Salary Cap? | Page 6 | Vital Football

Salary Cap?

We need the Championship to follow suit because otherwise it creates a bigger gap than there already is.

Also going to be an issue with for NL Clubs. They could, in theory, have a bigger budget in the league below. They're going to be between a rock and a hard place because do they a) re-build their squad before the L2 season because we know the quality difference between the leagues, or b) give their players longer contracts to get around the cap initially but risk not being able to shift them?
 
BBC are quoting Dale Vince on the topic, not really sure what point he’s trying to make. But he’s not the person I would go to on a financial sustainability topic
 
Impish said:
I wonder who the two were, Salford and?
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Salford have been very aggressive in their transfer dealing and Neville has always been very vocal about restricting investment in Club's. Scunny, maybe?

EDIT - Bradford were one apparently.
 
Casperimp said:
Well done to clubs in Leagues 1 and 2 it's about time some sort of reality was brought to the obscene over bloated world of Football. You have to feel with good management this gives clubs like ours the very real possibility of getting into the Championship.
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The obscene and bloated world of football is located in the Premier League, not Leagues One and Two.

I am all for salary caps, but not in this format. This makes no sense for Sunderland, Ipswich, Portsmouth and a few others, who will be making large sums of money on the gate but cannot use it. It means that Sunderland with an average gate of 31,000 can only spend the same on players as Accrington with an average gate of 2,800. So Sunderland can take £9 million per season on the gate alone, but can only allocate £2.5 million to their playing squad. That may benefit the likes of Lincoln, but it is far from being fair. Sunderland will be a rich football club with a poor football team. If they have a poor football team, the only outcome is falling gates and stagnation.

And what about the likes of Oxford, who have developed younger players - which is exactly what the football authorities want clubs to do - and sold them on for millions? They are only permitted to spend £2.5 million on wages too, so what do they do with the surplus they have generated through running their club in the right way? Where is the incentive for continuing with that trading model if it does not benefit the club and allow it to advance?

There is an inherent flaw with this, and it is a serious one: it really ought to be a figure linked to turnover, not a flat number. That is the only way to make clubs live within their means.

Furthermore, I reckon the cap will not affect 15 of the clubs in League One because they were not spending £2.5 million anyway. Therefore, I am struggling to see which clubs' finances this is designed to correct. It appears almost irrelevant to the majority, and punitive to a small number.

Will the better players be less willing to drop down to League One if the average wage is 'only' £2,400 per week, or to League Two where the average would be £1,450? Does that mean that the overall standard of football in the lower divisions will drop?

Looking a bit further ahead, what happens to a club promoted from League One (with a salary cap of £2.5 million) to the Championship where the cap could be £18 million? It makes it almost impossible for the promoted clubs to compete at the higher level, which means more promoted clubs will be relegated straight back to League One. What is created therefore, is an ersatz Premier League 2. Is that actually the intention?

I am thinking aloud with this, but my head is full of questions.
 
gw54 said:
I wonder who will be the first L1/L2 club to sue the EFL after being punished for breaking the salary cap.
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How can they sue? It was a vote from their members. The EFL *are* the Clubs.

That's why, despite all the vocals and posturing, no-one has taken action against anyone on the curtailment of the season. If it was that easy, they'd have been in with a shot.
 
Scotimp said:
The obscene and bloated world of football is located in the Premier League, not Leagues One and Two.

I am all for salary caps, but not in this format. This makes no sense for Sunderland, Ipswich, Portsmouth and a few others, who will be making large sums of money on the gate but cannot use it. It means that Sunderland with an average gate of 31,000 can only spend the same on players as Accrington with an average gate of 2,800. So Sunderland can take £9 million per season on the gate alone, but can only allocate £2.5 million to their playing squad. That may benefit the likes of Lincoln, but it is far from being fair. Sunderland will be a rich football club with a poor football team. If they have a poor football team, the only outcome is falling gates and stagnation.

And what about the likes of Oxford, who have developed younger players - which is exactly what the football authorities want clubs to do - and sold them on for millions? They are only permitted to spend £2.5 million on wages too, so what do they do with the surplus they have generated through running their club in the right way? Where is the incentive for continuing with that trading model if it does not benefit the club and allow it to advance?

There is an inherent flaw with this, and it is a serious one: it really ought to be a figure linked to turnover, not a flat number. That is the only way to make clubs live within their means.

Furthermore, I reckon the cap will not affect 15 of the clubs in League One because they were not spending £2.5 million anyway. Therefore, I am struggling to see which clubs' finances this is designed to correct. It appears almost irrelevant to the majority, and punitive to a small number.

Will the better players be less willing to drop down to League One if the average wage is 'only' £2,400 per week, or to League Two where the average would be £1,450? Does that mean that the overall standard of football in the lower divisions will drop?

Looking a bit further ahead, what happens to a club promoted from League One (with a salary cap of £2.5 million) to the Championship where the cap could be £18 million? It makes it almost impossible for the promoted clubs to compete at the higher level, which means more promoted clubs will be relegated straight back to League One. What is created therefore, is an ersatz Premier League 2. Is that actually the intention?

I am thinking aloud with this, but my head is full of questions.
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Also the question on whether L1 and L2 will lose more players to Scotland. They love a lower league player anyway, but they'll be better payers now I imagine.

Of course, there was a figure linked to turnover - SCMP. The problem with that was that it seemed to be needing monitoring better than it was and/or needed something in place that put some accountability on those who'd hand out silly wages but could walk away scot-free.
 
Scotimp said:
And what about the likes of Oxford, who have developed younger players - which is exactly what the football authorities want clubs to do - and sold them on for millions? They are only permitted to spend £2.5 million on wages too, so what do they do with the surplus they have generated through running their club in the right way?
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Build a 4th side to their ground ;)
 
There will always be arguments from “rich” clubs against a salary cap but the alternative has not been too successful recently.

You would have to question how firm a ground clubs like Sunderland would be on saying it’s not fair because they have money in the bank they could spend, when they have posted losses of 10 and 20 million in the last few seasons.

Anyway on the face of it for me it’s a good start.

No doubt the PFA will welcome this as it reduces the likelihood of clubs not as well managed as ours, having to tell their player they can’t afford to pay them.

If there needs to be tweaks in the future so be it but if it was ever going to happen it needed to be now.
 
"Clubs will be fined or face further sanctions if they exceed the spending limits."

those fines and further sanctions need to be crystal clear. and acted upon swiftly, otherwise is is another useless rule.

would love to know how far past 2.5million the budget is at sunderland, ipswich, portsmouth.
'transition agreements' for hull and charlton????

could be game on for the clubs with the good coaching set up.
 
Pleased there is now some limit but like ScotImp, I also think a link to turnover is better.
A club who cannot afford £2.5million (Accrington maybe) could still pay it out and put themselves into a financial loss, whilst thr likes of Sunderland will have much excess income that they can't now spend.

Think it's almost certain that a flatrate salary cap will get amended in the future to accommodate turnover levels too.
Think someone suggested 25% of turnover above the chosen norm could be added to the salary cap to allow benefit for the clubs who raise more income. And a reduced salary cap could come in for those clubs at the poorer end.
Anyway, a positive first step!
 
Spilsby52 said:
Build a 4th side to their ground ;)
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or they could put more money into their successful youth set up. that would assist their sustainability. not too long ago they were also in the conference, might insure against them going back there.
 
Scotimp said:
The obscene and bloated world of football is located in the Premier League, not Leagues One and Two.

I am all for salary caps, but not in this format. This makes no sense for Sunderland, Ipswich, Portsmouth and a few others, who will be making large sums of money on the gate but cannot use it. It means that Sunderland with an average gate of 31,000 can only spend the same on players as Accrington with an average gate of 2,800. So Sunderland can take £9 million per season on the gate alone, but can only allocate £2.5 million to their playing squad. That may benefit the likes of Lincoln, but it is far from being fair. Sunderland will be a rich football club with a poor football team. If they have a poor football team, the only outcome is falling gates and stagnation.
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sunderland + 'making large sums of money' as an example is laughable.
 
nlondonimp said:
sunderland + 'making large sums of money' as an example is laughable.
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No, it isn't. They made an underlying profit of £9 million in the 2018-19 financial year, only distorted by the way in which Stewart Donald funded his purchase of the club in May 2018. Once he has sold the club (imminent), it will show good profitability for that year and also for this. They have put their house in order very efficiently.
 
buckielugger said:
Pleased there is now some limit but like ScotImp, I also think a link to turnover is better.
A club who cannot afford £2.5million (Accrington maybe) could still pay it out and put themselves into a financial loss, whilst thr likes of Sunderland will have much excess income that they can't now spend.

Think it's almost certain that a flatrate salary cap will get amended in the future to accommodate turnover levels too.
Think someone suggested 25% of turnover above the chosen norm could be added to the salary cap to allow benefit for the clubs who raise more income. And a reduced salary cap could come in for those clubs at the poorer end.
Anyway, a positive first step!
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Turnover is a bit harder to police though, that's how selling the ground and chairman sponsoring their own club has come about.
 
Scotimp said:
No, it isn't. They made an underlying profit of £9 million in the 2018-19 financial year, only distorted by the way in which Stewart Donald funded his purchase of the club in May 2018. Once he has sold the club (imminent), it will show good profitability for that year and also for this. They have put their house in order very efficiently.
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would actual profit levels be a safer gauge though, rather that potential profit? as newcastle have found out, possible/imminent takeovers don't always happen.
re: your thoughts on turnover - it is only a good gauge of squad spending power if all other club admin costs are under control, imo. as an example sunderland's basic setup costs a lot more to run than accrington's.
 
It will be interesting to hear more from Clive and Liam about this.

I know Liam has often given updates on Radio Lincs on Saturdays afternoon but now it has passed and hopefully all the details are know it will be good to hear how important this was for our club.
 
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