losses like the previous owner. The only legal alternative would be for owners to personally guarantee contracts (or a certain amount of contracts outside the turnover threshold) though in practice very few would agree to this. Let them put money in for transfer fees, no real issue with that, but if sustainability is the order of the day then it’s got to be well thought out.

 

[oldskyblue58]

Just a few thoughts

I don't think a salary cap of 18m works. It fails to take in to account means. You could have clubs where that figure exceeds turnover whilst others it is way below. It also doesn't take in to account operating costs overheads and finance costs. Last thing we need is clubs spending above means.

It isnt like rugby whereby the majority of funding each season is by central distribution and there is no transfer market. It isnt really a good comparison model

Parachute payments in themselves are not a bad idea but use them as intended. They are supposed to cover the difference in costs retained from Premier league "investment " retained after relegation to championship so apply them only to that. All contracts are filed at fa / efl so can be monitored as to how cost is affected. Apply it to the registered squad when team relegated. Perhaps, the only place a salary cap element works for me by saying for this purpose a max championship salary is x and anything above is covered by parachute payment. Flex it for players moving on (including fees). Then any surplus or deficit on parachute is included in the annual wages calculation for the new championship season.

Which ever way you look at it there would have to be exceptions built in and therefore loop holes.

For me it has to be a percentage of ability to fund from own means. A monitored calculation Of some kind.

The calculations have to take in to account transfer dealing. It is a huge part of how clubs operate day to day. Bigger fees imply bigger wages. A club like ccfc transfer dealing is fundamental to how it operates and survives it cant be ignored.

But the real problem is not profitability it is the ability to pay the clubs way or better known as cash flow. Make all clubs stick to a rolling annual positive cash flow. Do not focus on profit or losses which is often affected by accounting calculations like depreciation where no money is actually paid out. That would account for variances each year on cash but ensures there are funds to go forward. Deduct any accumulated deficit from next turnover before calculating the next financial wage budget.

No problem with owners putting in their own funds but it should go on as outright gift or ordinary equity shares not loans. Caveat to that would be owner funding for property which could be returnable but perhaps not secured. I would try to avoid any possibility of the property being able to be stripped from the club by owners. Limit what is classed as 3rd party lending to lenders demonstrably independent from the club owners.

Freeze existing owner debt agreements in that no new ones can be added. it would not be possible to do more than that Problem is if interest can not be paid, you would have to add that to debt or call it in. I am not saying don't repay quite the opposite, if cash flow available do exactly that.

Make all clubs use the same reporting standard and format the most detailed one that applies to all. Only way to get transparency and comparability. Adds a bit more cost in professional fees for some but in the scheme of things not much. Just because something isn't required by companies act doesnt mean the efl cannot require its inclusion. Also file full accounts not abridged so the biggest investors in football - the fans- get a better idea of what is going on.

The clubs need to back and fund proper regulation by the efl. That means larger annual league fees. Given the sums involved throughout football then I have no truc with the notion it would cost the clubs too much. How much have things like Wigan, Bury etc cost ....

Give the efl proper teeth to enforce things. But also make it timely. That means proper staffing and funding as a priority not the after thought it is now. The efl needs to have the power to take clubs on, hold them to account, and the will or desire to do it

Sadly most of all that will never happen, simply because of the self interest of the owners

 

[Orca]

It should just be written into all contracts that there is an x% decrease on relegation, reward them with the same % increase after promotion. Players can negotiate a buy out clause if they want but if they make it the rule then players can't do anything. If they force moves out of the club then the selling club can only replace them with a player that fits in with the salary cap.

CCFC already have this for player contracts. I know a youth team player who was delighted at us being promoted. Not only is he a Cov fan anyway, but he was also very pleased he was getting a pay rise. I'd be surprised if it wasn't standard practise across the lower leagues now and probably even in place for the yo-yo clubs around the Premier League and Championship, especailly given what happened to the finances of the likes of us, Leeds, Bolton, Pompey in the not too distant past.

 

[Liquid Gold]

CCFC already have this for player contracts. I know a youth team player who was delighted at us being promoted. Not only is he a Cov fan anyway, but he was also very pleased he was getting a pay rise. I'd be surprised if it wasn't standard practise across the lower leagues now and probably even in place for the yo-yo clubs around the Premier League and Championship, especailly given what happened to the finances of the likes of us, Leeds, Bolton, Pompey in the not too distant past.

Most clubs have promotion rises or bonuses. What I’m talking about is a complete overhaul of the contract system so clubs aren’t forced to pay crazy wages on relegation and players are rewarded properly for promotion. Surely you get that?